Netflix

RATING

SECTOR

Entertainment

WEBSITE

CONTACT

Netflix, Inc.

100 Winchester Circle, Los Gatos, CA 95032, USA

(Customer service): 0800 096 879

Netflix International B.V., Stadhouderskade 55, 1072 AB Amsterdam, the Netherlands

STOCK EXCHANGE

LISTING

N/A

EMPLOYEES

6,700

CHIEF SUSTAINABILITY OFFICER

 Emma Stewart

AWARDS

  • Nominations for the 2019 NAACP Image Awards, honors the accomplishments of people of color
  • Nominations for the 2019 GLAAD Media Awards, honoring LGBTQ+

CONTENT SOURCE

FURTHER READING

Report created by Kavita Kripalani

Netflix

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Netflix is a streaming service that allows its members to watch a wide variety of award-winning TV shows, movies, documentaries, and more on thousands of internet-connected devices. With Netflix, you can enjoy unlimited ad-free viewing of their content. There’s always something new to discover, and more TV shows and movies are added every month.

Netflix, Inc. is the world’s leading internet entertainment service with over 139 million paid memberships in over 190 countries. They provide TV series, documentaries and feature films across a wide variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen, and play, pause, or resume watching all without commercials or commitments. Additionally, over two million members in the United States (“U.S.”) subscribe to Netflix’s legacy DVD-by-mail service. 

Netflix is a pioneer in launching this streaming service in 2007. They have developed an ecosystem for internet-connected screens and have added increasing amounts of content that enable consumers to enjoy TV series and movies directly on their internet-connected screens. As a result of these efforts, Netflix has experienced growing consumer acceptance of, and interest in, the delivery of TV series and movies directly over the internet. 

Their core strategy is to grow the streaming membership business globally within the parameters of their operating margin target. They are also continuously improving members’ experience by expanding and mixing streaming content to attract new members. In addition, Netflix continuously enhances a user interface and extends a streaming service to more internet-connected screens. They also offer offline viewing for members to download.

Company Sustainability Activity

According to the company, Netflix has been looking for ways to reduce environmental impact, particularly in the area of electricity use, as this is the largest piece of its carbon footprint.

Netflix minimizes their electricity use by an increase in server efficiency, taking less energy to provide the same output.

Netflix is using renewable energies and 100% of estimated direct and indirect non-renewable power use was matched with renewable energy certificates and carbon offsets in 2019. In fact, renewable projects spanned 15 U.S. states and 20 countries aimed to reduce the environmental impact of energy use.

Netflix also works to be as sustainable as possible in a day to day operations. They use compostable products, donate excess food, and reduce single-use plastics. In addition, Netflix actively encourages employees to implement sustainability initiatives at home and in their personal lives. 

Netflix is inspired by the power of all their great storytellers who are inspiring sustainability values for Netflix fans around the world through entertainment.

Highlights

  • Since 2018, Netflix has decreased the amount of carbon footprint and energy consumption by 65%
  • In 2018, 60% of their estimated direct and indirect sales were matched with planted trees

Targets

  • Reduce the amount of direct energy use in the United States to 51,000 megawatt hours by 2022
  • Reduce the amount of indirect energy use in the United States to 19,000 megawatt hours by 2022
  • Introduce new campaign “Our Forest Need Your Help” by 2023
  • By 2022, plant one tree a day each year globally

Progress

The streaming service’s global energy consumption increased by 84% in 2019 to a total of 451,000 megawatt hours – enough to power 40,000 average US homes for a year.

Minimizing electricity use

  • At Netflix, they are continually tuning the performance of their servers, both to reduce energy use and increase speed and other performance metrics. In 2015, they shared impressive metrics about the increase in server efficiency, as in 2017, servers were able to support 200% of the bandwidth per watt than they were two years before, taking half as much energy to provide the same output.
  • With servers being the largest part of Netflix’s footprint, they devote the majority of efficiency efforts there. They also run a few other efficiency projects that reduce energy use in their office buildings and encourage and enable their employees to be green-minded.

Using renewable energy

  • Direct energy Netflix uses to run its operations. This includes energy use in offices and owned or leased facilities, and includes the Open Connect content delivery network. In 2019, the annual energy use for this part of their footprint was approximately 94,000 megawatt hours.
  • The larger part of its energy use is indirect— electricity they don’t use themselves but is needed to deliver Netflix to everyone. This includes the energy use of companies they work with such as Amazon Web Services and Google Cloud, and the power required to support the servers they install with internet providers. Netflix doesn’t control this energy footprint, so they’re not able to address its efficiency directly themselves. This indirect energy use was about 357,000 megawatt hours in 2019.
  • Netflix is matching its non-renewable energy with renewable energy products nearby. They purchase renewable energy certificates (RNEs) to match their non-renewable energy use and fund renewable energy production from sources like wind and solar. The projects they support generate renewable energy in locations where they have a direct electricity footprint or a footprint through partners. Netflix supports projects across 20 countries as in Canada, Western Europe and Brazil and 15 U.S. states. Unfortunately, not all regions of the world have well-developed markets for renewable energy. In these cases, they contribute to emissions reduction by purchasing carbon offsets, which are sourced from projects that reduce, absorb or prevent carbon and other emissions from entering the atmosphere.
  • 100% of its estimated direct and indirect non-renewable power use was matched with renewable energy certificates and carbon offsets in 2019.
  • In 2017, Netflix joined the EPA’s Green Power Partnership program, a voluntary program where businesses commit to use green power for some or all of their annual electricity consumption. As part of this program, Netflix submitted an annual report on its total electricity use and investment in renewables.

Sustainable in their operations

  • Beyond Netflix’s renewable energy commitments, they are working to be as sustainable as they can in its operations. They are leaning into industry-wide practices in production as members of the Producers Guild of America Green Production Guide and Albert in the United Kingdom.
  • For 2019, the offset the greenhouse gas (GHG) emissions associated with the majority of this air travel by investing in emission reduction projects. Netflix will continue this practice going forward. In their offices, sustainable practices include donating excess food and reducing the use of paper. Finally, through content like Our Planet—featuring David Attenborough and supported by the World Wildlife Fund—they work with storytellers who use their talents to build awareness around environmental issues, reaching millions of people around the world. Netflix says that they take environmental impact seriously and will continue to look for ways to minimize its impact in the years ahead.
  • Netflix will publish a report each year covering its environmental, social, and governance (ESG) performance. The report will focus on what’s material to its business and its industry using the Sustainability Accounting Standards Board (SASB) framework as a benchmark.

Certificates

N/A

UN Sustainable Development Goals

UN SDG Compliance

The following section aligns current company sustainability initiatives with the UN Sustainable Development Goals. Although not explicitly stated, Netflix has attempted to be compliant with  SDGs.

SDG 7

  • Minimizing electricity use – tuning performance of servers, reducing energy use in their office buildings
  • Using renewable energy – matching its non-renewable energy with renewable energy products nearby, purchasing renewable energy certificates (RNEs)

SDG 10

  • Netflix joined 55 other U.S. companies in advocating for equality and legal protection, organized by Human Rights Campaign

SDG 13

  • Reducing carbon footprint

Evaluation

Netflix made a move forward by starting to write a Social Environmental Governance report. 100% of their estimated direct and indirect non-renewable power use was matched with renewable energy certificates and carbon offsets in 2019.

However, Netflix does not mention how they engage their employees in offsetting environmental responsibility, nor do they disclose their KPIs. Their only disclosed number is their electricity usage but even that is not complete as some are outsourced.

Netflix does not have any certifications toward sustainability.

They need to do more by setting clear targets for the company. In brief, they don’t engage in any sustainable activity. Therefore, Netflix is rated a D. 

Analyst Outlook: Negative

Netflix has no clear sustainability goals outlined. They have not shown any progress towards sustainable development goals.

Key Points

  • Netflix disclosed these figures in its inaugural environmental, social and governance report, noting it matched 100% of its 2019 non-renewable power use with renewable energy certificates and carbon offsets. While these may help the brand, they don’t address the inconvenient fact that people’s love of streaming has unfortunate side-effects. Transmitting and viewing online video accounts for a large portion for this, generating nearly 1% of global emissions. Similarly, a study from the universities of Glasgow and Oslo found that streaming music has led to significantly higher carbon emissions than at any previous point in the history of music.

 

Share this Post