'Net zero' Netflix is far from climate neutral
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Digital video and music streaming services have quickly become a fixture of home entertainment across the globe, but the industry鈥檚 path to climate neutrality remains shrouded in uncertainties. Like many other large players in the film and TV industry 鈥 which is weakly regulated in environmental terms 鈥 the most popular streaming company, Netflix, has adopted voluntary targets for reducing its greenhouse gas emissions. The company in 2021 it wants to 鈥渁chieve net zero greenhouse gas emissions by the end of 2022, and every year thereafter.鈥
Netflix has not yet announced whether it has reached its target. But it is certain that the company will continue to cause emissions 鈥 its 鈥渘et zero鈥 target only means it will compensate its remaining CO2 output with carbon credits, a practice that has increasingly come under fire for being unreliable. In contrast to the net zero target, Netflix's emissions recently have risen strongly, and true climate neutrality remains a distant target: Neflix aims to reduce its direct emissions and those from using electricity (so-called scope 1 & 2 emissions) by 45 percent by 2030.
With its climate commitments, Netflix still goes further than most other players in the sector, according to industry experts. 鈥淣etflix is quite right in calling themselves a leader in the media field鈥 in terms of the thoroughness of its reporting, believes Pietari Kaapa, who specialises in聽environmental media production policies and practices at the University of Warwick. Christiana Figueres, co-architect of the Paris Agreement and a member of Netflix鈥檚 net zero advisory group, at the launch of the target: 鈥淣etflix鈥檚 Sustainability Strategy is music to our ears.鈥
It鈥檚 difficult to compare Netflix鈥檚 sustainability claims to those of its competitors, partly because a number of streaming rivals are folded within larger media empires, which don鈥檛 report the sustainability metrics of the streaming services separately from the rest of operations. But other studios have largely set targets of 2030 and beyond for reaching net zero in parts of their operations, and the Netflix target applies not only to its very own productions, but also to Netflix-branded licenses.
So while the BBC production 鈥楰illing Eve鈥 wouldn鈥檛 be included in Netflix鈥檚 net zero calculations, which can be watched on the site but is not 鈥楴etflix鈥 branded, the show 鈥楥all My Agent!鈥, which bears the Netflix logo on the streaming site, would. Like many of its peers, the company is very hesitant to talk about its environmental credentials, despite its much-lauded data transparency. No Netflix representative agreed to speak on the record for this article.
Cleaning up film production
Netflix its entire carbon footprint rose almost 50 percent to 1.54 million tonnes of CO2 in 2021 鈥 the year before it was meant to hit net zero 鈥 mainly as a result of an increase in post-pandemic film production. 鈥淲e still have a lot of work to do within Netflix and across our industry before we reduce absolute emissions,鈥 the company admitted.
Roughly half of the company鈥檚 climate footprint was generated by the physical production of Netflix-branded films and series, whether managed directly or through third-party production companies. The remainder came mainly from corporate operations like offices and purchased goods, and a further fraction from the use of cloud providers like Amazon Web Services, and the content delivery network used for streaming.听
Netflix says in its that it avoided over 14,000 tons of CO2 emissions in 2021 鈥 less than 1 percent of the total. It uses three broad steps on its pathway to zero emissions: optimising energy consumption (such as right-sizing diesel generators); electrifying as much as possible (notably electric vehicles, although medium and heavy-duty electric vehicles remain a challenge to source); and then decarbonising whatever is left.
Controversial net zero strategies
Netflix鈥檚 plans for reaching net zero emissions involve several controversial strategies: carbon offsets, alternative fuels such as 鈥渞enewable diesel鈥, and renewable energy certificates.
NGO Transport & Environment argues that renewable diesel uses essentially the same raw materials as biodiesel, resulting in similar pressures on feedstocks. Yet the use of renewable diesel lowered emissions by 717 tons in 2021. Netflix is also relying on sustainable aviation fuel, which like renewable diesel is derived from biomass.
The company says it is using its scale and partnerships to incentivise technological innovations like hydrogen fuel cell units and mobile batteries, which remain limited in availability and capacity. But they could allow the full-scale replacement of diesel generators, which have been an environmental bugbear of film and TV production.
Netflix adopts alternative fuels in situations where it鈥檚 just about impossible to eliminate energy use, or switch to on-grid or renewable energy. The company also uses renewable energy certificates (RECs) to cover 100 percent of its electricity 鈥 a , because it generally doesn鈥檛 result in additional renewable capacity, but allows companies to take credit for renewable energy they don鈥檛 physically use themselves. Even with companies using science-based targets for emission reductions, as Netflix does, the use of RECs .
Along with RECs, Netflix depends on carbon credits to reach its net zero goal, and it is set to increase their use as it continues to grow. According to the , Netflix鈥檚 carbon credit portfolio is strong: issued by credible standards, addressing permanence and leakage, and incorporating other aspects of environmental justice. But carbon credits remain open to criticism, as they allow a company to simply buy its way out of fully decarbonising itself. 鈥淚 find that problematic as a rhetorical means of suggesting that they鈥檙e somehow reaching a sustainable goal,鈥 Kaapa notes. 鈥淯ltimately if they really wanted to reduce damage, they鈥檇 have to cut back on content production.鈥
Indirect emissions remain an industry 鈥渕ystery鈥
Netflix excludes the emissions from the streaming of its shows, and from the electricity used by TVs or computers while watching them, from its net zero calculations. 鈥淲e don鈥檛 include emissions from internet transmission or electronic devices our members use to watch Netflix. Internet service providers and device manufacturers have operational control over the design and manufacturing of their equipment, so ideally account for those emissions themselves,鈥 the company says.
But it remains ambiguous whether these so-called Scope 3 emissions (indirect value chain emissions) should be included in the climate plans of streaming companies. Netflix itself that guidance around corporate near-term net zero targets is unsettled.
While the film and TV industry has taken strides to address their direct (Scopes 1 and 2) emissions, 鈥淪cope 3 emissions is still in many ways a mystery to the industry,鈥 according to Kaapa.
, which is responsible for the most commonly used greenhouse gas accounting standards, doesn鈥檛 offer specific guidance on web-based streaming. But David Rich, the organisation鈥檚 deputy director, says that 鈥渋t is very similar to web-based software, which is classified as a direct use phase emission鈥. In other words, web-based software should be included within required Scope 3 emissions, rather than the optional 鈥榠ndirect use phase鈥 emissions.
In practice, digital content providers have taken different approaches to reporting on customers鈥 emissions. For example, music streaming service Spotify does account for its customers鈥 streaming, which of the company鈥檚 greenhouse gas emissions in 2020. Given that video streaming is much more energy-intensive than audio, the emissions from more than 220 million customers while watching Netflix content are likely substantial. But overall, streaming video is by far not as energy-intensive as some wildly exaggerated media reports have suggested, mainly due to rapid efficiency improvements in data centres, networks and devices. 鈥淐ontrary to a slew of recent misleading media coverage, the climate impact of streaming video remain relatively modest, particularly compared to other activities and sectors,鈥 concluded a .
Hunter Vaughan, an environmental media researcher at the University of Cambridge, believes that responsibility for this energy consumption should fall to content providers like Netflix and to governments, but it remains unclear how that could work in practice. 鈥淚鈥檓 not sure that we can set a timer to force Netflix to shut off someone鈥檚 binge,鈥 Vaughan said.
At the same time, companies like Netflix have enormous power to nudge customers in less energy-intensive directions, for instance by offering low-definition streaming options, and changing automatic 鈥楶lay Next鈥 settings, says Carolina Koronen, programme manager at the Environmental Coalition on Standards (ECOS), which is calling on the EU to set minimum requirements on energy consumption for companies like Netflix.
However, Netflix-funded concluded that 鈥渃hanges in video quality [have] only a very small impact on carbon emissions.鈥 The streaming company has been working with external researchers to measure the carbon emissions associated with streaming, and with internet service providers and device manufacturers on accounting for customers鈥 emissions. , this is part of its sphere of influence but not within its own remit, and thus outside of official net zero calculations. Therefore, Netflix is trying to shape conversations around internet-related emissions without taking full responsibility for them.
If a regulator does impose energy requirements, 鈥淚 think the system boundary will end just before the consumer side,鈥 Koronen acknowledges. But digital industries have a great deal of potential to be more ambitious, she adds.
Without stronger external guidance on where companies鈥 responsibility for emissions ends, Netflix and others will be able to continue picking and choosing, to some extent, the content of their net zero claims. A lot remains to be done before Netflix can be called a truly climate neutral company 鈥 regardless of its 2022 net zero target.