Rachel Koning Beals
The latest pledge does not include emissions from internet transmission or electronic devices members use to watch Netflix
Streaming giant Netflix Inc. believes it can reach net zero emissions as soon as the end of next year.
Netflix's carbon footprint hit 1.1 million metric tons last year. That roughly equals the footprint of a town with 150,000 homes.
The company will first reduce its internal operational emissions, aligning with the Paris Agreement's goal (.) to limit global warming to 1.5degC. It will reduce Scope 1 emissions, the pollution directly from a corporation's operations, and Scope 2 emissions, or those linked to its energy use, by 45% by 2030, based on Science-Based Targets Initiative Guidance ( ).
The remainder of the emissions -- Scope 3, or those created by vendors and customers throughout a supply chain -- will be offset by investing in carbon capture projects, including conserving tropical forests, restoring grasslands and mangroves, and promoting healthy soils, as well as capturing and storing carbon, the company said in a blog post ().
Netflix(NFLX) is the latest of an expanding group of technology and other companies that see marketing value in advancing climate-friendly policies, especially with increasingly popular "net zero" pledges. Environmental and alternative-energy groups are generally embracing corporate interest but are closely monitoring whether companies will cut their own pollution and fossil-fuel use in a timely fashion, or are relying too much on "offsetting" energy use without fundamental change to operations. Transparency is a key requirement, say these groups.
Read:Global investors with $54 trillion tell companies pledging net zero emissions to show their work ()
Pressure is also rising on voluntary carbon-offset markets to meet this rising corporate demand to hit "net zero" and deliver what they promise, write Oliver Miltenberger of the University of Melbourne and Matthew Potts, of the University of California, Berkeley, in a commentary ().
"It's getting better, but over-reliance on this method for counterbalancing emissions does risk some entities' using offsets as a right to pollute," the researchers said.
About half of its emissions are generated by physical production of Netflix-branded films and series including those managed directly or through a third-party producer. That count also includes Netflix-branded licensed content. The rest is generated by corporate operations at offices or via its marketing efforts. Cloud providers like Amazon Web Services(AMZN) and the Open Connect content delivery network used to stream the service account for 5% of the footprint.
The latest pledge "does not include emissions from internet transmission or electronic devices our members use to watch Netflix," the company said. "Internet service providers and device manufacturers have operational control over the design and manufacturing of their equipment, so ideally account for those emissions themselves."
But Netflix said it has joined a research effort call DIMPACT, led by the University of Bristol, which is developing a calculator to measure the household footprint of streaming and other internet uses.
Netflix topped 200 million streaming subscribers for the first time at the end of 2020, as sign-ups surged despite higher prices in the U.S. and Canada, the company reported earlier this year in its most recent earnings report (.).
Read:Here's what's worth streaming in April 2021: 'Handmaid's Tale,' 'Mosquito Coast' and much more ()
Emma Stewart, the company's first sustainability officer, also highlighted the rising viewership of climate-focused content on its streaming service.
"We acknowledge the reach of sustainability stories on Netflix," she said, noting that in 2020, 160 million households watched at least one sustainability related title. Some 100 million households tuned into Our Planet since the launch in 2019 of the series of nature and ecology documentaries hosted by David Attenborough.
Shares of Netflix are down 5.9% in the year to date, though up 35% over the past year. The S&P 500 is up 5.3% in the year to date and up 53% over the past year.
-Rachel Koning Beals; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 30, 2021 12:50 ET (16:50 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.