Netflix’s Stakeholders, ESG & CSR

Netflix sustainability, ESG, CSR, stakeholders, corporate citizenship, corporate social responsibility, environment, governance, streaming business case study
A Netflix stand. Netflix’s sustainability, ESG, and CSR strategy satisfy the interests of various stakeholders in the entertainment and content streaming business. (Photo: Public Domain)

Netflix stakeholders’ interests determine the company’s sustainability and environmental, social, and corporate governance (ESG) and corporate social responsibility (CSR) strategy. For example, the video streaming company’s sustainability targets are aimed at satisfying corporate responsibility for the environment and the interests of stakeholders, including environmental conservation groups. Although the entertainment goals of Netflix’s mission and vision mainly direct attention to members or subscribers as stakeholders, the global extent of the company’s streaming operations means that various other stakeholders, such as regulators of various countries, are also significant in CSR, ESG, and corporate citizenship strategy. This business situation means that Netflix’s sustainability goals, ESG and CSR strategy, and stakeholder management encompass various national and sociocultural contexts.

The perceived status of Netflix’s sustainability and success in ESG, CSR, and stakeholder management depends on the progress of the industry and competitors in the market. The company competes with the media and entertainment businesses of Walt Disney, Sony, and NBCUniversal, and the film production and streaming services of Apple TV Plus, YouTube (Google (Alphabet)), Amazon Prime Video, Facebook (Meta), and Microsoft Movies & TV (Films & TV). The Five Forces analysis of Netflix shows that this competitive environment involves innovation and some diversified multinational business organizations. Thus, social and regulatory pressures for ESG and CSR in various industries also influence Netflix’s ESG and CSR strategy and sustainability programs in the entertainment and content streaming markets.

Netflix Stakeholders’ Interests

Stakeholders’ interests affect Netflix’s business performance. The company’s strategic objectives for ESG and CSR, including sustainability targets, are based on these interests and their impact on the entertainment and streaming business. Netflix focuses on the following main stakeholder groups:

  1. Members
  2. Investors
  3. Regulators
  4. Communities and organizations

Members are Netflix subscribers and viewers (entertainment consumers). As stakeholders, members have interests relating to ESG and CSR, like high-quality entertainment and affordable subscription fees. The competitive advantages and capabilities determined in the SWOT analysis of Netflix can support organizational efforts for these interests. For example, the company has economies of scale that enable competitive and affordable subscription pricing.

Investors are interested in the profitable financial status of Netflix’s operations. This stakeholder group’s interests pertain to the governance element of ESG, although these interests also intersect with the environmental and social elements of the company’s CSR goals for its entertainment business. These CSR and ESG elements influence investors’ willingness to invest in Netflix, regarding corporate citizenship contributions to sustainability, environmental protection, and social improvement.

Regulators are stakeholders whose interests are diverse, relating to the legal systems of the countries where Netflix operates. For example, some countries have regulatory interests pertaining to the taxation of the streaming service, while other countries have additional regulatory requirements for social contributions for community development and sustainability. These ESG and CSR factors affect Netflix’s sustainability policies and strategies differently among countries and regional markets.

Communities and organizations influence Netflix’s CSR and ESG strategy. This stakeholder group is interested in the benefits that result from the company’s streaming and entertainment production business. For example, environmentalist groups are interested in Netflix’s sustainability programs, the community of actors is interested in competitive compensation and support for their craft, and social organizations for equality and inclusion are interested in inclusion and diversity in the company’s ESG and CSR initiatives.

Many of these stakeholder interests align with industry trends linked to the political, economic, social, technological, environmental (ecological), and legal (regulatory) factors discussed in the PESTEL/PESTLE analysis of Netflix. For example, social interest in multicultural content and ecological focus on sustainability are among the trends impacting firms in the entertainment industry. Netflix’s ESG and CSR programs consider these trends in developing measures for business goals pertaining to sustainability, community development, social contributions, and profitability.

Netflix’s Sustainability, CSR, and ESG Strategy

Netflix’s ESG and CSR programs are designed for multiple stakeholder groups and their interests. The intersections among stakeholders are considered in the company’s corporate citizenship and business ethics decisions. For sustainability and other goals for CSR and ESG, the following are Netflix’s programs and approaches for its stakeholders:

  1. Open Connect
  2. The Netflix Fund for Creative Equity
  3. Science-driven carbon reduction
  4. Sustainability in content
  5. Regulatory compliance

Netflix developed Open Connect, which is a network of hardware devices designed to avoid internet congestion and optimize streaming speed and video quality for viewers and internet service providers (ISPs). This network’s CSR and ESG impact is in terms of streaming service quality, affordability, and sustainability. This impact satisfies the stakeholder groups of members/subscribers, investors, and communities and organizations. For example, quality and affordability satisfies Netflix subscribers. These same factors make the company’s online service competitive and satisfy the ESG interests of the stakeholder group of investors. Affordability makes Netflix’s service more accessible and helps satisfy the market-exposure interests of actors, producers, and other entertainment professionals. Moreover, the speed and efficiency of Open Connect contributes to CSR performance in terms of the sustainability and improved carbon footprint of the company and stakeholders, including ISPs and individual subscribers. Netflix’s operations management and productivity measures are optimized to support the operational requirements of Open Connect as a factor in the company’s ESG and CSR strategy.

The Netflix Fund for Creative Equity provides funding for underrepresented communities in the entertainment industry, while enabling the company to gain access to talent and strengthen its brand and corporate image. As a component of Netflix’s CSR and ESG strategy, this Fund satisfies the interests of various stakeholders, including members, investors, and communities and organizations. For example, the Fund increases content variety, which satisfies members/subscribers. In improving the company’s access to talent for entertainment business operations, the Fund also satisfies the interests of investors. Moreover, the public relations characteristic of this Fund satisfies investors by making Netflix’s marketing mix (4Ps) more effective in attracting more customers. Furthermore, the stakeholder group of communities and organizations gains access to more opportunities through this component of Netflix’s ESG and CSR strategy. The traits and core values of Netflix’s company culture (corporate culture) facilitate human resource support for talent development via this Fund for Creative Equity.

Science-driven carbon reduction is part of Netflix’s CSR and ESG goals, especially for business process sustainability. Carbon reduction helps satisfy the interests of the stakeholder groups of regulators and communities and organizations. For example, carbon reduction efforts help satisfy the ecological goals of regulators in some markets. Also, this program for Netflix’s ESG and CSR satisfies the environment-focused and sustainability interests of relevant stakeholder groups, like environmentalists, conservation organizations, and other communities. Netflix’s competitive strategy and growth strategies enable science-driven carbon reduction through cost-leadership efficiencies and sustainable product development processes.

Sustainability in content involves the promotion of sustainable lifestyles and practices through the movies and series available on Netflix’s streaming platform. This component of the company’s ESG and CSR strategy satisfies the stakeholder group of communities and organizations. For example, sustainability in Netflix’s entertainment content promotes the goals of environmental conservation, business ethics, and green operations that reflect the goals of environmental conservation organizations.

Regulatory compliance is a fundamental component of Netflix’s CSR and ESG strategy. This compliance relates to regulations and policies that promote sustainable business operations in the entertainment industry and beyond. In terms of Netflix’s ESG goals, regulatory compliance directly satisfies the interests of the stakeholder group of regulators regarding business organizations. On the other hand, regulatory compliance supports Netflix’s CSR goals for positive social impact by being a responsible corporate citizen.

Netflix’s ESG and CSR Performance

Netflix’s corporate social responsibility (CSR) performance satisfies stakeholders’ interests relating to social factors, like community development. Similarly, Netflix’s environmental, social, and corporate governance (ESG) goals satisfy stakeholders’ interests in business profitability, growth, and regulatory compliance. The company’s corporate citizenship and sustainability programs are considerable despite the digital nature of its business operations. Making the company’s operations more sustainable may require additional programs or initiatives targeting specific interests of stakeholders. Also, Netflix’s cultural traits help promote human resource development aligned to CSR and ESG objectives.