Case study: Digital carbon emissions accounting journey

A major energy utility company operating all renewables technologies embarked on a journey to develop a Scope 3 emissions reduction strategy through 2030.

Their annual procurement spend (Scope 3 upstream) exceeds several billion USD, spanning categories, business units, regions, and suppliers. The goal was to understand their Scope 3 emissions baseline contributed by specific procured goods and services.

Within 12 weeks, the client was able to meet their goal and optimize their decarbonization strategy by balancing impact and cost of abatement.

McKinsey revolutionized how clients tackle Scope 3 emissions by integrating Spendscape, our proprietary procurement spend analytics solution, with Catalyst Zero, our end-to-end decarbonization solution, to provide carbon and sustainability analytics, including carbon emissions accounting. Clients can now see beyond procurement spend data to understand spend and consumption-based emissions drivers.

Our client was able to gain transparency into their estimated emissions baseline by mapping their spend activity to McKinsey’s proprietary database of 300,000+ spend- and consumption-based emission factors.

Identification and refinement of emission hotspots on a consumption basis increased the granularity and accuracy of the emissions baseline, and helped the client understand the drivers behind emissions.

These key material drivers were then linked with our proprietary database of 1,200 abatement levers to understand abatement business cases.