英文零售商的气候路线图：描绘脱碳价值链的路径

SustainabilityPractice

Retailers’climateroad

map:Chartingpathsto

decarbonizedvaluechains

Mostemissionscapturedintheaverageretailer’sScope3metricaregeneratedviaproductvaluechains.Thesevaluechainscan

bedecarbonized—butonlywithtargetedmultistakeholderactions.

July2024

1

2

3

4

Contents

Acknowledgmentsii

Executivesummary1

Retailers’Scope3:14

Acomplexarrayofvaluechainemissions

Retailerchallengesinfocus:19

DelineatingScope3emissionsinthreevaluechains

Near-termopportunitiesforretailers:32

Reducingemissionsacrossvaluechains

Catalyzingbroaderdecarbonization:Strategies40

andconsiderationsforretailers

Appendix63

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechainsi

Acknowledgments

TheresearchforthisreportwasledbyPeterSpiller,apartnerinMcKinsey’sFrankfurtoffice,andSteve

Hoffman,apartnerintheLosAngelesoffice,with

CarolineLing,aconsultantintheNewYorkCityoffice;PhilippeDiez,aseniorclientdevelopmentadviser

intheParisoffice;andVarunMathur,anassociatepartnerintheAustinoffice.TheyweresupportedinthisbyKarlMurray,MekalaKrishnan,MiquelFerrer,NehaChatterjee,OlorunyomiJoel,andPer-AndersEnkvist—withoutwhomthisreportwouldnothavebeenpossible.

Thisreportisindependent,reflectstheviewsofthe

authors,andhasnotbeencommissionedorinfluencedbyanybusiness,government,orotherinstitution.

Wegratefullyacknowledgetheexpertise,insights,andfeedbackprovidedbythefollowingindividuals:

NameOrganization

AngéliqueDiarra

CarineKraus

KathleenMcLaughlin

AmanSingh

BertrandSwiderski

Carrefour

Carrefour

Walmart

Walmart

Carrefour

RonaldVoglewedeWalmart

Wealsogratefullyacknowledgethefollowing

individualsandorganizationsfortheirinvaluablecontributions:

NameOrganization

ChristopherAdamo

JimAndrews

PankajBhatia

KateBrandt

TysonFoods

JuanFacundo

Danone

Etchebehere

SimonFischweicher

ProjectDrawdown

WorldResources

AlexanderFrantzen

Institute

Unilever

WeMeanBusiness

MaríaMendiluce

Coalition

TysonFoods

EnvironmentalDefense

ElizabethSturcken

Fund

WorldWildlifeFund

PepsiCo

WorldResourcesInstitute

Google

StephanieCouch

ThomasLingard

JonathanFoley

KatherinePickus

CDPWorldwide

ChrisCassell

Danone

Lowe’s

n/a

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechainsii

Executivesummary

Ascompaniesinallsectorsworktoshrinktheircarbonfootprintsandhittheirdecarbonizationtargets,the

pathtoreducingScope3emissionsisoftenanythingbutstraightforward.Forsome,decarbonizingScope3emissionscanbemorelikenavigatingaparticularlybyzantinemaze.Suchisthecaseforretailers.

Fortheaverageretailer,Scope3metricscaptureemissionsgeneratedupstreamanddownstreamwithinthevaluechainsofeverySKUitsells—

numerous,disparate,andsometimeshighly

fragmentedvaluechainswithmultipletiersof

suppliersandinputs.Andtheemissionsgenerated

withinthislabyrinthofvaluechainsspansixenergyandland-usesystems:agricultureandforestry,building,

industry,mobility,power,andwaste(ExhibitE1).

Scope3emissionsare,bydefinition,indirect

greenhousegas(GHG)emissionsthataregeneratedwithinacompany’svaluechain;unlikeScope1and

ExhibitE1

Aretailer’sScope3metricencompassesemissionsgeneratedbymanyindustries.

Totalretailsectoremissions,millionmetrictons(Mt)CO₂

7,755

Operatingemissions

(typicallyconsideredScope1and2inindividualretaildisclosures)

Retailoperationalemissions(electricityuse,refrigeration,transportation,on-sitefuel)

Valuechainemissions

(typicallyconsideredScope3inindividualretaildisclosures)1

98%7,631

Emissionsgeneratedbyothersto

produceandconsumeproductssoldthroughretail(industry,powerfor

factories,powerforconsumer

households,agricultureandforestry,building,mobility)

2.0

Retail,Scopes1and2

Waste(eg,landfill,incineration)

Building(eg,construction,heatingandcooling)

Mobility(eg,heavydutytrucks,aircraft,shipping)

Power(eg,electricity,naturalgas)

Agricultureandforestry(eg,cornfarming,livestockrearing)

Industry(eg,chemicals,textiles)

Globalgreenhousegasemissions,%

3.9

4.9

14.8

22.6

23.6

28.5

Note:Gasolineretailwasnotincludedincalculations.Figuresmaynotsumto100%,becauseofrounding.

1Aggregateandsectoremissionswereconsideredonaregionalbasisratherthanonacompany-by-companybasis,anddoublecountingwasavoided.

Source:“Climatechange,”Walmart,updatedDecember15,2023;“Globalgreenhousegasoverview,”UnitedStatesEnvironmentalProtectionAgency,updatedApril11,2024;“Thenet-zerotransition:Whatitwouldcost,whatitcouldbring,”McKinseyGlobalInstitute,January2022;Walmartclimatetransitionanalysis,PlanetTracker,November3,2023;Walmart,Inc.-Climatechange2021,CDPDisclosureInsightAction,2021

McKinsey&Company

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains1

2emissions,companiesdonotdirectlycontrolthese

emissions.Consequently,reducingScope3emissions

dependsontheengagementandeffortsofallvaluechain

actors,includingsuppliers,distributors,andconsumers,aswellasotherpublicandprivatesectoractors—a

retailercannotrealizethesereductionsinisolation.

ThebreadthandcomplexityoftheirScope3emissions

havefar-reachingimplicationsforretailersinareasincludingeconomic,strategic,brandandreputation,andregulatorycompliance.Thisiswhyretailers

worldwidehaveembracedtheopportunitiesin

thesechallenges,pursuingambitioussustainabilitygoalsandwide-ranginginitiativesthathaveled

tomeaningfulreductionsinproductvaluechain

emissions.Theireffortsincludeengagingsupplierstoimproveenergyefficiencyinmanufacturingandtransportation,reducewaste,andtransitionto

renewableenergysources.

Somedecarbonizationefforts,suchasconverting

powergridstorenewableorcleanenergyin

geographieswheresuppliersareconcentrated,are

longer-termeffortsthatdependgreatlyontheactionsanddecisionsofmultiplepublicandprivatesector

players.However,manydecarbonizationsolutionsarewithinreachofretailvaluechainstakeholders—and

areeithercost-neutralorcost-savingtoimplement.

Framedwithinsevenstrategicdecarbonizationaction

themes,thisreportillustrateshowretailersandothervaluechainstakeholderscouldstrategicallydeployeconomicresources,naturalandphysicalresources,humanresources,low-carbontechnology,and

datatransparencytorealizeemissionsreductions.Becausethescale,complexity,andkeyplayersfor

theseeffortsvary,sodoestheretailer’sroleinthe

efforts,rangingfromleadingandscaling,toconveningvaluechainpartners,tocollaboratingandcatalyzing,toadvocatingandsupportingactionsforreducing

emissionsacrossretailvaluechains.

Reducingtheaverageretailer’sScope3emissions

by15percentatasystemlevelisfeasibleby2030

usingexistingtechnologies;however,innovationsin

technologiesandpracticescouldenableanadditional40or50percentreduction.

Retailers’Scope3:Acomplexarrayofvalue-chainemissions

Retailers’reportingrequirementsarespecifiedin

theGreenhouseGasProtocol’sCorporateValue

Chain(Scope3)AccountingandReportingStandard

andISO14064,theinternationalstandardseriesfor

quantifyingandreportinggreenhousegasemissions

andremovals.Underthesestandards,aretailer’s

Scope3emissionsmetriccapturesallGHGgeneratedfromsourcing,making,transporting,housing,selling,andusingeveryproducttheretailercarriesthroughoutitslifecycle.

Thismeansthatforamulticategoryretailer,reducingScope3emissions—whichincludesourcesthatmakeuparound98percentoftotalemissionsinretail—

involvesplayersfrommultiplesectorsandindustries

andentailseffortstodecarbonizesixenergyand

land-usesystems.Andabout80percentofaretailer’sScope3emissionsaregeneratedupstreaminproductvaluechainsviafeedstockproduction,materialsand

components,processingandmanufacturing,andpackaging(ExhibitE2).

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains2

ExhibitE2

Retailers’Scope3emissionsreflectwide-rangingdiferencesinproductionandconsumptionwithinproductchannels.

Totalgreenhousegas(GHG)emissions,breakdownby13retailchannels,1%

Scopes

1and2

Scope3

(upstream)

Scope3

(downstream)

100%inmillionmetrictonsCO₂equivalent

ShareoftotalglobalGHG

emissions,%

Automotiveretail<1

97

3

2,0745.0

Foodretail

3

67

30

1,649

4.0

Consumerstaplesmerchandiseretail

2

74

24

1,629

4.0

Broadlineretail

1

85

724

2.0

Restaurants

1

79

20

527

1.0

Homeimprovementretail

1

14

85

400

1.0

Computerand

electronicsretail

1

18

81

253

0.6

Otherspecialtyretail

2

29

69

213

0.5

Apparelretail

2

67

31

185

0.5

Apparel,accessories,andluxurygoods

2

7028

142

0.4

Drugretail

3

97

0

83

0.2

Homefurnishingretail

3

72

26

73

0.2

32

Footwear

2

67

340.1

Note:Figuresmaynotsumto100%,becauseofrounding.Automotivereflectsdownstreamfossilfueluse;foodandstaplesreflectupstreammanufacturing

andfarming.

1Inthescopeofthispaper,thedefinitionof“retail”basedontheGlobalIndustryClassificationSystemincludesautomotiveretail;consumerdiscretionary

distributionandretail(includingbroadlineretail,specialtyretail,andhomeimprovementretail);consumerdurables,suchasapparelandluxurygoods(includingaccessoriesandfootwear);consumerstaplesdistributionandretail(includingconsumerstaplesmerchandiseretail,drugretail,andfoodretail);andrestaurants.

Source:CDPWorldwide;McKinseyanalysis

McKinsey&Company

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains3

Retailerchallengesinfocus:DelineatingScope3emissionsinthreevaluechains

Eachofthemillionsofproductvaluechainswhose

emissionsarecapturedinaretailer’sScope3containsmultipletiersofsuppliersandinputsfromregions

aroundtheglobe.Thecommoditiesinvolvedareoftenmixedtogetherinagriculturalareasoratshipping

ports,andeachtierwithinavaluechaincanbehighlyfragmented.Additionally,supplierscanchangetheir

sourcesforinputswithinthecourseofasingleyear.

Thiscomplexitymakesitchallengingforretailersto

influencehowsuppliershandleorreportonemissions.

Consumers’useofproducts—poweringelectronicsorwashinganddryingclothing,forexample—isalsocapturedintheScope3emissionsforretailersthat

carrysuchproducts.Thus,reducingdownstream

productvaluechainemissionsoftendependson

influencingchangesinconsumerbehaviororthe

energysourcespoweringthelocalelectricitysupply.

Amongretailers’top15mostcommonlysoldproducts,beefisoneofthelargestsourcesofScope3emissionsforretailers.Around86percentofbeefvaluechain

emissionsaregeneratedupstreambyanimalfeed

farmingandproduction,fertilizerproduction,andcattleranching,accordingtoMcKinseyanalysis.Reducing

ruminantmethaneemissionsandshiftingtowardmore

efficientuseofagriculturalinputs,maximizingproductivity,andadoptingregenerativeagriculturepracticessuchasno-orlow-tillsoilandcovercroppingarekeytorealizingreductionsinthisvaluechain(ExhibitE3).

ExhibitE3

Around86percentofretailers’Scope3emissionsfromthebeefvaluechainaregeneratedbyupstreamsuppliers.

Shareofbeefvalue-chainemissionsbyscopeforgivensupplierorretailer,%

Scopes1and2

Scope3(downstream)Scope3(upstream)

3

3

3

7

1

6

13

1

51

22

4

10

74

10

86

Foodwaste

constitutesthe10%Scope3

downstream

emissionsinthebeefvaluechain

10

AnimalfeedinputAnimalfeed(eg,BeefcattleSlaughterandRetailerFoodwaste

ranching(cattlefarmer,cattle

ranchtrader)

meatprocessing(meatpacker)

silage)production

(cropgrower,animalfeedtrader)

(includingretailandconsumerloss)

production(seedgrower,fertilizermanufacturer)

Tier7Tier6Tier5Tier4Tier3Tier2Tier1

Suppliertier

Exampleplayer

manufacturergrowerfeedfarmerranchpacker

SeedSeedtradertrader

groweraggregator

Totalbeefvalue-chainemissions,metricton

FertilizerCropAnimalCattleCattleMeatHouseholds

8–10

33–34

38–52

4–5

29–37

(Mt)CO₂equivalent/

Mtproduct

McKinsey&Company

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains4

Inelectronicsproductvaluechains,decarbonizing

poweruseisretailers’primarychallenge.Themajority(80to90percent)oftheaverageretailer’sScope3

emissionsforelectronicsproductsaregenerated

upstreamviasuppliersinhighlyfragmentedmarkets.Decarbonizationinthisstageofthevaluechainlargelydependsontheavailabilityofrenewableenergywheresuppliersoperate(ExhibitE4).

ExhibitE4

Morethan80percentofemissionsintheelectronicequipmentvaluechainaregeneratedupstream,primarilybytier-twosuppliersandabove.

Shareofelectronicequipmentvalue-chainemissionsbyscopeforgivensupplier,retailer,orproductlifecycle,%

Outofaretailer’s88%Scope3upstreamemissions:PCBA(printedcircuitboardassembly)=80%,othermaterials(eg,steel,battery,glass,magnesium,

aluminum,plastic,etc)=8%

ThekeyemissionhotspotintabletupstreamemissionsisthePCBAat~90%becauseof

energy-intensiveandfossil-dependentproductionofsemiconductorsinAsia

Scope3(upstream)

Scope3(downstream)Scopes1and2

1

5

43

57

88

94

1

10

11

1

82

12

6

Rawmaterial

Basicmaterials

Electronics

Retailer

ProductEndoflife

production(eg,mining,

manufacturing:

manufacturingand

usage(energy

chemicals,crudeoil)

foundry(metals,PCBA,plastics)

distribution(transport,packaging)

consumption)

SuppliertierTier3Tier2Tier1

Exampleplayer

Aluminum

producer

Industrialchemicalsproducer

Metals(eg,aluminum)

foundryPCBA

Retailer

Electronicsmanufacturerordistributor

Utilitiesprovider

--bHouseholds-bWaste

managementcompany

Utilities

provider

manufacturer

Plasticsmoldingcompany

Utilitiesprovider

Metal(eg,silicon)mining,smelting,

refiningcompany

Oilandgascompany

Utilitiesprovider

McKinsey&Company

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains5

Likewise,intheapparelproductvaluechain,around62percentofemissionsaregeneratedupstreamviaenergyuseamongtier-twoandtier-threesuppliersengagedingarmentprocessingandfiberproduction(ExhibitE5).

Thus,substantialreductionsinretailers’Scope3

emissionswillrequiretransformationsinenergyandland-usesystemsinvolvingeffortsamongmanyvaluechainstakeholders.

ExhibitE5

Around73percentofretailers’Scope3emissionsintheapparelvaluechainaregeneratedupstream,mostlybytier-twosuppliersandabove.

4

Scopes1and2

Scope3(downstream)Scope3(upstream)

Shareofapparelvalue-chainemissionsbyscopeforgivensupplierorretailer,%

50

Notintheapparelvaluechain1

20

Productusage:

energyconsumption(eg,washerand

dryer)

12

3

Endoflife

6

5

23

73

ClothingindustryRetailer

anddistribution

Textilefiber

manufacturing

Cropand

chemicalsinputproduction(eg,seed,fertilizer,crudeoil)

Fiberraw

material

production

(eg,cotton,

polyethyleneterephthalate[PET]pellets)

Textilefiber

producer

Textiledye

manufacturer

ApparelRetailerHouseholds-Waste

manufacturermanagement

ordistributorUtilitiesprovidercompany

SuppliertierTier5Tier4Tier3Tier2Tier1

Exampleplayer

Utilitiesprovider

Fertilizermanufacturer

SeedSeedaggregatorgrower

Oilandgascompany

Crop

grower

PET

producer

Utilitiesprovider

1Scope3emissionsforretailerswhosellwashersanddryers.

McKinsey&Company

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains6

Near-termopportunitiesforretailers:

Reducingemissionsacrossvaluechains

Thisreportidentifiessevendecarbonizationactionthemesforreducingtheaverageretailer’sScope

3emissions;thethemesarebasedonanalysisof

technicallyfeasiblechangeleversinseveralproductvaluechains.Thehighestreductionpotential

comesfromtransitioningtocleanandrenewable

energy,reducinglivestockemissions,andadoptingregenerativeagriculturepractices.Examples

areprovidedtoillustrateemissionsreductionopportunities(ExhibitE6).

Asnotedpreviously,ifallweredeployedatscale,theseactionscouldpropela55to65percentreductionin

theaverageretailer’sScope3emissionsby2030,

althoughsomeactionscarrysizablecosts.Actions

thatreduceordonotincreasecostsinthesystem

couldyielda12to17percentreductionintheaverageretailer’sScope3emissionsby2030.

Thehighestreduction

potentialcomesfrom

transitioningtoclean

andrenewableenergy,

reducinglivestockemissions,andadoptingregenerativeagriculturepractices.

Retailers’climateroadmap:Chartingpathstodecarbonizedvaluechains7

ExhibitE6a

Deployingchangeleverswithinsevendecarbonizationthemescouldenabledirectemissionsreductionsorcatalyzereductionsinvaluechainsystems.

Keyexamplesofleversbyenablersofemissionsreduction1

DecarbonizationthemesEconomicresourcesNaturalandphysicalresourcesHumanresources

$150permetrictonofCO₂abatedtoelectrifyameatplantoutputting~5billionpoundsofbeefannually

Skilledworkforcetofill33million

projectedjobgainsaspowergenerationmayroughlydoubleby2050

~2×thecurrentpowergenerationcapacityfromrenewablesin

thenextfewdecadestofullycleangridandtosupportpotential

mill-decarbonizationtargetswhere

mosttextilemillsarelocated

Transitioningtocleanandrenewableenergy

$85,000to$170,000totalinvestment,

atarateof$401permetricton

ofCO₂abated,foraUSbeefcattlerancherwith50–100cattleand

120–240acrestoreducefarming

emissionsfromlivestockmanagementusingcurrenttechnology

3×morelandand30%morecattleforanextensive,unmodified

grass-fedpasturesystemvsa

feedlotsystemtoproducethesameamountofbeefannually4

Reducingfarming

emissionsfromlivestockmanagement

Trainingandskilldevelopmentinareassuchasefficiencybreeding,adaptivegrazing,andprecisiontechnologiestofilltheprojected27millionjobsgainedby2050

Potentialsavingsof~$180per

metrictonofCO₂abatedforacottongrowerinAsiawith1.5hectaresof

landandanannualproductionof445kgoflintperhectare

1.035–1.055×morelandthanusedin

conventionalagriculturetocompensateforapotential3.5–5.5%yieldloss

duringtheinitial3-to5-yeartransitionperiodtoregenerativeagriculture

dependingoncrop,soil,and

geographiccontext

Technicalexpertiseinadoptingprecisionfarming,includinguseofvariable-rate

fertilization,predictivemodeling,sensors,andGPStechnology

Adoptingregenerative

practicesinplant-basedagriculturalinputs

~$201permetrictonofCO₂abated

touserecycledcottonfibers,

recycledPET,2andrecycled

cardboardinpackaginginapparelmanufacturing

122%increaseincapacityforplasticpackagingrecyclingfortheEUtohitits2030targetofrecycling55%

plasticpackaging

1in5garmentstradedviaacircularbusinessmodeltoalignwitha1.5°pathwayby2030

Reducingwasteand

~$59permetrictonofCO₂abated

72%–73%increaseinEUrecycling

40%improvementinwastecollectionby

increasingprocess

toreducefoodwasteinthebeef

rate,enabledbyincreasesincapacity

2030viatrainingandincentivesfor

efficiency

supplychainby15%–20%3

andtechnologytoreducepre-andpostconsumerwaste,tomeettheEU’s2030residual-wastetarget

garmentfactoryemployees

Reducingemissionsintransportation

$111permetrictonofCO₂abatedtoelectrifytransportinthebeef,

electronics,andapparelvaluechains

384newminestosupplyrareearthelementsforelectric-vehicle(EV)

batteries

Upskillingandtrainingtoensurethe

numberofdrivers,operators,andothersisadequatetodeployandmaintain

EVsatscale,ie,theskilledworkforce

tofill9millionprojectedjobgainsin

EVmanufacturingandthemobility

ecosystem(eg,smartcharging)by2050

$30billionto$55billionin2030and$250billionto$300billionin2050incapitalinvestmentinalternative

proteins(includingplant-based,

fermentation,andcultivated),withrangesbasedonachievinga2°Cpathwayanda1.5°Cpathwayandabatingupto7metricgigatonsofCO₂equivalent

10–15×increaseincurrentconsumeradoptionrateforplant-basedproteinsby2030toremainona1.5°pathway

Atleast810factorieswithanaverageannualproductionof30,000metric

tonstosupportscalingofplant-basedproteinproductiontoachieve2030

productiontargets

Transitioningfromanimalproteintoplantprotein

products

Increasingcircularityofproductsandpackaging

1Forfurtherdiscussionofpotentialactionsandrolesforvaluechainstakeholders,seechapter4ofthisreport.2Polyethyleneterephthalate.

3ApproximationbasedonEnvironmentalProtectionAgencyestimatethatthemediancostoffoodwasteacrossallfoodcategoriesis$1.17perlb;averagegreenhousegasemissionspertonofbeef(2,000lbs)=40metrictonsofCO₂equivalent.

4Theamountoflandneededcouldbesignificantlyreducedifrotationalgrazingwereadoptedratherthananextensiveunmodifiedpasturesystem.Theacreageneededwoulddependonthenumberofcowsperacretherotationalgrazingsystemcouldsupport.

Source:CandaceAdams,“Howmanyacresdoyouneedpercowwhenraisingcattle?,”Herdx,accessedMay30,2024;RoryClune,ViktorHanzlík,andRafaelWinter,“Power,”McKinsey

Quarterly,August1,2022;ColumbiaClimateSchool;EnvironmentalProtectionAgency;EuropeanEnvironmentAgency;Fashiononclimate:Howthefashionindustrycanurgentlyacttoreduceitsgreenhousegasemissions,ajointreportfromMcKinseyandGlobalFashionAgenda,2020;RachaelD.GarrettandMatthewN.Hayek,“Nationwideshifttograss-fedbeefrequireslarger

cattlepopulation,”EnvironmentalResearchLetters,July2018,Volume13,Number8;GoodFoodInstitute;I;JoshuaKatzandPeterMannion,“Foodandagriculture,”

McKinsey,August1,2022;RussellKnight,“Sectorataglance,”USDAEconomicResearchService,updatedAugust30,2023;TimoMöllerandPatrickSchaufuss,“Roadmobility,”McKinsey,

August1,2022;ProjectDrawdown;“Reducingagricultureemissionsthroughimprovedfarmingpractices,”McKinsey,May6,2020;“RenewableenergyinIndia,”InvestIndia,accessedMay29,2024;G.R.SinhaandSilviaLiberataUllo,“AdvancesinsmartenvironmentmonitoringsystemsusingIoTandsensors,”Sensors,2020,Volume20,Number11;“Thenet-zerotransition:Whatitwouldcost,whatitcouldbring,”McKinseyGlobalInstitute,January2022;“There’sroomforimprovementinapopularclimate-smartagriculturalpractice,Stanford-ledstudyshows,”Stanford

Report,November8,2022;USGovernmentAccountabilityOffice;BridgetVandenbosch,“Unlockingthecirculareconomy’spotentialwithadata-drivenapproachtorecycling,”RecyclingToday,July26,2023;StevenWallanderandChristineWhitt,“StudyexamineshowandwhereU.S.cow-calfoperationsuserotationalgrazing,”USDAEconomicResearchService,November21,2022;WorldBusinessCouncilforSustainableDevelopment;WorldEconomicForum;McKinseyanalysis

McKinsey&CompanyRetailers’climateroadmap:Chartingpathstodecarbonizedvaluechains8

ExhibitE6b

Deployingchangeleverswithinsevendecarbonizationthemescouldenabledirectemissionsreductionsorcatalyzereductionsinvaluechainsystems.(continued)

Keyexamplesofleversbyenablersofemissionsreduction1

DecarbonizationthemesLow-carbontechnologyDatatransparency

A4–7×increaseinadoptionofadvancedtechnologiessuchaswindandsolartosupportmanufacturinghubs

Useofbigdataanalytics,AI,machinelearning,anddigitaltechnologyintheenergy,materials,andmobilitysectorstopotentiallyreduceglobalemissions20%by2050

Transitioningtocleanandrenewableenergy

Asystemforsharingtools,completeandreliabledata,

andreportingstructurestransparentlyamongretailvaluechainstakeholders

4–7×higheradoptionoffarmingtechnologiessuchasselectivebreeding,fatsupplementsinfeedmix,red

algae,systemsformonitoringanimalhealth,and

adaptivegrazingtocontributetoa20%reductionintotalemissions