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Project Spotlight: Transition Plan Development

The Situation

A global chemicals manufacturer with global operations and emissions-intensive production processes (including significant Scope 1 process emissions and material scope 3 emissions from feedstock purchases) needed to develop a credible transition plan aligned with emerging requirements under the Corporate Sustainability Due Diligence Directive (CSDDD). Existing targets were not aligned with a 1.5°C pathway, and leadership lacked clarity on the emissions gap, required investment scale, and financial implications of transition decisions.

The Approach

Using the company’s existing GHG inventory, we constructed a bottom-up emissions forecast through 2050 based on production growth assumptions, planned facility expansions, and external market decarbonization projections. This model quantified the business-as-usual trajectory and served as the foundation for assessing the gap to a 1.5°C aligned pathway. Using sector decarbonization benchmarks and carbon budget methodologies, we translated a 1.5C pathway into near- and long-term targets between 2030 and 2050.

 

We then identified a portfolio of decarbonization initiatives, including process electrification, fuel switching, renewable energy procurement, feedstock substitution, and supplier engagement strategies. Each initiative was evaluated and prioritized based on emissions reduction potential, implementation feasibility and financial impacts (including capital expenditure, operating cost impacts, and cost savings). We also worked with cross functional stakeholders across departments such as engineering, design, procurement and risk to pressure test feasibility and identify potential implementation roadblocks, building buy-in for the final transition plan.

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Finally, we integrated the prioritized initiatives into a comprehensive carbon and financial model and phased roadmap through 2050. This included an assessment of annual CapEx and OpEx implications under scenarios with and without a shadow carbon price to test financial resilience and the development of a detailed implementation plan with defined metrics, interim milestones and assigned responsibilities.

Outcomes and Deliverables

​This project helped the client:

  • Identify and prioritize measures capable of closing over 6.7 million metric tons of CO2e by 2030 and more than 20 million metric tons by 2050

  • Quantify annual investment requirements and operating impacts under multiple scenarios

  • Support executive and board level discussions grounded in quantified tradeoffs between cost, timing, and emissions reduction

  • Understand the tradeoffs of committing to a credible, science aligned transition plan

Throughout the project, the client received: 

  • A detailed "business-as-usual" emissions forecast through 2050

  • 1.5°C aligned near- and long-term emissions targets, including interim milestones

  • A prioritized portfolio of decarbonization initiatives

  • A phased transition roadmap through 2050

  • A dynamic carbon and financial model, which included annual CapEx, OpEx, and savings assessment under shadow carbon price and no price scenarios

Why It Mattered

The transition plan translated regulatory pressure into a clear and quantified investment and risk management issue, allowing the company to make stronger and more informed decisions regarding capital allocation. In addition, the analytical tools developed enabled leadership to adapt its transition plan in the future as business conditions and policy landscapes evolve.

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This project represents one example of our work supporting companies with the development of decarbonization strategies. We have completed similar engagements across real estate, manufacturing, automotive, and energy service sectors.

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