Scope3 Introduces Carbon Tracking for AI Technologies

Brian O’Kelley, an accomplished entrepreneur known for his previous venture, the ad platform AppNexus—which he sold to AT&T for approximately $1.6 billion—found inspiration during a yearlong course on supply chain management at MIT amid the COVID-19 pandemic. One specific slide from a lecture discussing the carbon footprint of a banana had a profound effect on him, prompting a reevaluation of his professional pursuits and aspirations for making a tangible impact on the world.

At that time, O’Kelley was leading a metal commodities trading platform he had founded, which focused on mitigating carbon emissions associated with trading and transportation. While he was initially satisfied with the platform's growth, which involved handling a substantial portion of copper imports into the U.S., he realized that the core issues related to carbon emissions were largely rooted in the mining and smelting processes. He recognized that despite his efforts in optimizing the trading aspects, the fundamental environmental challenges remained unchanged.

This realization ignited a new direction in O’Kelley’s thinking, leading him to contemplate how the digital advertising landscape could be transformed. Unlike the relatively fixed processes in the physical commodities market, the digital world presented opportunities for significant improvement. O’Kelley envisioned a platform designed to track carbon emissions specifically within digital advertising. This marked his return to the advertising sector but with a focus on sustainability and accountability.

In 2021, he pivoted away from the commodities business and leveraged the supply chain tracking technology he had developed to establish Scope3. The new venture aimed to address the prevalent inefficiencies and waste in the digital advertising space, highlighting that nearly 25% of spending on programmatic ads is wasted due to various factors, including intermediary fees, ad fraud, and ads that fail to reach consumers effectively. O’Kelley described the digital advertising industry as an economic and environmental mess, and he saw Scope3 as a solution to reclaim lost funds while simultaneously reducing carbon footprints through improved ad placements.

Scope3 operates by identifying waste in the advertising process and linking those inefficiencies to carbon emissions. By gathering extensive data and constructing models to analyze spending patterns, the company helps its clients ensure that their advertising dollars are being effectively utilized while also minimizing their environmental impact. O’Kelley noted that fewer, more targeted ads result in reduced power consumption by data centers, which aligns economic benefits with environmental sustainability.

Earlier this year, O’Kelley underwent unexpected heart surgery, which provided him with the opportunity to reflect on emerging trends, particularly in artificial intelligence (AI). With the advertising industry increasingly exploring the use of AI for ad generation, web page creation, and search functionalities, O’Kelley recognized that AI was becoming central to media and advertising. This intersection between media and AI sparked a new idea for Scope3’s potential direction.

During his recovery, O’Kelley decided to seek insights from GV, one of Scope3’s investors. Initially intending to gather competitive intelligence, he discovered a gap in the market: few founders were addressing the convergence of AI and climate tech. This realization led to a pivotal moment for Scope3, resulting in a $25 million funding round led by GV, with additional investments from other notable firms such as Aperiam Ventures, Craft Ventures, Room40 Ventures, Venrock, and Virgo Strategic Investments.

With this new funding, Scope3 is now focusing on integrating AI into its operations. Although the company is still in the early stages of developing its AI capabilities, O’Kelley believes that the pitch to clients will parallel its existing digital advertising approach. He anticipates a strong alignment between economic efficiency and environmental sustainability, suggesting that companies can benefit both financially and environmentally from utilizing AI-driven strategies in their advertising efforts.

As Scope3 continues to evolve, it aims to become a significant player in the intersection of digital advertising and sustainability, promising to enhance the industry by reducing waste and carbon emissions while ensuring that advertising spend is optimized for maximum impact.