As world leaders prepare to meet in Glasgow next week to tackle the devastating effects of wildfires, floods and extreme weather caused by rising greenhouse gases, a rebellion has erupted within the world’s most influential consulting firm, McKinsey & Company, about its support for the planet’s biggest polluters.
More than 1,100 employees have signed an open letter to the company’s top partners, urging them to disclose how much carbon their customers are spewing into the atmosphere. “The climate crisis is our generation’s defining problem,” wrote the letter’s authors, nearly a dozen McKinsey consultants. “Our positive impact in other areas will mean nothing if we don’t act like our customers irrevocably change the planet.”
Several of the authors have resigned since the never-before-reported letter came out last spring — with one sending a widespread email citing McKinsey’s continued work with fossil fuel companies as a primary reason for his departure.
McKinsey Publicly Says It’s “Committed” protect the planet” and that it has been helping its customers with environmental issues for more than a decade. On October 15, it held a Climate Action Day, informing employees of progress towards the goal of having a net zero carbon footprint by 2030. Yet McKinsey’s own carbon footprint is minuscule compared to that of many of the companies it advises.
Until now, McKinsey has largely escaped scrutiny of its affairs with oil, gas and coal companies because it closely guards the identities of its customers. But internal documents reviewed by The New York Times, interviews with four former McKinsey employees, and publicly available documents such as lawsuits shed new light on the extraordinary magnitude of that work.
Of the top 100 corporate polluters in the past half century, McKinsey has advised at least 43 in recent years, including BP, Exxon Mobil, Gazprom and Saudi Aramco, which have generated hundreds of millions of dollars in fees for the company.
Across the globe, from China to the United States, McKinsey’s work with these companies often focuses not on reducing their environmental impact, but rather on reducing costs, increasing productivity and of the profit.
In 2018, those customers alone — excluding dozens of other polluters advised by McKinsey — were responsible for more than a third of global CO2 emissions, based on figures from the Institute for Climate Accountability, a non-profit organization that tracks corporate emissions and fossil fuels burned by customers of these companies.
DJ Carella, a spokesperson for McKinsey, said in a statement that reducing emissions worldwide will “require the engagement of high-emitting sectors to help them transition.”
“Running away from these sectors might appease absolutist critics,” he said, “but it would do nothing to solve the climate challenge.”
McKinsey is not the only one of the consultancies working with major polluters. Boston Consulting Group has also advised major carbon emitters, including Sonangol, Angola’s state oil giant. BCG notes that it is the “consultancy partner” for the United Nations Climate Change Summit in Glasgow.
Yet it is McKinsey, with his 95-year history and his position at the top of the consulting industry, that stands out. The corps of consultants, laced with Rhodes scientists and Harvard Business School luminaries, could focus their talents on helping the company’s oil, gas and coal customers reduce their emissions. But these well-funded clients, such as Chevron, Shell and Canada’s Teck Resources, hire McKinsey to achieve business goals often unrelated to global pressures to limit greenhouse gases.
McKinsey’s ties to the fossil fuel industry are deep. More than half a century ago, Mobil, Shell and Texaco helped propel McKinsey to the top of consulting firms.
Within weeks of resigning from his position as managing partner of McKinsey in 2018, Dominic Barton was… appointed chairman of Teck, a Vancouver-based company that blows up mountains in the Rockies to find coal for steel mills. Teck is one of the world’s largest exporters of coal for steelmaking, and in 2019 it was reported carbon footprint — when taking into account the coal burned by its customers — was equivalent to one-tenth of Canada’s greenhouse gas emissions.
The first full year after Mr. Barton arrived at Teck, McKinsey’s work there increased tremendously. His projects include one in a British Columbia mine called “Coal Processing Optimization”. Another assignment was simply ‘Drill and Blast’, according to McKinsey records. In his 2019 annual report, Donald R. Lindsay, CEO of Teck, says, said that a project McKinsey advised helped “improve productivity and reduce costs.”
In Asia, McKinsey circulated a video boasting that it had helped increase production at a coal company by 26 percent, according to a memo written in 2019 by Erik Edstrom, a outgoing McKinsey consultant who was concerned about the environmental impact of Company. “Looks like McKinsey helped our client win more, pollute more, presumably for a long time,” he wrote.
Mr Barton, who left Teck in 2019 when he was named Canada’s ambassador to China, did not respond to a request for comment from Canadian government press officers. A Teck spokesperson Chris Stannell said in a statement that the company is “committed to supporting global action on climate change, and we are taking action to reduce our GHG emissions, including the goal of being carbon neutral in all of our operations.” by 2050.”
Carella said it was “highly misleading” to focus on one company, Teck, “as evidence that McKinsey’s work is exacerbating climate change,” although The Times provided the consultancy with a list of 43 major carbon polluters that have recently been clients.
He said the company was investing in sustainability efforts and that until the world got rid of fossil fuels, “billions of people around the world, especially in emerging economies, will rely on the jobs, energy and materials that the companies you quote provide. .”
McKinsey’s power to influence the decisions of many of the biggest international polluters is why a group of about a dozen consultants sent out the open letter last spring. According to three former McKinsey employees, it gathered more than 1,100 co-signers as it spread across the company’s global operations.
The authors said McKinsey’s failure to address its customers’ emissions poses “serious risk to our reputation, our customer relationships and our ability to build ‘a great company that attracts, develops, excites and retains exceptional people’.” “. also gave McKinsey a “significant opportunity,” they wrote.
They suggested that McKinsey not only fix its own emissions, but also disclose the amount of carbon pollution its customers have produced in total and commit to helping them do their part to limit global temperature rise to 1.5 degrees Celsius. . Beyond that threshold, scientists say, the dangers of global warming would skyrocket.
McKinsey has “a moral obligation to take action to influence our customers’ emissions and to demonstrate the leadership our stakeholders expect of us,” the authors said.
On April 5, the company’s managing partner, Kevin Sneader, as well as his designated successor, Bob Sternfels, responded to the open letter. In a memo, they said they “share your view that the climate issue is the defining problem for our planet and all generations” and that they would discuss the company’s direction on climate change on Earth Day, April 22, in a company-wide “ask me.” something” event.
For that event, Mr. Sneader announced that McKinsey would help its customers reduce their emissions to meet the 1.5 degree target. “Our goal is to be the largest catalyst for decarbonisation in the private sector,” he said.
Mr. Sneader and Mr. Sternfels, who succeeded him in July, made it clear during the Earth Day call that McKinsey would continue to serve the big polluters. Their message: McKinsey had to keep working with them to stay relevant, according to a summary from The Times.
The McKinsey spokesperson said the company had already addressed the issues raised by the letter when it was sent, and created a new platform to help customers reduce their emissions. But the steps McKinsey took didn’t satisfy everyone.
In late July, Rizwan Naveed, one of the authors of the letter whose work at McKinsey focused on energy and decarbonization, emailed hundreds of colleagues. He left McKinsey — one of many such departures in recent months, former employees said.
“Looking at actual hours billed to the world’s largest polluters, it is very difficult today to argue that McKinsey is the ‘biggest catalyst for private sector decarbonisation’,” he wrote. “Maybe it’s the exact opposite.”