At McKinsey, widespread fury over working with the world’s biggest polluters


As world leaders prepare to meet in Glasgow next week to deal with the devastating impact of wildfires, floods and extreme weather conditions caused by rising greenhouse gases, a revolt is brewing prepares within the world’s most influential consultancy, McKinsey & Company, for its support of the world’s biggest polluters.

More than 1,100 and more employees have signed an open letter to the company’s key partners, urging them to disclose how much carbon their customers are releasing into the atmosphere. “The climate crisis is the defining problem of our generation,” wrote the letter’s authors, to nearly a dozen McKinsey consultants. “Our positive impact in other areas will mean nothing if we don’t act like our customers are irrevocably changing the earth.”

Several of the authors have resigned since the letter, which has never been reported before, came out last spring – one sent a widely shared email citing McKinsey’s continued work with the fuels companies. fossils as the main reason for his departure.

McKinsey publicly states that he is “committed to Protect the planet»And that it has supported its clients on environmental issues for more than a decade. On October 15, she hosted a Climate Action Day, informing employees of progress toward her goal of having a net zero carbon footprint by 2030. Yet McKinsey’s own carbon footprint is tiny by compared to that of many companies it advises.

Until now, McKinsey has largely escaped scrutiny of its dealings with oil, gas and coal companies as it closely monitors the identities of its clients. 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 extent of this work.

Of the 100 biggest polluting companies in the past half century, McKinsey has advised at least 43 in recent years, including BP, Exxon Mobil, Gazprom and Saudi Aramco, generating hundreds of millions of dollars in costs for the company. .

All over the world, from China to the United States, McKinsey’s work with these companies is often not focused on reducing their environmental impact, but rather on reducing costs, increasing productivity and l increase in profits.

In 2018, these customers alone – not counting the dozens of other polluters advised by McKinsey – were responsible for more than a third of global carbon emissions, according to figures from the Institute for Climate Responsibility, a non-profit organization that tracks corporate emissions and fossil fuels burned by corporate customers.

McKinsey spokesperson DJ Carella said in a statement that reducing emissions around the world “requires engaging with high-emitting sectors to help them make the transition.”

“Moving away from these sectors could appease absolutist criticism,” he said, “but that would do nothing to solve the climate challenge.”

McKinsey is not alone among consulting firms working with major polluters. The Boston Consulting Group has also advised major carbon emitters, including Angolan oil giant Sonangol. BCG Remarks that she is the “advisory partner” for the UN climate summit in Glasgow.

Yet it is McKinsey, with its 95-year history and its position at the top of the consulting world, that stands out. Its consulting corps, dotted with Rhodes scholars and leading figures from Harvard Business School, could focus its talents on helping the company’s oil, gas and coal clients reduce their emissions. But these well-funded clients, such as Chevron, Shell and Teck Resources of Canada, hire McKinsey to pursue business goals that often have little to do with global pressure to limit greenhouse gases.

McKinsey’s ties to the fossil fuel industry run deep. Over half a century ago, Mobil, Shell and Texaco helped propel McKinsey into the top ranks of consulting firms.

Weeks after stepping down as Managing Partner at McKinsey in 2018, Dominic Barton was appointed President 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 steel coal, and in 2019 its report carbon footprint – taking into account the coal burned by its customers – was equivalent to one tenth of Canada’s greenhouse gases emissions.

The first full year after Mr. Barton arrived at Teck, McKinsey’s work surged there. His projects included a project at a mine in British Columbia called “Coal Processing Optimization”. Another mission was simply labeled “Drill and Blast,” McKinsey records show. In his annual report for 2019, Donald R. Lindsay, Managing Director of Teck, noted that a project consulted by McKinsey helped “improve productivity and reduce costs”.

In Asia, McKinsey distributed a video boasting of helping to increase a coal company’s output by 26%, according to a 2019 memo written by Erik Edstrom, a departing McKinsey consultant who was concerned about the environmental impact. of the company. “It looks like McKinsey helped our client extract more, pollute more, probably for a long time,” he wrote.

Barton, who left Teck in 2019 when he was appointed Canada’s Ambassador to China, did not respond to a request for comment made through Canadian government press officers. A spokesperson for Teck, Chris Stannell, said in a statement that the company “is committed to supporting global action on climate change, and we are taking steps to reduce our GHG emissions, including fixing the aim to be carbon neutral in all our operations by 2050. ”

Mr Carella said it was “deeply 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 main carbon polluters who have recently been customers.

He said the company is investing in sustainability efforts and that until the world is free from fossil fuels, “billions of people around the world, especially in emerging economies, will depend on jobs, energy and materials supplied by the companies you mention. . “

McKinsey’s power to influence the decisions of many of the world’s biggest polluters is why a group of a dozen consultants sent out the open letter last spring. It has amassed more than 1,100 co-signers as it spread across the company’s global operations, according to three former McKinsey employees who requested anonymity to discuss confidential business matters.

The authors said that McKinsey’s inability to tackle customer emissions “poses a serious risk to our reputation, our relationships with our customers, and our ability to” build a great business that attracts, develops, excites and retains exceptional people “”. also presented McKinsey with an “important opportunity,” they wrote.

They proposed that McKinsey not only correct its own emissions, but also publicly disclose the amount of carbon pollution its customers have produced overall and commit to helping them do their part to limit the increase in carbon pollution. global temperature at 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 clients’ emissions and to show the leadership that our stakeholders expect of us,” the authors said.

On April 5, the firm’s managing partner, Kevin Sneader, along with 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 issue for our planet and all generations” and that they would discuss the company’s direction on the climate change on Earth Day, April 22, in a “company-wide request.” me anything ”.

Prior to this event, Mr. Sneader announcement that McKinsey would help its customers reduce their emissions to meet the 1.5-degree target. “Our goal is to be the private sector’s biggest catalyst for decarbonization,” he said.

Mr Sneader and Mr Sternfels, who succeeded him in July, made it clear during the Earth Day appeal 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 obtained by 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 measures taken by McKinsey have not been to everyone’s satisfaction.

In late July, Rizwan Naveed, one of the letter’s authors whose work at McKinsey focused on energy and decarbonization, emailed hundreds of colleagues. He was leaving McKinsey – one of many such departures in recent months, former employees said.

“After looking at the actual hours billed to the world’s biggest polluters, it’s very difficult to say today that McKinsey is the ‘biggest private sector catalyst for decarbonization’,” he wrote. “It could well be the exact opposite. “


About Author

Leave A Reply