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As world leaders put together to fulfill in Glasgow subsequent week to handle the devastating affect of wildfires, floods and excessive climate brought on by rising greenhouse gases, a revolt has been brewing contained in the world’s most influential consulting agency, McKinsey & Firm, over its assist of the planet’s largest polluters.
Greater than 1,100 staff and counting have signed an open letter to the agency’s prime companions, urging them to reveal how a lot carbon their shoppers spew into the environment. “The local weather disaster is the defining subject of our era,” wrote the letter’s authors, almost a dozen McKinsey consultants. “Our constructive affect in different realms will imply nothing if we don’t act as our shoppers alter the earth irrevocably.”
A number of of the authors have resigned because the letter, which has by no means earlier than been reported, got here out final spring — with one sending out a extensively shared e-mail that cited McKinsey’s continued work with fossil gas corporations as a main motive for his departure.
McKinsey publicly says that it’s “dedicated to defending the planet” and that it has helped its shoppers on environmental points for greater than a decade. On Oct. 15 it held a Local weather Motion Day, updating staff on progress towards its aim of getting a net-zero carbon footprint by 2030. But McKinsey’s personal carbon footprint is minuscule in contrast with that of lots of the corporations it advises.
Till now, McKinsey has largely escaped scrutiny of its enterprise with oil, fuel and coal corporations as a result of it carefully guards the id of its shoppers. However inner paperwork reviewed by The New York Instances, interviews with 4 former McKinsey staff and publicly obtainable data similar to lawsuits shed new mild on the extraordinary scope of that work.
Among the many 100 largest company polluters over the previous half-century, McKinsey has suggested at the least 43 in recent times, together with BP, Exxon Mobil, Gazprom and Saudi Aramco, producing a whole lot of tens of millions of {dollars} in charges for the agency.
Internationally, from China to the USA, McKinsey’s work with these corporations is usually not targeted on lowering their environmental affect, however fairly on chopping prices, boosting productiveness and rising earnings.
In 2018, these shoppers alone — not together with scores of different polluters suggested by McKinsey — had been answerable for greater than a 3rd of world carbon emissions, based mostly on figures from the Local weather Accountability Institute, a nonprofit that tracks company emissions and fossil fuels burned by prospects of those corporations.
D.J. Carella, a spokesman for McKinsey, mentioned in an announcement that lowering emissions worldwide “requires partaking with high-emitting sectors to assist them transition.”
“Strolling away from these sectors may appease absolutist critics,” he mentioned, “however it could do nothing to unravel the local weather problem.”
McKinsey isn’t alone amongst consulting corporations in working with main polluters. Boston Consulting Group has additionally suggested massive carbon emitters, together with Angola’s state-owned oil large, Sonangol. B.C.G. notes that it’s the “consultancy companion” for the United Nations’ local weather summit in Glasgow.
But it’s McKinsey, with its 95-year historical past and its place on the apex of the consulting world, that stands out. Its corps of consultants, peppered with Rhodes students and Harvard Enterprise College standouts, might focus their abilities on serving to the agency’s oil, fuel and coal shoppers reduce their emissions. However these well-funded shoppers, similar to Chevron, Shell and Canada’s Teck Sources, rent McKinsey to additional enterprise objectives that always have little reference to the worldwide push to restrict greenhouse gases.
McKinsey’s ties to the fossil gas sector run deep. Greater than a half-century in the past, Mobil, Shell and Texaco helped propel McKinsey into the highest ranks of consulting corporations.
Inside weeks of stepping down from his position as McKinsey’s managing companion in 2018, Dominic Barton was named chairman of Teck, a Vancouver-based firm that blasts mountains within the Rockies to seek out coal for metal mills. Teck is likely one of the world’s largest exporters of steel-making coal, and in 2019 its reported carbon footprint — when accounting for the coal burned by its prospects — was equal to one-tenth of Canada’s greenhouse fuel emissions.
The primary full yr after Mr. Barton arrived at Teck, McKinsey’s work there surged. Its tasks included one at a mine in British Columbia referred to as “Coal Processing Optimization.” One other task was merely labeled “Drill and Blast,” McKinsey data present. In its annual report for 2019, Donald R. Lindsay, Teck’s chief government, mentioned {that a} challenge that McKinsey consulted on helped to “enhance productiveness and decrease prices.”
In Asia, McKinsey distributed a video boasting that it had helped enhance manufacturing at a coal firm by 26 %, in accordance with a memo written in 2019 by Erik Edstrom, a departing McKinsey marketing consultant who was involved in regards to the agency’s environmental affect. “It seems that McKinsey helped our shopper extract extra, pollute extra, for presumably a very long time to come back,” he wrote.
Mr. Barton, who left Teck in 2019 when he was named Canada’s ambassador to China, didn’t reply to a request for remark made by Canadian authorities press officers. A spokesman for Teck, Chris Stannell, mentioned in an announcement that the corporate “is dedicated to supporting international motion on local weather change, and we’re taking motion to scale back our GHG emissions, together with setting the aim of being carbon-neutral throughout our operations by 2050.”
Mr. Carella mentioned it was “deeply deceptive” to concentrate on one firm, Teck, “as proof that McKinsey’s work exacerbates local weather change,” although The Instances offered the consulting agency with a listing of 43 main carbon polluters which have not too long ago been shoppers.
He mentioned that the agency was investing in sustainability efforts and that till the world weaned itself from fossil fuels, “billions of individuals world wide, particularly in rising economies, will depend on the roles, power, and supplies that the businesses you cite present.”
McKinsey’s energy to affect selections by lots of the largest worldwide polluters is the explanation a gaggle of a couple of dozen consultants despatched the open letter final spring. It gathered greater than 1,100 co-signers because it unfold throughout the agency’s international operations, in accordance with three former McKinsey staff.
The authors mentioned that McKinsey’s failure to handle its shoppers’ emissions “poses severe danger to our repute, our shopper relationships, and our means to ‘construct an ideal agency that draws, develops, excites, and retains distinctive individuals.’” However the second additionally offered McKinsey with a “important alternative,” they wrote.
They proposed that McKinsey not solely redress its personal emissions, but in addition publicly disclose the quantity of carbon air pollution that its shoppers produced in mixture and decide to serving to them do their half to restrict the worldwide temperature enhance to 1.5 levels Celsius. Past that threshold, scientists say, the risks of world warming would skyrocket.
McKinsey has “an ethical obligation to take motion to affect our shoppers’ emissions and to indicate the management our stakeholders anticipate of us,” the authors mentioned.
On April 5, the agency’s managing companion, Kevin Sneader, in addition to his designated successor, Bob Sternfels, responded to the open letter. In a memo, they mentioned that they “share your view that the local weather subject is the defining subject for our planet and all generations” and that they might focus on the agency’s path on local weather change on Earth Day, April 22, in a companywide “ask me something” occasion.
Earlier than that occasion, Mr. Sneader introduced that McKinsey would assist its shoppers cut back their emissions to fulfill the 1.5-degree aim. “Our purpose is to be the biggest private-sector catalyst for decarbonization,” he mentioned.
Mr. Sneader and Mr. Sternfels, who succeeded him in July, made it clear on the Earth Day name that McKinsey would proceed to serve the massive polluters. Their message: McKinsey needed to proceed working with them to remain related, in accordance with a abstract obtained by The Instances.
The McKinsey spokesman mentioned the agency had already addressed the problems the letter raised when it was despatched, and had created a brand new platform to assist shoppers reduce their emissions. However the steps McKinsey took didn’t fulfill everybody.
In late July, Rizwan Naveed, one of many authors of the letter whose work at McKinsey targeted on power and decarbonization, despatched an e-mail to a whole lot of colleagues. He was leaving McKinsey — one in every of a number of such departures in current months, former staff mentioned.
“Having appeared on the precise hours billed to the world’s largest polluters, it is extremely laborious to argue right this moment that McKinsey is the ‘biggest personal sector catalyst for decarbonization,’” he wrote. “It could be the precise reverse.”
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