Revealed: McKinsey clients had a ‘rising share of global emissions,’ internal analysis shows

The world’s biggest consulting firm found that its clients were on a trajectory to bust global climate targets, details of internal forecasting in 2021 uncovered by the Centre for Climate Reporting and the Guardian reveal.

McKinsey & Company has worked with some of the world’s biggest emitters, including many of the largest fossil fuel producers. It has previously argued it is necessary to engage these clients to help them transition to cleaner forms of energy and hit the target of limiting global warming to less than 1.5°C above pre-industrial levels.

But CCR and The Guardian have learned of an internal analysis of client emissions carried out by McKinsey in 2021 which showed that the companies the firm works with were set to exceed this target. Despite this, an internal email alleges that no senior members of staff were willing to “push the effort forward.”

The revelations follow an investigation published in the Guardian yesterday, based on more than a dozen interviews with former insiders, internal documents and hundreds of pages of court records which revealed new details about the firm’s work with the fossil fuel industry. Many of the world’s biggest fossil fuel producers have been significant sources of revenue for McKinsey, such as the world’s largest oil company Saudi Aramco, and oil majors Shell and BP, according to an analysis of bankruptcy court records.

“It is not a secret that McKinsey is in deep with Big Polluters, but now we know just how wide that hole is and how deep they’re digging,” said Rachel Rose Jackson from campaign group Corporate Accountability. “The more it continues to partner closely with and profit from the very actors condemning people and the planet, the more complicit it becomes. Now that these findings have shed a light on its dark corners, it must be held accountable.”

“We are serving a client portfolio that is likely on the 3 to 5 degrees warming trajectory”

A spokesperson for the firm told CCR and The Guardian: “We have been open about our work with fossil fuel clients and hard-to-abate sectors, and see no contradiction with our commitment to the energy transition. In decarbonization scenarios consistent with Paris Agreement levels, fossil fuel use is projected to decline, but will continue to be a part of the energy mix to meet the world’s energy needs.”

In 2020, a small team of McKinsey consultants began calculating the total emissions the firm’s clients were responsible for, multiple people with knowledge of the work told CCR. This included those classified as scope 3, where emissions released when fossil fuels are burned are counted against the producers. The consultants also predicted what emissions from these clients would look like in 2030, according to a widely distributed internal email sent by a departing member of the team and seen by CCR.

The international treaty signed in 2016 known as the Paris Agreement stated that in order to avoid the worst effects of climate change, countries must aim to keep global warming to 1.5°C above pre-industrial levels. But even taking into account its clients’ emissions reductions targets, the McKinsey team found its clients were set to far exceed this.

“We are serving a client portfolio that is likely on the 3 to 5 degrees warming trajectory depending on what you believe about the rest of the world’s trajectory – this portfolio contains more than half of the world’s worst polluters,” a copy of the email seen by CCR states. “Our clients have a commanding and rising share of global emissions, and knowing what we know today, have a big and widening gap to the Paris aligned pathway.”

The email said that the results were “hardly surprising” given that the world at large is not on track to hit the Paris goal but argues the firm has some responsibility for client emissions. It also alleged that McKinsey’s sustainability work was “being used to launder the Firm’s reputation, and wash away the problems posed by our more inconvenient engagements expanding emissions elsewhere.”

Since McKinsey completed the emissions analysis, the Paris target has become increasingly out of reach. Recently, some climate scientists have said it is now impossible to limit global warming to 1.5°C.

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McKinsey declined to comment on the findings of the internal emissions forecasting. A spokesperson said: “McKinsey has been helping our clients decarbonize, build climate resilience, and address sustainability challenges for more than a decade. Three years ago, we committed to rapidly scale this work to help clients in all industries reach net zero by 2050, and to help the world reach the goals aligned with the Paris Agreement.”

In 2021, the firm’s managing partner Bob Sternfels wrote: “Like it or not, there is no way to deliver emissions reductions without working with these industries to rapidly transition… So, we think it is important to be in the arena, not on the outside looking in.”

But since then, some of the firm’s major fossil fuel clients have also reportedly been slowing their push into cleaner energy. At times between 2019 and 2023, the oil company Shell has contributed significantly to McKinsey’s revenues in several countries, CCR’s analysis of the bankruptcy filings reveals. But Shell’s investment in its Renewables and Energy Solutions division reportedly dropped from $3.5bn in 2022 to $2.7bn last year. Recently, oil company BP, another significant client, reportedly ditched a target to cut oil and gas production by 2030 and now plans to scale back its energy transition strategy.

A spokesperson for Shell said: “Shell is committed to becoming a net-zero emissions energy business by 2050, a target we believe supports the more ambitious goal of the Paris Agreement.” BP did not respond to a request for comment.

Despite the findings of the internal emissions analysis, the email says that there were no senior partners at the firm “willing to sponsor the work” or “push the effort forward.”

The author of the email wrote that because of this he “joined a self-organized group of similarly motivated colleagues” who produced an open letter first reported by The New York Times in 2021.

The open letter alluded to the findings of the emissions analysis. “For several years, we have been telling the world to be bold and align to a 1.5°C emissions pathway; it is long overdue we take our own advice,” a copy of the letter obtained by CCR stated. It called for ways of holding the firm to account for promises it had made around helping clients in all industries reach net zero. The signatories asked to open up to public scrutiny data on the emissions its clients are responsible for and setting targets to help them align with a pathway to reach the Paris goal.

It was signed by more than 1,100 people at the firm. But a number of former McKinsey consultants told CCR that they felt the letter did little to move the needle internally on the issue. The firm still does not publicly disclose details on client emissions.

A statement on McKinsey’s website in response to the New York Times report in 2021 stated: “After this letter was sent, our leaders engaged with our colleagues to address their questions and explain our firm’s ongoing commitments on sustainability.”

“For several years, we have been telling the world to be bold and align to a 1.5°C emissions pathway; it is long overdue we take our own advice”

Both the open letter and the internal email attempted to hold the firm to account for its work helping some of the world’s biggest emitters boost production of fossil fuels. As CCR and The Guardian revealed yesterday, this has included working on a controversial Saudi government program designed to increase demand for fossil fuels in poorer countries.

The firm worked with the Oil Sustainability Program, which developed plans to facilitate investment in roads, airports, and the cars and planes to make use of them in Africa and Asia. It’s unclear specifically which plans McKinsey’s consultants advised on. An official from the Saudi program told undercover reporters last year that “one of the main objectives” of the program was to offset a decline in oil demand due to efforts to tackle climate change.

Over the last several years, McKinsey has also hired a raft of former petroleum engineers dedicated to helping often old, emissions-intensive oil fields become more productive and profitable.

Yet much of the firm’s work is kept hidden from public view. “While hydrocarbon producers face mounting pressure to transition their businesses,” the consultant wrote in the email in 2021, “we cannot ignore the role PR firms, consulting Firms, Law firms, private entities operating under cover of confidentiality with no transparency, play in helping heavy emitters prolong emissions.”