As world leaders prepare to meet in Glasgow next week to address the devastating impact of wildfires, floods and extreme weather caused by rising greenhouse gases, a revolt has been brewing inside the worldâ€™s most influential consulting firm, McKinsey & Company, over its support of the planetâ€™s biggest polluters.
More than 1,100 employees and counting have signed an open letter to the firmâ€™s top partners, urging them to disclose how much carbon their clients spew into the atmosphere. â€œThe climate crisis is the defining issue of our generation,â€ wrote the letterâ€™s authors, nearly a dozen McKinsey consultants. â€œOur positive impact in other realms will mean nothing if we do not act as our clients alter the earth irrevocably.â€
Several of the authors have resigned since the letter, which has never before been reported, came out last spring â€” with one sending out a widely shared email that cited McKinseyâ€™s continued work with fossil fuel companies as a primary reason for his departure.
McKinsey publicly says that it is â€œcommitted to protecting the planetâ€ and that it has helped its clients on environmental issues for more than a decade. On Oct. 15 it held a Climate Action Day, updating employees on progress toward its goal of having a net-zero carbon footprint by 2030. Yet McKinseyâ€™s own carbon footprint is minuscule compared with that of many of the companies it advises.
Until now, McKinsey has largely escaped scrutiny of its business with oil, gas and coal companies because it closely guards the identity of its clients. But internal documents reviewed by The New York Times, interviews with four former McKinsey employees and publicly available records such as lawsuits shed new light on the extraordinary scope of that work.
Among the 100 biggest corporate polluters over 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 fees for the firm.
Across the world, from China to the United States, McKinseyâ€™s work with these companies is often not focused on reducing their environmental impact, but rather on cutting costs, boosting productivity and increasing profits.
In 2018, those clients alone â€” not including scores of other polluters advised by McKinsey â€” were responsible for more than a third of global carbon emissions, based on figures from the Climate Accountability Institute, a nonprofit that tracks corporate emissions and fossil fuels burned by customers of these companies.
D.J. Carella, a spokesman for McKinsey, said in a statement that reducing emissions worldwide â€œrequires engaging with high-emitting sectors to help them transition.â€
â€œWalking away from these sectors might appease absolutist critics,â€ he said, â€œbut it would do nothing to solve the climate challenge.â€
McKinsey isnâ€™t alone among consulting firms in working with major polluters. Boston Consulting Group has also advised big carbon emitters, including Angolaâ€™s state-owned oil giant, Sonangol. B.C.G. notes that it is the â€œconsultancy partnerâ€ for the United Nationsâ€™ climate summit in Glasgow.
Yet it is McKinsey, with its 95-year history and its position at the apex of the consulting world, that stands out. Its corps of consultants, peppered with Rhodes scholars and Harvard Business School standouts, could focus their talents on helping the firmâ€™s oil, gas and coal clients cut their emissions. But these well-funded clients, such as Chevron, Shell and Canadaâ€™s Teck Resources, hire McKinsey to further business goals that often have little connection with the global push to limit greenhouse gases.
McKinseyâ€™s ties to the fossil fuel sector run deep. More than a half-century ago, Mobil, Shell and Texaco helped propel McKinsey into the top ranks of consulting firms.
Within weeks of stepping down from his role as McKinseyâ€™s managing partner in 2018, Dominic Barton was named chairman of Teck, a Vancouver-based company that blasts mountains in the Rockies to find coal for steel mills. Teck is one of the worldâ€™s biggest exporters of steel-making coal, and in 2019 its reported carbon footprint â€” when accounting for the coal burned by its customers â€” was equivalent to one-tenth of Canadaâ€™s greenhouse gas emissions.
The first full year after Mr. Barton arrived at Teck, McKinseyâ€™s work there surged. Its projects included one at a mine in British Columbia called â€œCoal Processing Optimization.â€ Another assignment was simply labeled â€œDrill and Blast,â€ McKinsey records show. In its annual report for 2019, Donald R. Lindsay, Teckâ€™s chief executive, said that a project that McKinsey consulted on helped to â€œimprove productivity and lower costs.â€
In Asia, McKinsey distributed 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 departing McKinsey consultant who was concerned about the firmâ€™s environmental impact. â€œIt appears that McKinsey helped our client extract more, pollute more, for presumably a long time to come,â€ he wrote.
Mr. Barton, who left Teck in 2019 when he was named Canadaâ€™s ambassador to China, did not respond to a request for comment made through Canadian government press officers. A spokesman for Teck, Chris Stannell, said in a statement that the company â€œis committed to supporting global action on climate change, and we are taking action to reduce our GHG emissions, including setting the goal of being carbon-neutral across our operations by 2050.â€
Mr. Carella said it was â€œdeeply misleadingâ€ to focus on one company, Teck, â€œas evidence that McKinseyâ€™s work exacerbates climate change,â€ though The Times provided the consulting firm with a list of 43 major carbon polluters that have recently been clients.
He said that the firm was investing in sustainability efforts and that until the world weaned itself from fossil fuels, â€œbillions of people around the world, especially in emerging economies, will rely on the jobs, energy, and materials that the companies you cite provide.â€
McKinseyâ€™s power to influence decisions by many of the biggest international polluters is the reason a group of about a dozen consultants sent the open letter last spring. It gathered more than 1,100 co-signers as it spread across the firmâ€™s global operations, according to three former McKinsey employees who requested anonymity to discuss confidential business matters.
The authors said that McKinseyâ€™s failure to address its clientsâ€™ emissions â€œposes serious risk to our reputation, our client relationships, and our ability to â€˜build a great firm that attracts, develops, excites, and retains exceptional people.â€™â€ But the moment also presented McKinsey with a â€œsignificant opportunity,â€ they wrote.
They proposed that McKinsey not only redress its own emissions, but also publicly disclose the amount of carbon pollution that its clients produced in aggregate and commit to helping them do their part to limit the global temperature increase to 1.5 degrees Celsius. Beyond that threshold, scientists say, the dangers of global warming would skyrocket.
McKinsey has â€œa moral obligation to take action to influence our clientsâ€™ emissions and to show the leadership our stakeholders expect of us,â€ the authors said.
On April 5, the firmâ€™s managing partner, Kevin Sneader, as well as his designated successor, Bob Sternfels, responded to the open letter. In a memo, they said that they â€œshare your view that the climate issue is the defining issue for our planet and all generationsâ€ and that they would discuss the firmâ€™s direction on climate change on Earth Day, April 22, in a companywide â€œask me anythingâ€ event.
Before that event, Mr. Sneader announced that McKinsey would help its clients reduce their emissions to meet the 1.5-degree goal. â€œOur aim is to be the largest private-sector catalyst for decarbonization,â€ he said.
Mr. Sneader and Mr. Sternfels, who succeeded him in July, made it clear on the Earth Day call that McKinsey would continue to serve the big polluters. Their message: McKinsey had to continue working with them to stay relevant, according to a summary obtained by The Times.
The McKinsey spokesman said the firm had already addressed the issues the letter raised when it was sent, and had created a new platform to help clients cut their emissions. But the steps McKinsey took didnâ€™t satisfy everyone.
In late July, Rizwan Naveed, one of the authors of the letter whose work at McKinsey focused on energy and decarbonization, sent an email to hundreds of colleagues. He was leaving McKinsey â€” one of several such departures in recent months, former employees said.
â€œHaving looked at the actual hours billed to the worldâ€™s largest polluters, it is very hard to argue today that McKinsey is the â€˜greatest private sector catalyst for decarbonization,â€™â€ he wrote. â€œIt may well be the exact opposite.â€