Launches Decarbonization Hubs for Global Energy and Materials Sectors
Global management consulting firm McKinsey & Company announced the launch of the Global Decarbonization Hub and the Sustainable Materials Hub, aimed at helping clients transform and unlock opportunities related to decarbonizing the energy and materials sectors.
The energy-focused Global Decarbonization Hub will be based in McKinsey’s office in Houston, Texas, home to 40% of all publicly traded oil and gas companies. In a statement announcing the launch, McKinsey said that it sees the city as “primed to lead the energy transition across green technologies including hydrogen; carbon capture, utilization, and storage (CCUS); circular plastics; and power management.”
McKinsey senior partner Filipe Barbosa, said:
“Texas is the nation’s largest renewable energy producer, home to half of the nation’s hydrogen pipelines, and its companies have unparalleled capabilities in building and operating complex projects. This is Houston’s moment in time on the global stage.”
McKinsey aims to invest $100 million over the next ten years driving asset decarbonization programs in Houston, scaling climate technologies, and building businesses across the energy and materials value chain.
Areas of focus for the energy hub will include revamping business models for carbon-exposed businesses, scaling the energy-transition startup community, attracting and developing new talent, as well as capability-building for executives.
Outlining the expected impact of its activities, McKinsey said that it has a goal to abate 100 million tons of emissions per year by 2050, and sees the opportunity to create half a million new jobs.
McKinsey partner Nikhil Ati, who leads the firm’s work on decarbonization in the energy, chemicals, and materials industries in North America, said:
“Decarbonization will lead to a new chapter of economic development, while also addressing a critical problem of climate change. I am excited to lead this effort in driving impact for our clients, our people, and our community.”
McKinsey’s Sustainable Materials Hub aims to solve the “chicken-egg problem” of decarbonizing the value chain, in which downstream producers need low-carbon materials to achieve their climate goals, while upstream materials suppliers find it challenging to decarbonize without clear downstream demand.
To meet this challenge, McKinsey said that it will offer an approach combining upstream and downstream perspectives to find joint sustainable materials solutions. Focus areas for the hub will include creating emissions transparency for materials, defining realistic decarbonization aspirations and plans for materials, commercializing sustainable materials, and developing future-proof sourcing strategies for low carbon offerings.
McKinsey Associate Partner Marcelo Azevedo said:
“Whenever we go to a materials player and do an end-to-end assessment, we always find levers that reduce carbon and create value,” says associate partner, “When clients want to move, we can tell them exactly where to go and how to get there.”
The company outlined a huge opportunity set for sustainable materials, estimating that $9 – $12 trillion will reside in new sustainable value pools by 2030, including $300 billion in green materials and the products they enable.
McKinsey partner Anna Moore said:
“This is a system-level opportunity. Making the most of it requires the value chain to work together; supply and demand need to come together. We’ve launched the Sustainable Materials Hub in order to help our clients develop integrated perspectives, commitments, and concrete action plans.”
The post McKinsey to Invest $100 Million in Energy Sector Decarbonization Practice appeared first on ESG Today.