McKinsey & Company pushes fossil fuel interests as advisor to UN climate talks, whistleblowers say

The world’s top management consultancy McKinsey & Company is using its position as a key advisor to the UN’s COP28 climate talks to push the interests of its big oil and gas clients, undermining efforts to end the use of the fossil fuels driving global warming, according to multiple sources and leaked documents.

Issued on: 07/11/2023 - 17:45Modified: 07/11/2023 - 17:43 - read 7 min

Behind closed doors, the US-based firm has proposed future energy scenarios to the agenda setters of the summit that are at odds with the climate goals it publicly espouses, an AFP investigation has found.

An “energy transition narrative” drafted by the firm and obtained by AFP only reduces oil use by 50 percent by 2050, and calls for trillions in new oil and gas investment per year from now until then.

McKinsey -- whose big oil clients range from America’s ExxonMobil to Saudi Arabia’s state-run Aramco – is one of several consultancies giving free advice to the United Arab Emirates as it hosts the critical negotiations, which start on November 30.

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‘Written by oil industry for oil industry’

Some of McKinsey’s rival consultancies operating in Dubai have worked in the spirit of finding genuine climate solutions, according to three sources who have taken part in high-level preparatory meetings, who asked not to be named as the proceedings were confidential.

“But it was very clear from an early stage that McKinsey had a conflict of interest,” said a source who took part in COP28 presidency discussions.

“They would give advice at the highest levels that was not in the best interest of the COP president as the leader of a multilateral climate agreement, but in the best interest of the COP president as the CEO of one of the region’s biggest oil and gas companies.”

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The 2015 Paris Agreement calls on nations to cap warming at 1.5 degrees Celsius, and the UN’s scientific advisory body has said the world economy must be carbon-neutral by 2050 to stay below that.

But analysts said the pathway McKinsey suggested to Jaber for the COP talks would allow fossil fuel firms to continue to pump way too much oil and gas to hit “net zero”.

“On average, 40-50 MMb/d (millions of barrels per day) of oil is still expected to be utilized in 2050,” compared to about 100 MMb/d today, McKinsey’s narrative said.

That is twice the amount allowed in the International Energy Agency (IEA) net zero roadmap, said Jim Williams of the University of San Francisco, a top modeller of decarbonisation trajectories.

The IEA says CO2-removal technologies must scale up 100,000-fold by 2050 to stay on track for a net zero world – a mind-boggling challenge with no guarantee of success.

But the McKinsey scenario would likely require at least double that, experts said.

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Internal revolt

In 2021, McKinsey’s work for fossil fuel clients sparked a rebellion within its own ranks.

More than 1,100 of the firm’s employees signed an internal letter seen by AFP warning that “there is significant risk to McKinsey and our values from pursuing the current course.”

“Our inaction on (or perhaps assistance with) client emissions poses serious risk to our reputation” and “our client relationships”, they wrote.

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A 2022 McKinsey document promoting private carbon markets seen by AFP identified several of its important clients, including oil firms Chevron and BP, power firm Drax, and mining giant Rio Tinto.

“If we want to ensure a managed decline of fossil fuel production, we can’t do so if those helping (companies) make money from fossil fuel production continue to have a seat around the table,” Pascoe Sabido, a researcher at the Corporate Europe Observatory think tank, told AFP.

He said there was a regulatory “blind spot” over consultancies’ role in handling the climate crisis.

“The lobbying and the fixing that happens under the radar… is much more dangerous because there’s much less accountability.”

(…) Multiple investigations have shown that oil and gas giants were aware of the likely trajectory and impacts of global warming as early as the 1970s based on research by their own scientists, while at the same time sowing doubt on climate science that had come to the same conclusion.

McKinsey is “capable of doing good work helping clients navigate the energy transition, but that work pales in comparison to what it is doing for oil and gas,” said one former McKinsey consultant, who asked not to be named due to a non-disclosure agreement.

“They serve the world’s largest polluters,” he argued. “The firm is best understood as possibly the most powerful oil and gas consulting firm on the planet posturing as a sustainability firm, advising polluting clients on any opportunity to preserve the status quo.”