McKinsey & Company pledges to source all electricity from renewables by 2025

12 September 2018 Consulting.us

McKinsey & Company recently became the first management consultancy to join RE100, a group of companies that aim to source all of their electricity from renewable energy sources. The firm aims to source 95% of its electricity from renewables by the end of the year, and 100% by 2025.

In an environment where firms increasingly have to live their commitment to causes rather than pay lip service to them, strategy consultancy McKinsey & Company has strongly driven sustainability initiatives throughout its operation.

As a supporter of the UN Sustainable Development Goals and Paris Agreement, as well a participant in the UN Global Compact, McKinsey has been working to reduce greenhouse gas emissions, waste, and water usage throughout its offices. Some initiatives include the wide use of videoconferencing to reduce unnecessary travel (especially flights), installing recycling hubs, and locating offices in energy efficient buildings.

The prestigious consultancy has further taken the bold step of aiming for carbon neutrality by the end of this year. Since 90% of its emissions come from the extensive travel of jet-setting consultants, the firm has to focus on investing in carbon reduction projects in diverse geographies and technologies that offset their own output. There still is no practical alternative to the firm’s ‘have strategy, will travel’ business model, and solar-powered jets aren’t really on the menu.

The firm has also set aggressive long-term targets to decrease their greenhouse gas emissions, with a reduction of 60% for direct emissions and purchased energy by 2030, and 90% by 2050.McKinsey & Company pledges to source all electricity from renewables by 2025As part of its carbon neutrality goal, McKinsey recently joined the RE100 coalition of firms that have pledged to source all their electricity from renewable sources. McKinsey plans to source 95% of its electricity from renewables by the end of the year, and 100% by 2025.

“We are proud to be joining the RE100 group of companies who are demonstrating their leadership by committing to 100 per cent renewable electricity," said Kevin Sneader, global managing partner at McKinsey.

The RE100 campaign was developed by two London-based nonprofits: The Climate Group and CDP. The Climate Group works with businesses and governments to address climate change through renewable energy and greenhouse gas reduction, while the CDP supports cities and companies in the disclosure of their environmental impact.

Other organizations that recently joined the sustainable energy campaign include UK bank RBS, shared workplace company WeWork, and Sony Corporation. RE100 already includes more than 140 multinationals committed to using 100 percent renewables in their operations. Together, members currently create demand for 182TWh of renewable electricity per year – or enough to power a medium-sized country like Poland or Thailand. United, the firms send a strong signal to governments that clean energy is the way to go.

"By stepping up and joining RE100 these leading companies are saying loud and clear that 100 per cent renewables are the solution - they reduce business risk and drive down greenhouse gas emissions," commented Helen Clarkson, CEO of The Climate Group.

To reach its RE100 goals, McKinsey will purchase power through green tariffs from utilities and work with landlords where electricity is provided in offices the firm leases. Where the above is not possible, McKinsey will purchase energy attribute certificates equal to their consumption to send a demand signal and support renewable energy development.

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Business reporting increasingly focused on sustainable development goals

18 April 2019 Consulting.us

According to the prevailing scientific consensus, climate change, pollution and environmental degradation resulting from current economic models cannot be sustained without considerable effect on societies going forward. Purpose beyond profit is being expressed by businesses, while meeting global targets for sustainability is also being incorporated into wider business practices. Reporting on positive and negative business impacts remains poor, however.

The economy has, for decades, come first. The consequence of that mindset, particularly with poorly planned growth, has left future generations with large-scale problems. The scientific community has for decades warned of over-pollution and over-consumption, with many of the world’s largest businesses now grudgingly taking heed.

Climate change, biodiversity and waste are the current key issues, with the UN climate accord putting in place a maximum bound for human-induced warming. Loss of biodiversity and dealing with pollution remain major areas in which global protocols will be necessary to mitigate long-term negative impacts with little short-term gains.

While global-level, intergovernmental collective action will be necessary to transition to a sustainable economic model, the UN Sustainable Development Goal (SDG) are a key port of call for businesses seeking to meet current sustainability criteria for their activities. A new report from PwC, titled ‘Reporting with Purpose and Impact’, explores how effectively companies are meeting SDG reporting goals – which show the increasingly social and enviro-conscious public whether a company is meeting the sustainability goals in its operational footprint.

Responsible business reporting increasingly focused on SDG

One key indicator of good reporting is a clear statement of purpose for the business as a whole. Concentrating solely on shareholder profit could have a negative impact on the public perception of a company – particularly if that profit appears to come at the expense of SDG goals themselves. A statement that includes the wider positive impact of a company, as well as the ways in which it mitigates its externalities, are increasingly seen as a necessary tool to improve public perception.

As such, the report shows that companies that have a wider social purpose to their existence tend to have a better public perception and a wider licence to operate in society. The study found that 47% of companies had a clear statement of purpose that aligned with their core business, while 45% of companies failed to have a clear statement of purpose.

The study notes that though reporting has historically focused on key social and environmental metrics (such as CO2 emissions), new reporting standards look at the whole footprint of companies across their entire value and supply chains – including subsidiaries, contractors, and suppliers.

The fuller accounting explores the whole impact of their activity on society and the environment, which makes it considerably harder to hide the effect of their suppliers or subsidiaries, which could have considerable environmental impact – even though the parent company has in theory “reduced its emissions to zero.” Furthermore, positive achievements like reducing poverty or improving quality of life needs to be considered in light of the long-term sustainability of that achievement. 

In the end, analysis of FTSE 350 reporting finds that companies are not clearly reporting their impacts on the environment, are not aligning their stated purpose with their environmental outcomes, and are largely focusing only on positive aspects of their impact, rather than the less flattering whole.