2023-11-09 16:20:04
McKinsey, the world’s largest consulting firm, is using its influence in the preparations for COP28 to defend the interests of its oil and gas clients, undermining efforts to exit fossil fuels, according to several sources and documents consulted by AFP.
Behind the scenes, the American McKinsey & Company provided the UAE organizers of the 28th United Nations climate conference with scenarios on the future of the global energy sector which contradict the climate objectives that the firm displays publicly, reveals the AFP investigation Thursday November 9.
Investments in oil and gas
And “story of the energy transition”written by the firm and consulted by AFP, predicts a reduction in oil consumption of only 50% by 2050, and mentions trillions of dollars of annual investments in oil and gas. here there.
McKinsey, whose major hydrocarbon clients range from the American ExxonMobil to the Saudi national company Aramco, is one of the many firms which advise free of charge the United Arab Emirates, the oil and gas power host of the crucial negotiations of nearly 200 countries at COP28 , which will begin on November 30 in Dubai. These will be chaired by Sultan Al Jaber, also head of the UAE oil and gas company Adnoc.
The year 2023 is likely to be the hottest ever measured and greenhouse gas emissions continue to increase at unprecedented levels, despite the alarm sounded by scientists and the increase in climate disasters. Meanwhile, McKinsey “openly and shamelessly calls for lowering ambitions on the elimination of oil within the COP28 presidency itself”said a source who attended confidential meetings with the summit hosts.
“Sustainable development is an essential priority” from McKinsey, responded a spokesperson for the group who said it was resolutely committed to supporting the decarbonization of the companies it advises. “We are proud to support COP28 by providing strategic information and analysis, as well as sectoral and technical expertise”he added.
Conflict of interest
Some of McKinsey’s competitors also operating in Dubai are working to find real climate solutions, report three participants in high-level COP28 preparatory meetings, who asked to remain anonymous. “But it was very clear from the start that McKinsey had a conflict of interest”said one of these sources who took part in the confidential discussions of the COP28 presidency.
“They were giving advice at the highest level that was not in the interest of the COP President in his capacity as responsible for a multilateral climate agreement, but in the interest of the COP President in his capacity of CEO of one of the largest oil and gas companies in the region »she added.
Confidential documents consulted by AFP confirm this. The transition plan prepared by McKinsey for the presidency of COP28 “feels like it was written by the oil industry, for the oil industry”estimates financial markets expert Kingsmill Bond.
“This is clearly not a credible trajectory towards net zero emissions”, analyzes this expert from the Rocky Mountain Institute think tank. A spokesperson for the COP28 presidency confirms that “McKinsey supports COP28 by providing expertise and analysis free of charge”. But to say that the cabinet presented scenarios incompatible with global climate goals “is simply incorrect”he adds.
Double the oil and gas
Structured like a law firm, McKinsey employs around 35,000 people worldwide, including 2,500 partners, for revenues of around $15 billion in 2022.
Through the Paris Agreement in 2015, nations committed to limiting global warming to well below 2°C and if possible 1.5°C. According to IPCC climate experts, the world economy must be carbon neutral by 2050 to hope to remain below this more ambitious threshold. “On average, 40 to 50 million barrels per day of oil should still be used in 2050”compared to around 100 million today, says the McKinsey scenario.
These volumes would constitute double the maximum quantities recommended by the net zero emissions roadmap of the International Energy Agency (IEA), underlines Jim Williams, specialist in decarbonization strategies at the University of San Francisco.
Exceeding IEA recommendations
According to the IEA, negative emissions technologies, by capturing CO2 from the atmosphere, should be multiplied by 100,000 by 2050 to achieve the goal of a carbon-neutral world, a colossal and guarantee of success.
But McKinsey’s scenario would probably require at least double that, according to experts. This plan “implies reaching a much larger scale of technology deployment” CO2 capture, “or a much faster exit from coal and gas”according to Mike Coffin, a former geologist at BP turned expert at the think tank Carbon Tracker.
McKinsey’s plan for COP28 calls for $2.7 trillion a year in new investments in oil and gas through mid-century, far more than the IEA recommends.
“Even in the current situation and in the absence of new climate policies, we expect global oil demand to peak during this decade”Fatih Birol, executive director of the IEA, recently said.
But many majors – encouraged by the high profits earned thanks to the rise in prices due to the war in Ukraine – have gone back on their commitments to transition to renewables… or even redoubled their investments in hydrocarbons.
“We will continue to do what we do best”replied Darren Woods, CEO of ExxonMobil, during an interview published in September on the McKinsey website, in which he explains why the company has stayed away from wind and solar power.
Internal rebellion
In 2021, McKinsey’s work with the fossil fuel industry has sparked a rebellion within its own ranks. More than 1,100 employees signed an internal letter, seen by AFP, warning of the existence of a “significant risk for McKinsey and for our values to continue on the current path”.
“Our inaction (or perhaps our support) regarding customer emissions poses a serious risk to our reputation” et “for relations with our customers”they write. “For several years we have been telling the world to be bold and align with a 1.5°C emissions trajectory; It’s high time we applied our own advice”they continue.
According to the McKinsey spokesperson, the firm is committed to helping clients achieve net zero emissions by 2050 and that includes working with “high emission sectors”. “Disengaging from these sectors would do nothing to solve the climate problem”ajoute McKinsey.
McKinsey’s help with the transition
Many companies call on consulting firms to prepare for climate risks and the opportunities of the ecological transition.. “We need help from consulting firms because we need to take action, and very quickly”says Bob Ward, of Grantham Research Institute on Climate Change to the London School of Economics.
“But it is essential that they actively work towards the transition rather than trying to slow it down due to the interests of existing actors, such as the fossil fuel industry”he adds.
The big players in the market – McKinsey, Boston Consulting Group and Bain – hire top graduates with six-figure salaries to strategize for their clients.
A 2022 McKinsey document promoting private carbon markets, seen by AFP, identifies several of its major clients, including oil companies Chevron and BP, electrician Drax and mining giant Rio Tinto.
The world’s largest oil company, Aramco, declined to comment on its relationship with McKinsey.
McKinsey says it has helped healthcare clients expand their solar farms, wind turbine manufacturers become more competitive and at least one developing country produce more renewable electricity, but does not name these clients. .
“If we want to ensure a controlled decline in fossil fuel production, we can’t do it if those who help (companies) make money from it continue to sit at the table.”said Pascoe Sabido, of the think tank Corporate Europe Observatory.
Hydrocarbon consultancy
There is a « angle mort » legal on the role of consulting firms in the climate crisis, he adds: “lobbying and covert arrangements (…) are much more dangerous there because there is much less accountability”.
McKinsey’s policies have led it to make headlines several times. Over the past two years, the firm, which denies any wrongdoing, has been forced to pay hundreds of millions of dollars to settle lawsuits, after being accused of fueling the opioid crisis through its advice to pharmaceutical companies.
Numerous investigations have shown that the hydrocarbon giants were aware of the impacts of global warming as early as the 1970s, thanks to the work of their own scientists, while attempting to undermine confidence in the work of climatologists who reached the same conclusions.
McKinsey est “capable of doing a good job helping its customers navigate the energy transition, but that work pales next to what it is doing for oil and gas”estimates a former consultant of the firm, who requested anonymity because he is bound by a non-disclosure agreement.
“They serve the biggest polluters in the world”he asserts. “The best way to understand this company is to consider it as the most powerful oil and gas consulting firm on the planet, which presents itself as a player in sustainable development while advising its polluting clients on all possibilities to preserve the status quo”.
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