– Many environmental issues are so big that no single institution can tackle them.
Take the leakage of plastics into the world's oceans. By 2025, a staggering 250 million metric tons of plastic are projected to be in the ocean unless action is taken. That is one ton of plastic for every three tons of fish. Plastic not only harms wildlife and habitats through entanglement with larger pieces of refuse, it also fragments into particles that find their way into living organisms in ways we are only beginning to understand. The plastics found in the ocean come from thousands of sources across multiple countries, so no international organization, government, or company has the authority, expertise, or resources to address this environmental threat on its own.
But Martin Stuchtey thinks that the right combination of stakeholders can tackle the issue. Based in Munich, Martin leads McKinsey's Center for Business and Environment, which aims to tackle global environmental issues by working with coalitions to develop a shared understanding across the private, public, and nonprofit sectors. Coalition partners in recent projects include the Ellen MacArthur Foundation, Ocean Conservancy, Rocky Mountain Institute, and Stanford University. Significantly reducing the leakage of plastic into the ocean from land-based sources is the center's next challenge.
A geologist and economist by training, Martin leads McKinsey's work on green growth. A particular focus: water management and closed-loop systems. His work analyzing the true costs of how we use natural resources has already made waves. At last year's World Ocean Summit he laid out analysis showing that government subsidies for deep-sea fishing make no sense from an economic perspective because they lead to further depletion of fishing stocks. He has also helped drive work on the economics of the "circular economy"—an economic system run, as he describes it, "like a forest; it grows while other natural systems thrive."
The Center for Business and Environment selects projects based on three main criteria. First, does the issue relate to one of its core themes: the circular economy, the future of mobility, or transitioning energy systems/ecosystems? Second, can the center help bring together a critical mass of stakeholders to take action? Third, can McKinsey use analysis to frame the issues in a way that makes a big difference and helps to unlock a solution? Martin admits that one of his biggest challenges is helping coalition partners and other stakeholders understand the role of the center: "We are not a nongovernmental organization, but we're also not acting as consultants in the traditional sense. Our aim is to be an incubator of long-term, systemic change."
Says Martin: "Plastic is a huge, interesting topic. It is the ultimate single-use material. Not only does it clog our ecosystems in very graphic ways but losing a valuable material like plastic after one use is also a huge loss to the economy. Bringing it back into use is at the heart of the solution."
In practice, this means designing economically viable ways to significantly reduce land-based municipal waste and prevent used plastics from entering the ocean. Creating the right economic conditions will be key so that waste collection and aggregation contributes to local economic growth and job creation.
The center aims to lay out its analysis in a way that stakeholders—plastic producers, consumer-goods companies, municipalities, or waste-picker communities—can use as an objective basis for discussion. Then comes the challenge of working with a community of interested parties to develop and implement a plan. "The real art is contributing McKinsey analysis and problem solving while also tapping the expertise of other organizations," Martin explains.