Balancing the competing needs of feeding the global population, meeting growing demands for bioenergy, reducing and mitigating greenhouse gas emissions, and protecting biodiversity is a complex challenge. McKinsey serves energy producers, chemicals companies, agricultural and forestry businesses, international foundations, development organizations, regional and national governments, regulators, and others involved in responding to this challenge.
We have completed more than 150 engagements over the past four years helping clients to unlock sustainable value from the world’s natural resources through leading-edge technologies and land-use management. Our expertise is focused on three areas:
Biofuel, bioenergy, and bio-based materials
The market for energy from biomass and biofuels is expected to grow from $203 billion in 2008 to $544 billion in 2020, and accounts for a rapidly increasing share of the total market for energy. Similarly, the portfolio of commercially available bio-based materials is experiencing rapid growth. McKinsey helps clients create and implement business models for biofuels and bio-based materials, and develop the potential for generating power and heat from biomass.
Our engagements have ranged from alternative energy and go-to-market strategies for major fuel, chemical, and energy players to market entry and capex improvement strategies for small biofuels start-ups. We have also helped utilities that generate power and heat from biomass to understand the impact of new regulation on strategy, market dynamics, and the capital costs associated with different technologies.
Sustainable land use
As the demand for food, animal feed, and fuel rises and agricultural productivity growth slows, our estimates suggest that the world will need 175 to 220 million more hectares for cultivating crops by 2030, an increase of 11 to 14 percent. We help governments and forestry and agricultural businesses develop strategies to increase productivity and supply new markets while protecting natural resources and promoting sustainability.
Recent examples of our work include helping a global fertilizer company design a climate-compatible growth strategy; working with a national government to launch an international partnership to reduce greenhouse gas emissions through forestry initiatives; and helping a pulp and paper company analyze its supply chain to reduce fiber sourcing costs and increase sustainability. For one forestry company, our analysis revealed that shipping biomass from South America to Europe could be cheaper than using more local biomass sources, and that contract design (such as indexing biomass prices to the right commodities) could create huge value. We then helped the company design and execute its market-entry strategy and business plan.
Sustainable oceans and fisheries
Marine fisheries generate economic activity worth an estimated $500 billion per year, but overfishing has impoverished ocean ecosystems. McKinsey has developed a methodology that combines economic analysis with the biological expertise of leading academics in fisheries management to identify pathways to return fisheries to sustainable levels.
Examples of our work include helping fish suppliers develop turnaround strategies (including plans for procurement, processing, sales, transport logistics, and trawler operations) and modeling the economics of fisheries management for consumer packaged goods companies and non-profit organizations.