McKinsey launches new Sustainable Materials Hub to accelerate the net-zero transition across value chains

Metals, cement, batteries, glass, plastics, and more account for nearly 20 percent of global greenhouse gas emissions. To arrest the rise in global temperatures, the materials sector must radically decarbonize.

Meeting this moment requires the value chain to cooperate as never before and solve a complex chicken-egg problem. For example, if upstream producers, such as steel suppliers, don’t decarbonize, then downstream producers, such as car manufacturers, won’t have the low-carbon materials they need to reach their sustainability targets. At the same time, however, upstream producers can’t decarbonize without clear downstream demand for sustainable materials.

McKinsey’s Sustainable Materials Hub aims to help solve this problem and accelerate the materials transition. The new initiative offers an approach that combines upstream and downstream perspectives to find joint solutions for materials sustainability—and create value while doing so. In fact, we estimate that nearly $9 to 12 trillion will reside in new sustainable value pools by 2030, including about $300 billion in new green materials and the products they enable.

“This is a system-level opportunity,” says partner Anna Moore. “Making the most of it requires the value chain to work together; supply and demand need to come together. We’ve launched the Sustainable Materials Hub in order to help our clients develop integrated perspectives, commitments, and concrete action plans.”

The new hub combines decades of functional expertise in sustainability and operations with deep perspectives across commodities and industries to help reduce materials emissions from production through sourcing to use. “We house experts at every step of the value chain,” says partner Eric Hannon, “from miners, smelters, processers, and distributors, to end purchasers, equipment manufacturers, and industrial players.” The hub also offers in-depth insights on the supply, demand, and low-carbon premiums across a wide range of commodities.

“Capabilities that until today existed in multiple pockets of the firm are now coming together to build holistic, uniquely-effective solutions for decarbonization,” says senior partner Michel Van Hoey. “That’s the power of the hub.”

The Sustainable Materials Hub will focus on several areas: Creating transparency on materials related to GHG emissions; Defining realistic materials-related decarbonization aspirations and developing practical decarbonization plans to achieve these; Commercializing sustainable materials; and developing future-proof sourcing strategies for low carbon offerings.

These areas will give our clients the opportunity to address decarbonization opportunities through an ecosystem approach, helping put leaders in the best possible position to pursue emissions reductions boldly, and ensure they thrive in the green transformation.

“Most players will have to find ways to work across the value chain,” associate partner Anna-Christina Fredershausen says. “They can’t do this in a silo and get where they want to go. That’s why in the new hub we’ve organized ourselves the way we have.”

To cut across verticals and break down silos, the hub will leverage McKinsey’s distinctive tools, such as Catalyst Zero, to help clients take a fact-based perspective on decarbonization.

Capabilities that until today existed in multiple pockets of the firm are now coming together to build holistic, uniquely-effective solutions for decarbonization. That’s the power of the hub.

McKinsey senior partner Michel Van Hoey

The hub will also help clients reskill and upskill the people who touch these verticals, ensuring the impact we deliver, and the decarbonization work we catalyze, can endure. Associate partner Yvonne Huemer explains: “If sourcing teams buy products for manufacturing that are high carbon or commercial teams sell solutions but don’t capture the value of lower-carbon offerings, you’re not advancing,” she says. “Every function in producer- and purchaser-organizations needs to be upskilled, and we can help.”

Reaching net-zero by 2050 is the imperative of our time. The Sustainable Materials Hub is our latest move to help accelerate progress toward it. “Whenever we go to a materials player and do an end-to-end assessment, we always find levers that reduce carbon and create value,” says associate partner Marcelo Azevedo, “When clients want to move, we can tell them exactly where to go and how to get there.”

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