Companies in every sector are at the center of efforts to reduce global emissions. Yet as they look to reach bold net-zero commitments, they still must meet growth targets. To succeed in these twin efforts, they will need to deploy new technologies that can increase efficiency and reduce waste across the value chain while transitioning away from carbon emissions.
These are substantial shifts. Organizational change management, business building optimization, and collaboration strategies will be key to a successful transition. Below, McKinsey partners discuss technology, growth, sustainability—and the future of business.
Technology is the lifeblood of many of the solutions that will enable organizations to achieve their sustainability goals.
Kate: We have so much of the clean technology that we need that will help us reach net-zero—it’s not an innovation problem. What we have is a scalability problem. What's it going to take to do green steel at a level that is scalable for companies? That is the kind of challenge that we love at McKinsey.
We work with clients on building the business model that's going to make that technology wildly successful in the long term. This way, it becomes less about tech for tech's sake, and much more about bringing clean tech to a level where it really can solve some of these sustainability challenges.
There’s also the green IT side of things. We’re using more and more compute power—and, of course, consuming more energy to do that. So how do companies rethink their approach to technology so green is at the heart? It may mean making very different decisions. It will look very different to choose technology for employee use from the perspective of reducing emissions as much as possible, as opposed to purely thinking about keeping costs down.
I see and work with organizations unpacking this and taking new approaches to the classical IT team than they did in the past. It’s a new way of working but it is the way of the future.
To make a big difference in climate action, we have to address real estate—it’s 40 percent of carbon emissions.
Aditya: Buildings contribute such a large share of global emissions. The good news is that we can actually address a significant amount of those emissions with the technologies and economics we have today. Unlike many other sectors, we don’t need to wait for a research lab or other stakeholders to act. This creates an obligation and opportunity for building owners and tenants to start immediately and move quickly.
But the challenge is there are so many buildings, they’re all different, and they lie at the intersection of a complex set of supply chains and stakeholders. How can we figure out the current state of all of these buildings without having to send an engineer into each one? How can we coordinate landlords, tenants, lenders, utilities, and the other players needed to make a building net zero? How can we rapidly scale the supply chains we need, in areas like heat pumps, green steel, and smart building systems? And how can we create millions of skilled jobs to get this all done?
These are the types of challenges we’re excited to be part of solving. We’re creating industry-changing artificial intelligence capabilities to dramatically accelerate building decarbonization. We’re mobilizing industries and working with governments to upskill workforces. It’s exciting and makes us optimistic about our ability to address the decarbonization challenge.
Growth by itself is not enough anymore. You have to drive down your footprint as you’re growing.
Dymfke: If you want to truly drive organic growth outside of M&A, you need to think about: How do I create a mechanism that funds itself? And a mechanism that disproportionately depletes natural resources or has a negative impact on society just doesn't work in the long run.
You do need to work on actual revenue growth, but thinking about sustainability unlocks opportunity in terms of new business building. If you’re a beverage company, reducing your carbon footprint per liter of beverage produced, improving your impact on water and therefore the watershed for the communities around you—you need to use new technologies to do this. Developing and implementing these creates new opportunities for other businesses streams to grow. This is important because sustainability without affordability and growth is also not an option.
In today's inflationary environment, you need to take a good hard look at the materials you’re using to make your product—avoiding excess plastics—and at efficiency to make sure that the consumer gets what they need. Not only do these improve the ultimate experience for the consumer, but they also drives down your cost and your footprint.
Sustainability is not only imperative for our time and for future-proof growth, it’s what needs to define a company’s identity in today’s market.
Kevin: Ultimately sustainability is about using resources in a more efficient way throughout the value chain of a company. Technology allows us to measure the energy footprint, the operational waste in every step of the value chain. It also offers automation and tools to tighten the chain, reduce manual work and physical waste. Technology enables a systematic effort that changes a company.
But implementing such fundamental changes across a company has to be done carefully. Because if you don't have strong organizational change management, even if the concepts and tools are in place, a company won’t succeed. All this great technology that can reduce waste and increase energy efficiency won’t meet its promise.
This is where McKinsey thrives. We measure progress, foster leadership development and culture change, innovate through our technology practice, increase efficiency through our operational practice—and bring it together in our change management and transformation methodology. With all of these together, change comes naturally.