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Net-Zero Financial Institutions

Helping banks, asset managers, and insurers decarbonize their portfolios

Financial institutions are increasingly looking for ways to reduce their climate-risk exposure, take their operations to net-zero carbon emissions, and develop new sustainability-related products. This requires new analytical capabilities to assess the carbon emissions of lending portfolios and incorporate climate change into the quantification of risk.

We work closely with asset managers, banks, insurers, and other financial institutions to build portfolios that look to the future. To help strengthen our capabilities, McKinsey recently acquired Vivid Economics, a recognized leader in climate and sustainability economics with an established track record of helping clients accelerate their path to net zero.

What we do

Climate risk management

Our experts help clients map out a strategy to manage the financial risks generated by climate change. We advise clients on ways to meet the regulatory requirements within credit processes, sectorial models, stress testing and scenario analysis, revised ERM frameworks, and risk appetite.

Climate and ESG strategy

We work with clients to help them meet the expectations of investors and customers. We assist with improving ESG ratings via new credit policies, diversity initiatives, decarbonization targets, operational enhancements, and improving communication with capital markets.

Sustainability-oriented products and services

We help innovate and scale products and services to meet the sustainability needs of clients such as green bonds, sustainability-linked products, and the creation of an ESG advisory desk.

Examples of our work

Asia-Pacific

Our team helped a major Asia-Pacific bank define its net-zero ambition, translating it into sector-specific glidepaths, defining the target state for climate management practices, reviewing the potential of specific green opportunities, and setting up a change program to rally the entire bank around the initiative.

North America

We worked with a leading US bank to benchmark its sustainability position against peers, develop a risk framework and operating model, and build a top-down heatmap of climate risk exposure.

Europe

We helped a top European bank set its portfolio on the path to net-zero carbon emissions by determining emission reduction glidepaths at sector level, finding growth opportunities across portfolios and geographies, translating its climate ambitions into a strategy and communications plan, establishing the necessary data and analytics capabilities, and integrating physical and transition risk models into stress tests.

New at McKinsey Blog

Blog Post

McKinsey acquires Vivid Economics and Planetrics to help clients navigate climate change

– The acquisition underscores our commitment to sustainability and helps us bring significant additional analytical capabilities, expertise, and experience to our clients.

Featured Experts

Dee Yang
Associate Partner, New York
Advises large institutions across the public, private, and social sector on managing risk, rethinking strategy, and optimizing...
Jonathan Michael
Partner, Sydney
Advises banks, insurers, and asset managers, focusing on strategy, distribution, and regulation
Daniel Mikkelsen
Senior Partner, London
Leads the risk advanced analytics work and is a leader of the operational risk, compliance, and control work in Europe, the Middle...
Brodie Boland
Partner, Washington DC
Helps leading real-estate organizations, infrastructure investors, and city governments prepare for the future, including by identifying...
Holger Harreis
Senior Partner, Düsseldorf
Helps organizations implement transformation rapidly, with groundbreaking levels of adoption and impact
Hans Helbekkmo
Partner, Bay Area
Offers deep insights into risk management with a strong focus on enterprise risk frameworks, stress testing programs, and regulatory...
Kia Javanmardian
Senior Partner, Chicago
Advises insurance companies and other financial institutions on how to use emerging technologies to transform their core business...
Cindy Levy
Senior Partner, London
Helps global financial firms on multiyear agendas related to strategy, transactions, organization, and risk governance and culture
Asheet Mehta
Senior Partner, New York
Leads the Financial Services Practice in the Americas and coleads globally, helping clients on their most complex strategic and...
Daniel Pacthod
Senior Partner, New York
As global leader of McKinsey Sustainability, Daniel supports leading organizations in sustaining transformational impact through...
Dickon Pinner
Senior Partner, Bay Area
As global leader of McKinsey Sustainability, helps transform companies’ product, service, and asset portfolios to capture the...
Hamid Samandari
Senior Partner, New York
Cofounder and senior leader of our global Risk & Resilience Practice; chair of the Firm's Knowledge Council, a body that oversees...
Daniel Stephens
Senior Partner, Washington DC
Advises senior leaders across the public and private sectors, including financial services, technology, education, and housing,...

Featured Insights

Article

Banking imperatives for managing climate risk

– More than regulatory pressure is driving banks to manage climate risk. Financing a green agenda is also a commercial imperative—but specialized skills are needed to protect balance sheets.
Report

A blueprint for scaling voluntary carbon markets to meet the climate challenge

– The trading of carbon credits can help companies—and the world—meet ambitious goals for reducing greenhouse-gas emissions. Here is what it would take to strengthen voluntary carbon markets so they can support climate action on a large scale.

Connect with McKinsey Sustainability