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Sustainable Investing

We support the world’s leading investors in developing sustainable investment strategies that couple competitive financial returns with wider environmental and social benefits.

Sustainable investing has grown from a niche to a mainstream market segment as evidence accumulates about the benefits of investing with environmental, social, and governance (ESG) factors in mind. Some of the world’s biggest institutional investors are setting the pace in adopting sustainable investment strategies. Following their lead, most large funds are looking to apply sustainable practices in their investment decisions, processes, and operations.

We help investors to finance projects, businesses, and infrastructure in a way that supports sustainability goals, drawing on McKinsey’s unique ability to combine investment expertise with deep insight into environmental and social issues. We advise clients on crafting investment strategies to meet national or corporate carbon-abatement targets, identifying attractive investment opportunities and developing appropriate financing mechanisms, and analyzing ESG risk exposure across a portfolio of investments. To support our client work, we undertake research and develop cutting-edge tools to measure and manage sustainability performance.

Examples of our work

Over the past 3 years, we have supported clients with more than 100 projects related to sustainable investing, including:

Advising a government pension fund on a sustainable investment strategy

We helped benchmark the fund’s performance against peers and integrate ESG factors into the investment mandate, strategy, mechanisms, organization, performance management, and public reporting.

Helping a North American institutional investor with a climate-conscious strategy

We analyzed industry best practices, drew up a long list of initiatives, identified three long-term opportunities to consider, and outlined next steps to prepare for a public announcement.

Identifying opportunities related to climate change for a private-equity fund

We supported a Scandinavian fund in investigating global sectors, identifying relevant trends, prioritizing investment themes, selecting subsectors including US residential solar, and developing a hit list of investment targets.

Featured Capabilities

To meet the need for robust tools and methods in the sustainable-investment market, McKinsey has developed proprietary solutions for use in client projects, including:

Global Investor ESG Integration Benchmarking

Benchmarking across leading institutional investors and private-equity funds to identify levers and options for integrating ESG factors into investment strategy

Decarbonization Pathway Optimizer

A digital tool to help countries or regions design decarbonized target systems for industry sectors and quantify associated capital-expenditure and operating-expenditure investment needs

Sustainability Assessment Survey

An online survey for measuring the effectiveness of sustainability practices against leaders and industry peers and identifying opportunities for improvement

Energy Insights

A source of analytics, market insights, and performance benchmarking to help businesses and investors manage uncertainty and make effective decisions

Featured Insights

Article - McKinsey Quarterly

Five ways that ESG creates value

– Getting your environmental, social, and governance (ESG) proposition right links to higher value creation. Here’s why.

More than values: The value-based sustainability reporting that investors want

– Nonfinancial reports helped stimulate the growth of sustainable investing. Now investors are questioning current reporting practices—and calling for changes that executives and board members must understand.

Fueling the energy transition: Opportunities for financial institutions

– As renewable-energy sources proliferate, power grids become smarter, and industries electrify, strong financial partners will play a critical role in providing funding for a capital-intensive sector.