Back to ESG & Net-Zero Strategy

Environmental, Social & Governance

Environmental, social, and governance (ESG) strategy is creating new challenges and opportunities for leaders to create sustainable, inclusive growth. Successful companies are implementing ESG strategies that increase financial, societal, and environmental impact as well as ensure long-term competitiveness. Achieving bold ambitions requires understanding current state performance and sector trends, managing diverse stakeholder interests, valuing risks and opportunities, and setting distinctive and measurable goals that build capabilities and broaden impact.

McKinsey brings a unique approach to ESG focused on value creation that involves benchmarking, strategy development, initiative design, program execution, investor and external communications, and reporting. Our capabilities are bolstered by unique, data-driven, and proprietary solutions supporting clients throughout each ESG journey. Our approach combines expertise of what drives values and impact within sectors, and our domain and social expertise stretches across ESG dimensions, such as sustainability, net-zero, culture and talent, diversity, equity, and inclusion, economic development, public health, education, and future of work, among many others.

What we do

Identifying value-creation opportunities

We diagnose current ESG positioning and evaluate performance by leveraging our proprietary ESG benchmarking tools, business value-at-stake (downside and upside), and rapid materiality assessment of ESG issues across stakeholders.

Differentiating strategies

We help create an integrated ESG strategy by setting aspirations and designing specific ESG initiatives, including business case and implementation considerations. The strategy encompasses learnings from peer benchmarking and best-in-class examples, as well as gathering input from interactive workshops.

Building execution capabilities

We support capability building for all employees, executives, and the board; establish an operating model to deliver on ESG goals, which includes incentives and talent needed, and build infrastructure for tracking and reporting progress.

Designing engagement strategies

We develop communications strategies internally and externally, support partnerships across external reporting, including investors, ESG standards, and ratings agencies.

45+

tools and assets across sustainability and ESG topics

700+

experts and practitioners globally dedicated to ESG across sectors

200+

clients have worked with us repeatedly on three or more ESG projects in the last three years

Examples of our work

Driving ESG strategy and transformation to launch operational and investment initiatives

We delivered an ESG transformation for a major European bank to enable ESG into core business and operations, involving senior leadership and entire organization. The core business approach included new ESG-focused products, a process for risk management, credit governance, and ESG screening for investments. Operational initiatives addressed employee well-being, procurement efforts, and philanthropy. The impact included over €150 billion invested in ESG funds—which was 60 percent of its total assets under management—€90 billion in energy-transition loans, and €25 billion in social loans.

Working with organizations to assess ESG performance, identify value creation opportunities, and build organizational capabilities

We partnered with a large Southeast Asian conglomerate facing pressure from investors, employees, and customers to develop an ESG strategy and roadmap. We evaluated current performance on over 25 ESG metrics at enterprise and business-unit levels, completed rapid materiality assessments with key stakeholders to identify priority ESG themes, and quantified value-at-stake for top ESG issues. This revealed an EBITDA upside potential of up to 33 percent and less than 28 percent of an EBITDA downside risk. We also conducted over 20 capability building sessions, including ESG masterclasses for executives and manager-level ESG upskilling.

Identifying new business building opportunities, designing targets for ESG, and developing roadmaps for execution

We supported a materials producer in North America in its ambitious end-to-end strategic shift toward ESG by partnering with the CEO and executive team to build an integrated ESG strategy. We benchmarked current performance, identified new business opportunities in recycling, and assessed decarbonization opportunities. The analysis enabled a detailed implementation roadmap for more than $1 billion in new business around circular economy and entry plan, 20-40 percent additional green-electricity sourcing potential, and 10 to 15 percent Scope 1 carbon-emissions reduction by 2030.

Featured Experts

Vaibhav Dua
Partner, Kuala Lumpur
Leads McKinsey Sustainability’s insights team in Asia and coleads the firm’s work in tech-enabled procurement; advises and supports clients on sustainability, growth, and transformation journeys
Elizabeth Foote
Partner, London
Advises energy, materials, and public- and social-sector clients on environmental, social, and governance strategy, future of work, and organizational topics
Naveen Unni
Partner, Chennai
Passionate about sustainably transforming organisations and transforming sustainability in organisations
Rory Clune
Partner, Boston
Brings broad experience in strategic and operational topics to companies across the energy value chain, along with deep expertise in decarbonizing energy systems
Emma Gibbs
Partner, London
Leader of the Strategy & Corporate Finance Practice in the United Kingdom; helps public- and private-sector clients set sustainable strategies and modernize organizations
Nomfanelo Magwentshu
Partner, Johannesburg
Serves organizations across the public sector with a focus on economic development, health, and education, as well as private sector companies in telecommunications, services, transportation and logistics, and mining
Anna Moore
Partner, London
Advises on sustainability and strategy in basic materials and the built environment
Robin Nuttall
Partner, London
Robin is a global leader in McKinsey’s ESG and Regulatory service line, and serves clients on these topics across a range of sector
Giulia Siccardo
Partner, Bay Area
Builds innovative strategies and operating models for companies to achieve sustainable, inclusive growth
Lucy Pérez
Senior Partner, Boston
Advises pharmaceutical, biotechnology, medical-product companies, and healthcare providers in addressing strategic, organizational, and operational challenges
Marco Piccitto
McKinsey Global Institute Director and Senior Partner, Milan
Leads research and advises leading European financial and industrial institutions on a broad range of risk-management, business strategy, and transformation issues
Werner Rehm
Partner, New Jersey
Works at the intersection of strategy and finance with high tech, industrial, and pharmaceutical clients to identify and prioritize corporate strategies for restructuring, performance improvement, and growth

Featured insights

Article - McKinsey Quarterly

How to make ESG real

– While ESG is likely to evolve both in substance and name in the coming years, its underlying impulse is here to stay. Here’s... how companies can take a more systematic and rewarding approach to ESG.
Article - McKinsey Quarterly

Does ESG really matter—and why?

– Although valid questions have been raised about ESG, the need for companies to understand and address their externalities is likely... to become essential to maintaining their social license.
Podcast

Solving the net-zero equation in the United States

– Achieving net-zero carbon emissions will require investment and action on a massive scale. How can the United States meet the... challenge of this moment?
Article - McKinsey Quarterly

Playing offense to create value in the net-zero transition

– Decarbonization will reshape the economy, opening new markets and imperiling others. Now is the moment for companies to spot green... growth opportunities and move boldly to take advantage.
Podcast

Emphasizing the S in ESG

– How PayPal has made societal impact and purpose the guiding lights of its strategy.
Article - McKinsey Quarterly

Our future lives and livelihoods: Sustainable and inclusive and growing

– Growth for all, growth for good. Here, we offer a proposal for business, government, and society leaders.
Article

Women in the Workplace 2022

– Women leaders are switching jobs at the highest rates we’ve ever seen, and ambitious young women are prepared to do the... same. To make meaningful and sustainable progress toward gender equality, companies need to go beyond table stakes. That’s according to the latest Women in the Workplace report from McKinsey, in partnership with LeanIn.Org.
Article

Buying into a more sustainable value chain

– Two-thirds of the average company’s environment, social, and governance footprint lies with suppliers. Procurement leaders... who take bold action can make a decisive difference in sustainability.
Article - McKinsey Quarterly

‘Great Attrition’ or ‘Great Attraction’? The choice is yours

– A record number of employees are quitting or thinking about doing so. Organizations that take the time to learn why—and act thoughtfully—will... have an edge in attracting and retaining talent.
Article

Organizing for sustainability success: Where, and how, leaders can start

– As sustainability becomes more of a strategic and operational imperative, executives must lead the way to set up a sustainability... organization that’s right for their companies.
Article

Help your employees find purpose—or watch them leave

– Employees expect their jobs to bring a significant sense of purpose to their lives. Employers need to help meet this need, or... be prepared to lose talent to companies that will.
Article - McKinsey Quarterly

Purpose, not platitudes: A personal challenge for top executives

– To harness the power of corporate purpose, CEOs and other senior executives must pressure-test that purpose with their teams,... employees—and themselves.
Article

The board’s role in embedding corporate purpose: Five actions directors can take today

– A large spotlight is shining on corporate actions these days, and all stakeholders have growing expectations. A board’s... involvement in defining purpose helps meet those expectations.
Article - McKinsey Quarterly

More than a mission statement: How the 5Ps embed purpose to deliver value

– Your company’s purpose strengthens resilience and creates value—if it’s genuine. A new framework highlights... a detailed approach to embedding purpose throughout your organization.
Article

Investors remind business leaders: Governance matters

– Activists continue to poke holes in corporate performance and returns, but they are having their greatest success with governance... structures. Here’s how to think about their moves.
Article - Milken Institute review

It's time to build 21st century companies: Learning to thrive in a radically different world

– The great forces of technology and globalization continue to open new markets and forge the potential for new business models,... while also fueling new competition and creating unanticipated complications that leading firms will need to navigate, write James Manyika and Monique Tuin in Milken Institute review.
Survey

The ESG premium: New perspectives on value and performance

– In a new survey, executives and investment professionals largely agree that environmental, social, and governance programs create... short- and long-term value—though perceptions of how have changed over the past decade.
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.
Article

From ‘why’ to ‘why not’: Sustainable investing as the new normal

– More institutional investors recognize environmental, social, and governance factors as drivers of value. The key to investing... effectively is to integrate these factors across the investment process.