On 26 August, the B20 Trade and Investment Task Force, alongside the ICDX Group and the Ministry of Trade of Indonesia, held a side event that focused on the technology and market innovation required to drive decarbonization. McKinsey expert associate partner Martin Santoso, responsible for leading sustainability work in Indonesia, led with a presentation on McKinsey’s role and influence in this area.
More than 50 countries have now embarked on decarbonization journeys; and, as the leading consulting firm in sustainability, McKinsey is shaping the global narrative in Asia and beyond. Over the last three years, Santoso noted, the company has conducted over 2,300 decarbonization projects with more than 1,200 clients, and has researched and created action plans for dealing with 70 percent of the world’s carbon emissions (Exhibit 1).
“We partner with and accompany our clients throughout their decarbonization-technology deployment journey,” said Santoso: “Defining the role of climate techs in the net-zero agenda, creating technology roadmaps, defining winning strategies, and building climate-technologies businesses.”
We partner with and accompany our clients throughout their decarbonization-technology deployment journey.
Martin Santoso, McKinsey Indonesia
McKinsey assists industries and industry associations in driving decarbonization across all sectors—from digital carbon tracking to agriculture and infrastructure. For example, McKinsey supports the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), which aims to create an at-scale and environmentally robust carbon market to help meet the goals of the Paris Agreement. The strategic consultancy Vivid Economics (a McKinsey company) has helped the World Bank to create an emissions-trading system (ETS) handbook, and promotes carbon-market development across the globe.
Santoso highlighted five strategic transformation areas where McKinsey is helping clients to achieve their net-zero ambitions:
- Net-zero and environmental, social, and governance (ESG) strategy: Developing the full potential of such strategies, and plotting roadmaps to bring them to fruition.
- Green business building: Building new green businesses—whether stand-alone start-ups or parts of incumbents.
- Decarbonization transformation: Transforming core businesses and asset bases for decarbonization.
- Sustainability in financial institutions: Pricing and mitigating climate-related risk; capturing opportunities in sustainable finance.
- Sustainability investing: Launching green funds and other vehicles to finance the energy transition.
McKinsey works across all five areas, via a number of platforms, such as the McKinsey Academy for Sustainability, which develops talent and leadership on climate change; McKinsey Sustainability Analytics & Data (via Catalyst Zero, Vivid Economics and Planetrics, Material Economics, and other McKinsey companies); and the McKinsey Platform for Climate Technologies (MPCT).
MPCT helps clients implement critical green technologies, such as hydrogen power, batteries and storage, and sustainable fuels (Exhibit 2). MPCT’s mission is to identify these vital decarbonization tools, catalyse their acceleration to break the cost curve, and enable scaling. This will be achieved, Santoso explained, through exploring the science, developing unique insights, convening a strongly cooperative ecosystem by rallying key players across sectors, and deploying diverse talent from a global group of experts.
It was clear from Santoso’s presentation how broad and far-reaching McKinsey’s influence has been, in Indonesia and globally, and across almost every sector: from oil and gas to finance, logistics and infrastructure.
Other speakers addressing the Task Force event included Carmelita Hartoto of the Indonesian Chamber of Commerce and Industry (KADIN), Eka Himawan (Xurya Daya Indonesia), Jessica Novia (Carbon Ethics) and Rizki Mardian (Octopus Waste Management).