Sustainable and inclusive growth: A weekly briefing

Could decarbonized shipping routes help cargo vessels go green? Our weekly digest of McKinsey insights explores that topic and more.

Sustainable and inclusive growth: Briefing note #15, September 29, 2022

Ships powered by green energy will need specialized ports and fueling stations. This week, a McKinsey article looks at early development plans for green corridors—shipping routes designed to accommodate vessels that run on alternative fuels. Green corridors will require significant investment and will necessitate complex interplay between a wide variety of public and private stakeholders. A separate McKinsey piece examines efforts to decarbonize a fleet of much smaller conveyances: the recreational-vehicle (RV) sector (which includes pleasure boats, snowmobiles, and motor homes) might be able to reduce its greenhouse-gas emissions by embracing new materials and methods. Meanwhile, a discussion about CO2 removal (CDR) investigates the technique’s potential capacity to mitigate global warming.

In determining the feasibility of creating green shipping corridors, four considerations take priority: the supply chain that will provide alternative fuels for ships; the port infrastructure required to transport, store, and handle those fuels; the investment needed to build new kinds of vessels powered by those fuels; and the interests of cargo owners and end customers. McKinsey partner Matt Stone and coauthors offer a blueprint, created in collaboration with the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, that lays out the technical, economic, and regulatory challenges faced by the shipping industry as it works to create routes conducive to alternative-fuel use.

Buyers of RVs such as personal watercraft, snowmobiles, and motor homes have indicated that they’re willing to pay more for eco-friendly products, which means that RV companies that reduce their emissions might be able to seize a greater share of this $90 billion industry. Senior partner Patrick Lahaie and coauthors advise manufacturers to consider building more electric-powered RVs (more than 60 percent of RV customers say they would likely be willing to pay more for an electric vehicle) and to rethink their use of materials (by finding greener sourcing methods for key building blocks such as aluminum and fiberglass).

Emissions reduction is only part of the decarbonization equation. CDR could also play a vital role in efforts to mitigate climate change. CDR involves removing CO2 from the atmosphere—via chemical or biological absorption methods—and then storing it safely. Senior partner Mark Patel and coauthors say companies might eventually be obliged to pay for CDR to hit their climate-related targets. By 2050, the CDR market could be worth $1 trillion a year.

Here are this week’s other notable findings from our research:

Our latest edition of Author Talks features journalist and former high-school cross-country coach Linda Flanagan speaking about her book, Take Back the Game: How Money and Mania Are Ruining Kids’ Sports—And Why It Matters (Penguin Random House, August 2022). Flanagan says youth sports have gone from accessible and fun to expensive and stressful—causing anxiety for both kids and parents.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #14, September 22, 2022

Could chief information officers play a vital role in the world’s decarbonization efforts? Our weekly digest of McKinsey insights explores that topic and more.

Enterprise technology accounts for about 1 percent of the world’s total greenhouse-gas emissions. It’s a sizable amount, roughly equivalent to half the emissions from aviation or shipping. This week, a McKinsey article examines strategies for greening organizations’ technology use. Meanwhile, a survey about minimobility—a concept involving lightweight, three- or four-wheeled electric contraptions—finds that there might be a sweet spot between e-bikes and full-size electric vehicles (EVs). And a piece looks at ways that the COVID-19 pandemic has exacerbated gender disparities in employment.

Chief information officers (CIOs) can aid decarbonization efforts by scrutinizing the emissions caused by their companies’ tech devices and data centers. Senior partners Andrea Del Miglio and Jeffrey Lewis and coauthors suggest that CIOs could reduce emissions by more carefully managing the procurement and recycling of end-user devices (such as laptops, phones, and printers) and by migrating more of their companies’ computer workloads to the cloud instead of using on-premises data centers. Moves like these might require minimal investment while achieving significant results.

Somewhere between the realms of micromobility (which refers to two-wheeled vehicles such as e-bikes and e-scooters) and EVs (full-size electric vehicles with four wheels), there exists minimobility—a segment that includes three- and four-wheeled electrified rigs weighing 100 to 500 kilograms and capable of carrying one or two people. Partners Kersten Heineke and Timo Möller and coauthors say that minimobility could make important contributions to the transportation landscape. Minimobility vehicles offer more cargo capacity and weather protection than e-bikes and e-scooters but are cheaper, easier to park, and consume less energy than standard EVs.

The world was moving closer to gender equality in employment—until the COVID-19 pandemic interrupted the trend. Women represent about 40 percent of the global workforce but account for as much as 54 percent of COVID-19-related job losses. McKinsey Global Institute partner Mekala Krishnan identifies several reasons the pandemic pushed women out of the workplace. Among them: women are more likely to work in the sectors most disrupted by COVID-19 (including retail and accommodation) and are also more likely to take on additional family care responsibilities during a crisis (which translated, in the United States, to a ten- to 15-hour increase in unpaid work per week when the pandemic arrived).

Here are this week’s other notable findings from our research:

Our latest edition of Author Talks features Harvard professor and former Medtronic CEO Bill George speaking about his book, True North: Leading Authentically in Today’s Workplace, Emerging Leader Edition (Wiley, August 2022). In an interview with McKinsey Global Publishing’s Rick Tetzeli, George says he updated his original bestseller to teach a new generation of leaders how to gain trust through authenticity.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create a more inclusive economy on McKinsey.com.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #13, September 15, 2022

Using more of the food we grow could benefit society, corporations, and the planet. Our weekly digest of McKinsey insights explores that topic and more.

Roughly $600 billion worth of food is lost each year before it ever reaches store shelves or consumers. This week, a McKinsey article looks at ways for farmers, manufacturers, and grocers to reduce food loss. Conserving food could ameliorate global hunger, diminish carbon emissions, and be good for business. Meanwhile, a look at Fortune Global 500 companies’ stances on environmental harm finds that most set climate-related targets but far fewer establish targets connected to issues such as freshwater consumption or biodiversity loss. Elsewhere: a McKinsey report on Asian American workers finds that Asian Americans perceive low levels of fairness in the workplace and struggle to get promoted into the highest ranks of corporate leadership.

The world squanders 33 to 40 percent of its annual food production, incurring needless greenhouse-gas emissions along the way. About half of this results from “food loss,” which occurs during production and processing stages and is not to be confused with “food waste,” which happens after food is distributed to retailers and consumers (exhibit). There are three food loss culprits: farms producing more food than they can sell, stringent customer requirements that make some edible food unmarketable, and handling damage that renders food unfit to eat. Senior partners Clarisse Magnin-Mallez and Björn Timelin and coauthors say that solutions will require farmers, manufacturers, and grocers to work together but could result in both environmental gains and boosts to bottom lines.

About half of global food loss and waste happens upstream, before products arrive at retailers’ stores or warehouses.
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More than 80 percent of Fortune Global 500 companies have set climate-related targets (and nearly all acknowledge the existence of climate change). But, find senior partner Kartik Jayaram and coauthors, those companies are less likely to address other “nature positive” goals publicly. Issues such as the degradation of seabeds or the loss of biodiversity could become the focus of future regulatory decisions, so companies might consider broadening their understanding of these concerns now.

Asian American workers earn 93 cents for every dollar earned by White colleagues. They also fail to receive proportional representation at the highest rungs of the corporate ladder. Senior partner Kweilin Ellingrud and coauthors use data to dispel myths about Asian Americans in the workplace and then suggest five actions that companies can take to improve outcomes and experiences. Among them: collect more data that are disaggregated by Asian American ethnicity because, for example, the experiences of South Asians can differ from those of East Asians.

Here are this week’s other notable findings from our research:

  • McKinsey’s latest survey of global economic conditions finds that geopolitical risk is a top CEO concern. In a related article, senior partners Andrew Grant and Jean-Christophe Mieszala and their coauthor limn six types of resilience that organizations can cultivate amid the fraught geopolitical landscape. Among them: reputational resilience, which involves knowing clearly what an organization stands for and what it opposes.
  • A McKinsey survey on digital trust finds that consumers weigh personal data protection nearly as much as price when making buying decisions. Meanwhile, note senior partners Alex Singla and Kate Smaje and their coauthors, nearly 90 percent of companies believe that they are at least somewhat effective at mitigating digital risks—but 57 percent of executives report that their organizations have suffered at least one material data breach in the past three years.
  • Poppy Jaman, CEO of the mental-health advocacy group MindForward Alliance, speaks with McKinsey senior partner Ramesh Srinivasan about ways to foster better mental health in workplaces and homes. Jaman urges organizational leaders to be open about their own mental-health struggles.

Our latest edition of Author Talks features McKinsey senior partner Asutosh Padhi and coauthors Gaurav Batra and Nick Santhanam discussing their book, The Titanium Economy: How Industrial Technology Can Create a Better, Faster, Stronger America (PublicAffairs, October 2022). In an interview with McKinsey Global Publishing’s Lucia Rahilly, the authors highlight an under-the-radar sector that is flourishing financially and has the potential to push forward positive societal changes.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create a more inclusive economy on McKinsey.com.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #12, September 8, 2022

Financial-services providers have often underserved Black communities. Our weekly digest of McKinsey insights explores that topic and more.

Given that 47 percent of Black households are unbanked or underbanked, there exists ample opportunity for financial-services providers to forge more inclusive relationships with Black consumers. This week, a McKinsey article outlines strategies for banks, insurers, and wealth managers to keep in mind as they endeavor to provide much-needed products to an underserved market. Elsewhere: a piece investigates the thesis that companies are better off playing offense, not defense, when addressing climate change. And an article about biases that can skew corporate hiring and promotion examines what happens when good intentions get derailed by motivated reasoning.

Black consumers are often less satisfied than their non-Black peers regarding the financial products available to them (exhibit). Research from the McKinsey Institute for Black Economic Mobility suggests that while Black consumers are especially eager to explore new financial services, these consumers’ needs are not well met by current offerings from financial-services companies. Senior partner Shelley Stewart III and coauthors present five strategies the industry could implement to more effectively capture opportunities in Black communities. Among them: develop tailored solutions for short-term financing, make procedures for opening accounts less cumbersome, and provide culturally intelligent customer service.

Black consumers are generally less satisfied than their non-Black peers with financial offerings.
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Efforts to meet the world’s climate change goals could spur the single largest asset reallocation in history—while putting up for grabs $9 trillion to $12 trillion in new annual revenue pools. Senior partner Michael Birshan and coauthors discuss ways that companies can seize the initiative both to hasten and to benefit from a net-zero future. Among emerging profit opportunities: carbon accounting services that rely on developing technologies to track and manage emissions.

Biases can distort perceptions of fairness in organizational hiring and promotion. Tim Koller and coauthors examine the perils of motivated reasoning—a type of bias that can occur when executives place faith in conclusions they want to be true instead of those supported by evidence. Systematically reviewing a company’s past actions and using data to inform policy setting can help replace emotionally driven beliefs with fact-based assessments.

Here are this week’s other notable findings from our research:

  • Arianna Huffington, founder and CEO of Thrive Global, spoke with McKinsey’s Erica Coe about ways that organizations can reduce burnout resulting from work stress. Huffington (whose company creates wellness-focused software) says burnout is an epidemic that is negatively affecting workers’ health and happiness.
  • Mark Boggett, managing director of Seraphim Capital, spoke with McKinsey’s Mina Alaghband for an episode of the At the Edge podcast. Boggett, a prolific investor in space technology, says three trends are driving the sector: lower satellite launch costs, smaller and cheaper satellites, and a burgeoning digital infrastructure in orbit.
  • Senior partner Dana Maor and coauthors urge companies to eschew fear-based decision making when it comes to hiring tech talent. Companies might be tempted to stay safe by choosing proven workers, but many potential tech hires are capable of growing into larger roles.
  • For an episode of the Inside the Strategy Room podcast, economist John List spoke with McKinsey senior partner Yuval Atsmon about how to know when an idea can become a blockbuster. List’s new book, The Voltage Effect: How to Make Good Ideas and Great Ideas Scale, argues that effective scaling is subject to what’s called the “Anna Karenina principle”: if even one element of an idea is flawed, scaling will magnify the problem.

Our latest edition of Author Talks features science journalist Jessica Nordell speaking about her book, The End of Bias: A Beginning (Macmillan, reissued August 2022). In an interview with McKinsey Global Publishing’s Raju Narisetti, Nordell contends that subtle, ambiguous bias within an organization can actually be more detrimental than explicit bias.

McKinsey is striving to create a more inclusive economy through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s commitment to inclusive growth on McKinsey.com.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #11, September 1, 2022

Decarbonization is coming to the transport sector—faster than some have predicted. Our weekly digest of McKinsey insights explores that topic.

Propelling people and goods around the world has long been a major source of greenhouse-gas emissions. This week, two McKinsey pieces look at efforts to decarbonize the transport sector. First, an article about the promise of power-to-liquid (PtL) fuel examines this technology’s potential to green the aviation industry. Then, an interview with a truck maker’s head of operations highlights the economic case for electrifying vehicles while revealing what’s really behind the demand for cleaner trucks and buses.

PtL fuel is produced through complex processes that convert carbon into a liquid capable of powering jet engines. PtL is still in a developmental phase, with considerable technical challenges yet to be overcome. But a joint report from McKinsey and the World Economic Forum makes the case that PtL can play a central role in aviation’s future, lowering emissions while also generating commercially useful by-products. Senior partner Bernd Heid and coauthors forecast rising demand for PtL while cautioning that substantial investments—a cumulative total of $3 trillion to $4 trillion between 2022 and 2050—will be required to ramp up production. Providing the carbon necessary for PtL via direct air capture could be an important way to boost efficiency and further reduce emissions.

Electrification of trucks and buses will be driven less by regulation than by customers’ own decarbonization targets, says Michael Grahe, head of operations for truck and bus manufacturer Navistar. In a discussion with McKinsey senior partner Philipp Kampshoff, Grahe also identifies total cost of ownership as a key consideration in electric-vehicle adoption while predicting that by 2025 electric trucks and buses will outscore their nonelectric brethren on that metric. Grahe says Navistar is already taking orders on a fully electric school bus but warns that insufficient highway charging infrastructure could delay the electrification of long-haul trucking.

Here are this week’s other notable findings from our research:

  • This era’s volatility—pandemics, conflicts, inflation—might tempt some corporate leaders to hunker down and play defense. But crisis creates opportunity. Global managing partner Bob Sternfels and senior partners Michael Birshan and Ishaan Seth counsel leaders to act courageously. An effective organization will maximize three edges over competitors: deeper insight, bolder commitment, and quicker execution.
  • The building materials sector has been upended by the ballooning cost of inputs such as steel and crude oil. Senior partner Jan-Christoph Köstring and coauthors suggest several mitigating strategies. Among them: create pricing agreements that allow for rapid resets in response to cost changes.
  • Inflation has been particularly tough on property and casualty insurance carriers. Senior partners Kia Javanmardian and Fritz Nauck and coauthors assess the effects on insurers of three potential future scenarios. Leaders who wish to be prepared might consider creating a “resilience playbook” now.
  • The number of manufacturing firms and plants in the United States has fallen by roughly 25 percent since 1997. But, suggest senior partners Mike Doheny and Asutosh Padhi and coauthors, a US manufacturing renaissance may soon be at hand. To thrive, US manufacturing must pay close attention to trends in sustainability, digitization, and automation.

Our latest edition of Author Talks features husband-and-wife author team Nathan Furr and Susannah Harmon Furr speaking about their new book, The Upside of Uncertainty: A Guide to Finding Possibility in the Unknown (Harvard Business School Press, July 2022). In an interview with McKinsey Global Publishing’s Astrid Sandoval, the authors say human beings are wired to fear uncertainty but are better off finding ways to embrace it.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #10, August 25, 2022

Sustainable production of commodities is a promising frontier in decarbonization. Our weekly digest of McKinsey insights explores that topic.

The advent of ‘green commodities’ (produced using clean, low-emission methods) is reshaping the commodities sector. Molecularly identical materials can now command different prices depending on their backstories. This week, a McKinsey article examines what happens when commodities are greened and materials such as aluminum and steel are suddenly, well, “decommoditized.” Elsewhere, a piece investigates the challenges and opportunities presented by efforts to decarbonize the public sector.

In the past, commodity producers rarely needed to consider things such as branding or price premiums. One shipment of aluminum, steel, or polypropylene was indistinguishable from another, and the lowest price generally won the day. That has all changed now that green (more sustainably produced) and gray (less sustainably produced) versions of these materials exist. Demand for some green commodities is expected to outstrip supply in the coming decade (exhibit). Senior partner Michel Van Hoey and coauthors advise commodity producers to begin decarbonizing sooner rather than later and to carefully assess customers’ willingness to pay a “climate premium.”

Demand for certain green materials could exceed supply in large markets.
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Public-sector entities often set the agenda and create regulations for decarbonization. But, say senior partner Jonathan Woetzel and coauthors, the public sector might consider ways to green itself. Although they are often less agile than their private-sector counterparts, public-sector organizations—given their scope and influence—could have an outsize effect on emissions reduction. Among suggested areas for public-sector focus: decarbonizing buildings, creating more sustainable workforce travel policies, and introducing new procurement criteria.

Here are this week’s other notable findings from our research:

  • America’s crisis management community has made great strides in the two decades since the September 11 attacks. Tony D’Emidio and coauthors offer thoughts on how to prepare for future crises. Useful questions to ask: What role could the private sector play in preparedness? And how could the disaster management community encourage more civilians to get involved in preparedness efforts?
  • Conflict between Russia and Ukraine—in one of the world’s six breadbasket regions—has greatly increased worries about global food security. Senior partners Daniel Aminetzah and Nelson Ferreira and coauthors warn that food shortages might worsen next year. Swift steps, such as providing financial aid to at-risk populations, could help mitigate the severity of the crisis.
  • Many industrial companies have little experience with setting prices during a time of inflation. Nicolas Magnette and coauthor advise industrial companies to engage in active price management and to consider short-, mid-, and long-term time horizons as they reset pricing strategies.
  • In the latest edition of McKinsey’s American Opportunity Survey, 36 percent of employed respondents self-identify as independent workers. Senior partners André Dua and Kweilin Ellingrud and coauthors discovered that these respondents, while reporting many barriers to their well-being, are far more optimistic about economic opportunity than workers overall.

Our latest edition of Author Talks features Danish design experts Christian Bason and Jens Martin Skibsted speaking about their new book, Expand: Stretching the Future By Design (Penguin Random House, May 2022). In an interview with McKinsey Global Publishing’s Adam Volk, the authors describe the limitations of traditional “design thinking.”


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #9, August 18, 2022

Though its doubters are legion, ESG is more essential now than ever. Our weekly digest of McKinsey insights explores that topic.

The abbreviation ‘ESG’ (environmental, social, and governance) was coined in 2005 as shorthand for a more responsible approach to doing business. Lately, the concept has been met increasingly with skepticism from critics who suggest that companies either can’t or shouldn’t bother to uphold ESG precepts. This week, a pair of McKinsey articles make the affirmative case for ESG—laying out reasons to care about it and strategies to implement it effectively. Elsewhere, a conversation with a CDO (chief diversity, equity, and inclusion officer) focuses on methods for building a culture of representation.

Naysayers complain that ESG is a distraction for many companies, creating goals that are impossible to meet and effects that are impossible to measure. Senior partners Lucy Pérez, Vivian Hunt, Hamid Samandari, and coauthors offer rebuttals to those claims, asserting that ESG is now more essential, relevant, and quantifiable than ever before. Addressing ESG is imperative for companies that wish to demonstrate they deserve society’s trust.

For ESG to make a difference, it must be implemented in a rigorous, socially attuned manner. Having established the “why” of ESG, Pérez, Hunt, Samandari, and coauthors move to the “how”—practical steps for making ESG real. Among key components they recommend for an effective ESG strategy: benchmark regularly, think systematically about trade-offs, and let investors see how ESG meshes with the business model.

To put in place a successful diversity, equity, and inclusion (DEI) strategy, a company must designate a DEI leader. Indhira Arrington is the first global chief DEI officer of Ares Management, an alternative asset management firm. Arrington talks with McKinsey’s Diana Ellsworth and Drew Goldstein about how she became a CDO, how she created Ares’ DEI plan, and where she sees DEI strategy making the most difference.

Here are this week’s other notable findings from our research:

Looking for more insights? McKinsey Global Publishing produces more than 40 newsletters on a broad range of topics. The Daily Read highlights one article per day that we think is worthy of special attention. Monthly Highlights is a summary of our top-performing articles from the past 30 days. And On Point makes a daily connection between top news stories and a published McKinsey insight.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #8, August 11, 2022

A more inclusive approach to mobility will lead to faster decarbonization. Our weekly digest of McKinsey insights explores that topic.

The e-mobility revolution holds implications for sustainability and inclusivity: decarbonization will happen faster if everyone is on board. This week, McKinsey surveyed the preferences of Black automotive consumers, whose spending is expected to reach $190 billion by 2030. McKinsey research suggests that 40 percent of Black consumers expect to purchase an electric vehicle (EV) in the next ten years—but the industry’s relationship with these buyers will depend on its equitable treatment of them. Two other vehicle-focused pieces looked at growth opportunities for chemical companies supplying EV manufacturers and at changes in the investment allocations of shared-micromobility funders. Elsewhere: an interactive timeline visualized shifts in spending, output, and job creation in eight key sectors as we advance toward a net-zero world.

A McKinsey survey discovered that Black respondents were three times more likely than other respondents to express interest in disruptive mobility trends such as EVs. Black consumers are, however, particularly concerned about the availability of charging stations. Senior partner Shelley Stewart III and coauthors advise EV players to distribute charging infrastructure equitably, ensuring there will be no “charging deserts” in Black neighborhoods.

EV manufacturers are searching for materials that improve the efficiency of parts such as batteries, motors, and wiring and are increasingly willing to pay higher costs for superior performance. In light of this, senior partner Chris Musso, senior expert Dennis Schwedhelm, and coauthors advise chemical companies to consider more participation in the automotive industry and to assess whether they might provide profitable solutions.

E-kickscooters have come to dominate the shared-micromobility segment. Bikes were winning prepandemic, but electrified stand-up scooters now attract nearly 90 percent of investment, with mopeds a distant third (exhibit). Kersten Heineke and coauthors note that a growing share of funding is directed toward parking and charging solutions, which are vital elements for shared-micromobility fleets.

Decarbonization will upend markets and force reallocation of capital. Along the way, it will create trillions of dollars in opportunity. Senior partners Hamid Samandari and Humayun Tai offer an interactive look at what the march toward net-zero will mean for particularly exposed sectors such as steel, cement, and forestry. Clicking through a detailed timeline to 2050 reveals projected shifts in emissions, capital spending, output, and jobs.

About 90 percent of micromobility investments now go to e-kickscooters.
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Here are this week’s other notable findings from our research:

Our latest edition of Author Talks features Andrew Leon Hanna, an Egyptian American lawyer and human rights advocate, speaking about his new book, 25 Million Sparks: The Untold Story of Refugee Entrepreneurs (Cambridge University Press, May 2022). In an interview with McKinsey Global Publishing’s Joyce Yoo, Hanna suggested it would be financially “foolish” to ignore the plight of refugees, who are among the most entrepreneurial people in the world.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #7, August 4, 2022

Inclusive growth means lifting all, not just some. Our weekly digest of McKinsey insights explores that topic.

This week, a trio of McKinsey pieces examined the challenge of creating growth that leaves no one behind. A report on race at work found that hourly frontline workers, such as waiters and employees of retail stores—who are disproportionately people of color—often perceive that they face limited paths for advancement and a general lack of fairness and inclusion. A discussion about the growing divide between urban and rural America focused on strategies to encourage entrepreneurship and innovation in sparsely populated communities. And a look at the state of apprenticeship touched on the perils of the “mini-me” mindset: leaders offer opportunities only to team members they find most similar to themselves. Elsewhere, a pair of articles about efforts to decarbonize transport looked at ways to encourage more travelers to choose passenger rail and more shipping carriers to green their operations.

More than 70 percent of frontline workers would like to be promoted by their companies, but only 4 percent actually graduate to corporate jobs. Senior partner Lareina Yee and coauthors encourage companies to enable a smoother path to the middle class by investing more in their frontline employees. Workers of color in frontline jobs frequently receive little if any sponsorship in their organizations and face too many obstacles in climbing the corporate ladder.

The COVID-19 pandemic exacerbated the already widening gulf between the fortunes of urban and rural America. Matt Dunne, the founder of the Center on Rural Innovation, spoke with Rachel Riley, of McKinsey’s Future of America podcast, about his belief that tech can help narrow the divide. Small-town America has 13 percent of the country’s workforce but only 5 percent of its math and computing jobs.

Apprenticeship is a valuable tool for retaining talent and building the skills of employees. But leaders must be mindful about who gets to apprentice—and who doesn’t. Lisa Christensen and Tony Gambell spoke to The McKinsey Podcast about the keys to a successful apprenticing relationship (one is that the expert should know when to “fade away”) and about the danger of succumbing to the mini-me bias: sometimes experts are tempted to work only with apprentices who remind them of themselves.

The transport sector, which accounted for roughly 21 percent of the world’s carbon emissions in 2020, is looking for ways to get greener. Senior partner Detlev Mohr and coauthors say that shippers and carriers could collaborate to create incentives for decarbonization. Among the suggestions: shippers could create contracts requiring logistics partners to set carbon reduction goals.

Passenger rail experienced a steep drop in ridership during the pandemic. Since rail is generally more sustainable than flying or driving, restoring rail’s share of passenger travel would aid decarbonization. Carsten Lotz and coauthors examine strategies that would help rail to differentiate itself—for instance, providing better service and denser travel networks.

Here are this week’s other notable findings from our research:

Our latest edition of Author Talks features Melissa Daimler, Udemy’s chief learning officer, speaking about her new book, ReCulturing: Design Your Company Culture to Connect with Strategy and Purpose for Lasting Success (McGraw-Hill, May 2022). In an interview with McKinsey Global Publishing’s Katherine Tam, Daimler advised leaders to prioritize organizational culture instead of dismissing it as “soft stuff.”


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #6, July 28, 2022

Could heat pumps save Europe—and the world? Our weekly digest of McKinsey insights explores the topic.

With Russia threatening to slash its natural-gas exports in coming months, Europe could face severe heating challenges in the winter. This week, McKinsey assessed the potential for electric heat pumps. With 2.2 to 4.5 times the efficiency of gas furnaces, heat pumps are an improving technology that might provide a heating alternative while also cutting carbon emissions. Meanwhile, McKinsey’s look at sustainability in the grocery sector suggested that grocers are uniquely positioned—as intermediaries between farmers and consumers—to push for decarbonization of the global food system. And an examination of B2B opportunities presented by the world’s shift away from fossil fuels advised companies to look for durable competitive advantages that could arise from the transition. Elsewhere, a continuing investigation of equity in US higher education found that very few institutions achieve both representational parity and above-average rates of completion for students from historically underrepresented populations.

Heat pumps provide an increasingly viable solution for electrifying both space- and water-heating systems in buildings. Blake Houghton, Evan Polymeneas, and coauthors note that with equipment and installation expenses falling—and natural-gas prices rising—heat pumps are in some cases approaching cost parity with fossil-fuel-generated heat. A McKinsey analysis predicts that heat pumps, which could substantially reduce buildings’ emissions (exhibit), might constitute 90 percent of new heating-unit sales by 2050.

Heat pumps powered by renewable energy could produce significantly lower emissions than other common heating methods.
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The food system accounts for more than 30 percent of global greenhouse-gas emissions. Most of these emissions, such as those resulting from farm operations, fall outside grocers’ direct control. But, according to Bartosz Jesse and coauthors, grocers can be a powerful force for decarbonization while saving costs and capturing value along the way.

The transition out of fossil fuels could require an average annual investment of roughly $9 trillion over the next three decades. Senior partner Georg Winkler and coauthors say the B2B companies that reap the most benefit from these changes will be those that play offense, making bold strategic decisions instead of merely avoiding risks.

Equity in higher education will require both better student representation from historically marginalized populations and improved efforts to help those students graduate. Senior partner Jonathan Law and coauthors used data to illustrate that few institutions get both parts of this equation right. Almost 20 percent of institutions have not made recent, meaningful progress on either dimension.

Here are other notable findings from our research this week:

  • The world faces an acute shortage of healthcare workers, exacerbated by the demands of aging populations and newly emerging pathogens. Senior partners Pooja Kumar and Matt Wilson and coauthors offer strategies to rebuild the talent pipeline.
  • A McKinsey survey on US summer travel found that leisure travel is booming—increasingly outstripping even levels seen before the onset of the COVID-19 pandemic. Ryan Mann and coauthors discovered that nearly 70 percent of travelers plan to take a summer vacation “no matter what.”
  • Governments could benefit from AI innovations in areas such as crisis response, education, and healthcare but often face barriers that prevent them from capturing AI’s full value. Senior partner Tom Isherwood and coauthors suggest useful ways for governments to ease the implementation of AI technology.
  • Senior partner Asutosh Padhi interviewed Alan Murray, CEO of Fortune Media and former head of the Pew Research Center, about the emerging social consciousness of business. Murray says stakeholder capitalism is sometimes just a PR ploy but, done right, can be deeply meaningful.

Our latest edition of Author Talks features former marketing executive Dalia Feldheim speaking about her new book, Dare to Lead like a Girl: How to Survive and Thrive in the Corporate Jungle (Rowman & Littlefield, June 2022). In an interview with McKinsey Global Publishing’s Raju Narisetti, Feldheim advised executives to incorporate more “feminine traits”—such as passion and intuition—into their leadership style.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #5, July 21, 2022

Is net-zero aviation cleared for takeoff? Our weekly digest of McKinsey insights explores the topic.

The Farnborough International Airshow opened on Monday—amid sweltering UK temperatures—and one major theme among executives in attendance has been aviation’s climate impact. This week, a trio of McKinsey articles explored the quest to decarbonize the sector. A report found that aviation can achieve net-zero emissions by 2050 through accelerated focus on aircraft efficiency and sustainable fuel production. An examination of aircraft life cycles suggested that reducing non-fuel-related emissions—by devising greener manufacturing and maintenance operations—can also play a role. And a look at capital flows into future air mobility, or FAM (think electric flying cars), argued that funding, though slightly down this year, remains comparatively strong. Elsewhere: a McKinsey analysis of equity in higher education revealed that, for some historically marginalized groups, progress seems to have stalled.

The Making net-zero aviation possible report—created by an alliance of climate leaders, in conjunction with McKinsey—proposed scenarios for reaching net zero in the sector by 2050. Among the most promising levers for decarbonization are power-to-liquid approaches that convert electricity into sustainable, synthetic liquid fuels capable of running aircraft engines (exhibit). Axel Esqué and his coauthors estimate this technology could enter the market at a large scale by the late 2020s.

Global aviation can achieve net zero by 2050.
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Fuel-related emissions account for most of aviation’s climate impact, but a broader reckoning must also assess an aircraft’s full life cycle. A recent post on the Future Air Mobility blog suggests that aerospace companies moving to decarbonize their operations—manufacturing, assembly, maintenance—can play a part in emissions reduction. Sourcing low-carbon materials such as green aluminum will aid the effort.

Investment in the FAM industry slowed in the first half of 2022, but Robin Riedel and his coauthors say funding is still on pace with historical trends. FAM entrepreneurs are working on innovative airframe designs and propulsion systems. One of the more active investment areas concerns development of passenger electric vertical takeoff and landing vehicles (eVTOL)—sometimes referred to as “flying cars.”

Historically marginalized populations continue to be underrepresented in higher education. An analysis from senior partner Jonathan Law and his coauthors found that, if current trends persist, it could take 70 years for these groups to achieve full equity in student admissions. As for faculty: there was effectively no progress in representation between 2013 and 2020.

Here are other notable findings from our research this week:

Our latest edition of Author Talks features Stanford Graduate School of Business lecturer Susan Wilner Golden speaking about her new book, Stage (Not Age): How to Understand and Serve People over 60—the Fastest Growing, Most Dynamic Market in the World (Harvard Business Review Press, June 2022). In an interview with McKinsey Global Publishing’s Raju Narisetti, Golden explained that extended life spans are creating a “longevity economy.”


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #4, July 14, 2022

Assumptions about sustainability may not always align with data. Our weekly digest of McKinsey insights explores the topic.

Intuitions about sustainability can benefit from reality checks grounded in science. This week, McKinsey investigated the climate impact of plastic—a frequent environmental bugbear—and discovered that widespread assumptions about this oft-maligned material might warrant some reexamination. Likewise, an article looking at trends in luxury automobiles—another common target of climate criticism—suggested that electrification will come to dominate future premium car segments. Elsewhere, on the topic of inclusivity, discussions with healthcare and financial services executives explored strategies to boost everyone’s health and wealth, regardless of background.

In a McKinsey report on the climate impact of plastics, senior partners David Feber, Stefan Helmcke, Thomas Hundertmark, Chris Musso, and their coauthors found that, while plastics often catch criticism for contributing to marine pollution and general environmental toxicity, the full picture is more complicated. In some cases, plastics can reduce greenhouse-gas emissions when compared with alternative materials like paper, aluminum, or glass (exhibit).

Soft drink container US 2020 view: PET bottle has the lowest total greenhouse-gas contribution.
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The luxury automobile segment is expected to gain market share over the next decade. It’s also where much of the most exciting vehicle innovation is happening—including cutting-edge electrification technology. Senior partner Jan-Christoph Köstring and his coauthors found that affluent customers are increasingly willing to go electric when shopping for premium cars.

The zip codes we grow up in shouldn’t determine our health outcomes, yet too often still do. In the latest episode of the McKinsey on Healthcare podcast, Daniel E. Greenleaf, CEO of Modivcare—a healthcare services provider—spoke about how his personal background has inspired him to address ongoing disparities in health equity.

Closing the racial wealth gap could boost GDP in the United States by 5 percent annually. McKinsey brought together a group of financial services executives for a video conversation about how the industry can play its part in enabling economic mobility for all.

Here are other key findings from our research this week:

Our latest edition of Author Talks features former policy maker Justin Zorn and consultant Leigh Marz speaking about their new book: Golden: The Power of Silence in a World of Noise (Harper Wave, May 2022). Quieting our minds has never been more difficult—or more important.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #3, July 7, 2022

Sustainable and inclusive growth is a global effort, happening locally. Our weekly digest of McKinsey insights explores the topic.

Achieving sustainable and inclusive growth can, and should, involve peering beyond our own backyards. This week, McKinsey zeroed in on a variety of global locales from which business insights are emerging. In Europe, consumer goods companies are discovering the potential of circularity. In Asia, an e-mobility ecosystem is growing—and creating opportunity. Africa is home to a fintech pioneer. Further articles include a multimedia look at the future of video entertainment in Hollywood, a survey of LGBTQ+ workplace experiences in the United States, and an examination of sustainable mining practices that could be implemented worldwide.

Consumer-packaged-goods companies have sometimes viewed circularity as a threat: How do you sell new goods if customers are buying the used versions? But, in fact, circularity presents growth opportunities. Senior partner Stefan Helmcke and his coauthors demonstrate that smart companies can capture value even as product life cycles are extended, with benefits for sustainability thrown into the bargain (exhibit).

By 2030, European  circular-economy product segments will grow at around 10 to 15 percent annually to reach around 400 million euros to 650 billion euros.
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E-mobility is gaining momentum in Asia, and there is growth to be captured for those who think in terms of ecosystems. Opportunity lies beyond the traditional auto industry frameworks. Senior partner Nimal Manuel and his coauthors suggest that both established firms and start-ups can grow by exploring novel relationships between technology, energy, and finance.

The popular African mobile-phone-based money service M-Pesa serves seven countries, with 50 million monthly active users. Its success has transformed lives: one study found that M-Pesa lifted 2 percent of Kenyan households out of poverty by encouraging healthier financial behavior. In the latest episode of McKinsey’s Talking Banking Matters podcast, M-Pesa’s managing director, Sitoyo Lopokoiyit, spoke about the vision driving one of Africa’s first fintechs.

McKinsey’s The Next Normal series aims its lens at the future of video entertainment. Discussions with experts from film, TV, and video games explore a push to democratize the tools of content creation and enable new, diverse voices to tell compelling stories for all audiences.

McKinsey research on “active allyship” in the workplace discovered, among other eye-opening data, that 45 percent of surveyed workers who identify as LGBTQ+ say they feel they must be careful about discussing their personal lives at work.

After years of underinvestment, mining is poised for transformation. McKinsey offers five key areas of focus for mining CEOs as they chart a future path. One suggestion: treat environmental, social, and governance (ESG) propositions as a source of value.

Here are other key findings from our research this week:

  • The latest McKinsey Global Survey on economic conditions tracks a dramatic shift in sentiment. Respondents from all corners of the world no longer suggest that geopolitical instability or the COVID-19 pandemic will be the biggest impediments to future growth. Inflation has become their number one concern for the year ahead.
  • Companies might strive for a unified culture but should accept that there are many varied paths to get there. When it comes to cultural transformation, the most effective business leaders are flexible and accommodating along the way.
  • Government leaders with good intentions often find themselves battling intransigent bureaucracies. Lessons from successful organizations can help make sure those leaders aren’t sabotaging themselves with self-defeating behaviors.
  • As demand shifts from gasoline to petrochemicals, refineries need to adapt by rethinking their operations.
  • Advertising is being transformed. Commerce media directly links ad impressions to consumer transactions, thereby improving targeting and delivering better experiences for consumers. It has the potential to generate more than $1.3 trillion of enterprise value in the United States alone.

Looking for more insights? McKinsey Global Publishing produces more than 40 newsletters on a broad range of topics. The Daily Read highlights one article per day that we think is worthy of special attention. Monthly Highlights is a summary of our top-performing articles from the past 30 days. And On Point makes a daily connection between top news stories and a published McKinsey insight.


This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #2, June 30, 2022

Accelerating sustainable and inclusive growth is often a matter of mindset. Our weekly digest of McKinsey insights explores the topic.

We tend to think of achieving sustainable and inclusive growth as the challenge of building new technology or retrofitting the physical world around us. But this week, McKinsey explored how sometimes the crucial step is developing a fresh mindset. Our research on how many Americans work from home reveals a sea change in what it means to have a job. Articles about meeting the psychological needs of all workers, improving wealth management for women, decarbonizing real estate, and pursuing global cooperation highlight how changing the way we think about people and institutions can be the key to growth.

The third edition of McKinsey’s American Opportunity Survey provides the data on how flexible work fits into the lives of workers in the United States. The most striking figure from this research is 58 percent: the number of Americans who reported having the opportunity to work from home at least one day a week (exhibit). When workers are offered flexibility, 87 percent choose to work from home at least part of the time. Senior partners André Dua, Kweilin Ellingrud, and Robert Palter and their coauthors reveal that employees’ mindsets about work have clearly changed. Now it’s up to employers to think creatively about how to satisfy workers’ desire for flexibility in ways that strengthen diversity, innovation, and productivity.

Of job holders in the United States, 58 percent—the equivalent of 92 million people—say they can work remotely at least part of the time.
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Many leaders mistakenly believe that only other professionals who have enjoyed similar success truly value the nonfinancial aspects of their work. That is simply not true, yet data show that the psychological needs of lower-earning workers are typically going unmet, far more often than is the case for higher earners. Our novel data and analysis illustrate the premium placed by all workers on psychologically satisfying work and how business leaders can respond.

Women investors now control roughly a third of total assets under management in Western Europe, valued at some €4.6 trillion. By 2030, women’s share of investments is expected to reach a total of €10 trillion. Senior partners Cristina Catania and Martin Huber and their fellow authors explore how women investors differ from men and what financial institutions should do to better serve them.

On March 21, 2022, the US Securities and Exchange Commission proposed a climate-related disclosure rule for investors. Whatever the final outcome, the proposed regulation signals a new era for how real-estate players think about their industry and climate change. Industry players are becoming aware that they need to measure their Scopes 1 and 2 greenhouse-gas emissions, work on decarbonizing buildings, and offer tenants and other stakeholders ways to reduce emissions.

The global economic landscape offers plenty to worry about, including the war in Ukraine, the difficulty of the net-zero transition, and inflation. But don’t assume that things are impossible, counsels Jean Pisani-Ferry, senior fellow at the European think tank Bruegel and professor of economics with Sciences Po in Paris. In an interview with Janet Bush and Michael Chui, executive editor and partner, respectively, at the McKinsey Global Institute, Pisani-Ferry examines nuanced ways to look at the trade-offs presented by global challenges.

Here are other key findings from our research this week:

Our latest edition of Author Talks features Marcus Buckingham, a business consultant and motivational speaker, speaking about his new book: Love + Work: How to Find What You Love, Love What You Do, and Do It for the Rest of Your Life (Harvard Business Review Press, April 2022). Employees who find teams, projects, and situations to love tend to be highly successful.


This briefing note, based on our latest published insights, was prepared by Katy McLaughlin, a senior editor in McKinsey’s Southern California office.




Sustainable and inclusive growth: Briefing note #1, June 23, 2022

A new era is possible—one that sees growth and societal benefits as complementary goals that reinforce each other. Our weekly digest of McKinsey insights explores the topic.

For over two years, this compendium of McKinsey’s latest research focused on COVID-19’s implications for business. While our pandemic-related insights will continue, we are pivoting our summary of the week’s publishing to a new topic of similar urgency and complexity: how to achieve sustainable and inclusive growth (SIG). This regular briefing, curated by McKinsey Global Publishing editors, will highlight our most recent perspectives on how companies, organizations, and society can view growth and societal benefits not as conflicting goals but as equal imperatives for holistic impact.

We are launching the “SIG briefing note” on the heels of McKinsey’s 2021 ESG Report, which provides a multifaceted view of our approach to environmental, social, and governance imperatives. Before we ask other organizations to examine themselves for ways to improve, we must ask the same of ourselves. In this report, we share our decarbonization efforts, progress on diversity and inclusion, sustainable procurement, and other cornerstones of ESG. Case studies highlight companies that have successfully merged growth with what in another era might have been considered “social missions.” The report explains why it is no longer helpful to look at social missions as separate from traditional corporate growth and profitability goals; instead, a SIG mindset sees addressing a broader array of stakeholders’ needs as part and parcel of growth.

At McKinsey, we believe the future belongs to those who can drive growth that is both sustainable and inclusive—and we are working with purpose, on issues from decarbonization to diversity, in order to make that future a reality.

Bob Sternfels, Global Managing Partner, McKinsey & Company

Getting to net zero will depend on building green businesses to produce the technologies, materials, and systems the transition requires. Like the digital leaders of our time, successful green business builders have been adept at creating and shaping markets rather than spectating and waiting for the markets to appear, and they have embraced the notion of accelerated scaling. Senior partners Rob Bland and Tomas Nauclér and partner Anna Granskog highlight promising innovations and best practices.

Car manufacturers should look beyond the tailpipe to deliver greener cars. Industry players can capture carbon and cost savings by scrutinizing the end-to-end manufacturing value chain. More environmentally friendly cars at a lower per-unit cost will depend on moves including redesigning components, implementing circularity to decrease waste, and making design shifts to reduce the amount of raw material required. Collaboration with suppliers and R&D are key enablers of both the commercial and technical aspects of the implementation strategy.

Nearly all European flat-steel players have announced plans to gradually decarbonize production processes for the sheets and plates used by the automotive, machinery, and construction industries. For many of the newly built plants, the initial intention was to use natural gas for parts of the process. Now, rising natural-gas and electricity prices, as well as potential limitations on the natural-gas supply, are forcing reconsideration. McKinsey’s analysis of how to safeguard the green-steel industry suggests four scenarios for how the situation may play out, two of which represent the most viable courses of action.

Strengthening Black-owned businesses can accelerate inclusive growth. Twenty percent of Black Americans start businesses, but only 4 percent of these businesses survive the start-up stage. On the Future of America podcast, McKinsey senior partner Tiffany Burns and associate partner Tyler Harris discuss challenges Black entrepreneurs face. One key sticking point: a lack of contacts, mentors, and a network that can be crucial for building beyond the “great idea” phase.

Here are other key findings from our research this week:

  • Edtech start-ups raised record amounts of venture capital in 2020 and 2021, and market valuations for bigger players soared. To learn how edtech is being adopted in higher education, McKinsey surveyed over 1,400 students, faculty, and experts at US public and private nonprofit colleges and universities. Senior partner Varun Marya and his coauthors share which learning tools have the highest uptake, how students and educators view them, the barriers to higher adoption, and the notable impacts on learning.
  • Organizations can prepare for compliance with new US cybersecurity regulations by following a three-step approach for readiness, response, and remediation.
  • The McKinsey Quarterly interviewed entrepreneur Marc Andreessen about Silicon Valley’s past and future. He advises companies to identify their smartest technologists—and make them the leaders.
  • Three new factors have emerged as critical to capturing value from digital transformations. They include the development of proprietary assets, the use of digital tech to achieve strategic differentiation on customer engagement, and a focus on attracting and developing tech-savvy executives.

Our latest edition of Author Talks features Daniel Coyle discussing his new book, The Culture Playbook: 60 Highly Effective Actions to Help Your Group Succeed (Bantam Books, May 2022). Coyle, an adviser to Google, Microsoft, and the Navy SEALs, shares methods that allow teams to connect over goals and a common purpose. Companies should not rely on people being “a good culture fit,” which can lead to homogeneity, but instead should look for ways employees can bond, including by sharing their vulnerabilities.

Also in Author Talks, Julien and Kiersten Saunders, creators of the blog rich & REGULAR, discuss their new book, Cashing Out: Win the Wealth Game by Walking Away (Portfolio, June 2022). The authors say the FIRE movement—which stands for “financial independence/retire early”—is lesser known in communities of color, where there may be fewer role models of people who have successfully “cashed out.” Learning to eschew lifestyle inflation, to save, and to invest are key to financial independence.


This briefing note, based on our latest published insights, was prepared by Katy McLaughlin, a senior editor in McKinsey’s Southern California office.

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