Climate change has reached a critical magnitude, creating physical (acute and chronic), transitional (changing technologies, regulations, policies, and stakeholder expectations), and liability risks. The speed at which these changes are happening makes it imperative for organizations to understand their cascading impacts and engage on a path of prudent mitigation and orderly adaptation.
We help public- and private-sector entities build the capabilities, tools, and processes to understand their climate risk exposure and optimize their adaptation and mitigation strategies.
McKinsey helps organizations develop robust qualitative and quantitative approaches to identify, measure, and manage their exposure to climate risk under all relevant scenarios.
Our Approach
Our comprehensive approach leverages deep industry knowledge, change-management expertise, proprietary risk frameworks, and advanced analytics to help our clients in three key ways:
- building capabilities, processes, and governance to integrate climate risk into decision making
- analyzing the universe of physical and transitional risks, prioritizing them based on potential impact, building and evaluating stress scenarios to quantify potential impact, and devising adaptation and mitigation strategies
- charting energy-transition strategies that provide customized insights to guide companies on the most practical pathway to decarbonization
Examples of our work
Strategy and risk-capability development
We helped a multilateral development bank integrate climate risk into credit-risk measurement by developing a climate-risk-assessment framework covering physical and transitional risks.
Portfolio restructuring
We worked with an oil and gas company to restructure its portfolio, which included shifting away from oil to gas assets; developing short-cycle, lower-cost projects; and moving to cleaner fuels (such as by refining more middle distillates than gasolines).
Featured Capability
Decarbonization-Pathway Optimizer: Our digital tool helps countries or regions design decarbonized-target systems for industry sectors and quantify associated needs for capital- and operating-expenditure investment.
Featured Experts
Daniel Aminetzah
Senior PartnerNew York
Advises global agricultural and specialty chemicals companies—along with investors in the sector—on corporate strategy, M&A,...
Hauke Engel
PartnerNairobi
Partner in McKinsey's Sustainability Practice. Co-leads work on climate change globally and supports businesses across sectors...
Holger Harreis
Senior PartnerDüsseldorf
Helps organizations implement transformation rapidly, with groundbreaking levels of adoption and impact
Kimberly Henderson
PartnerWashington DC
Supports companies, investors, and public and social sector entities to address climate change
Sean Kane
PartnerSouthern California
Advises on climate, sustainability, and environmental, social, and governance topics; helps investors and high-growth sustainable...
Mekala Krishnan
McKinsey Global Institute PartnerBoston
Leads the McKinsey Global Institute’s research on topics related to sustainable and inclusive growth, including climate risk...
Cindy Levy
Senior PartnerLondon
Helps global financial firms on multiyear agendas related to strategy, transactions, organization, and risk governance and culture...
Rob Palter
Senior PartnerToronto
Specializes in helping clients identify real estate investment opportunities and strategically manage real estate assets
Hamid Samandari
Senior PartnerNew York
Cofounder and senior leader of the global Risk & Resilience Practice and Chair of the firm’s Knowledge Council, who leads our...
Olivia White
McKinsey Global Institute Director and Senior PartnerBay Area
Leads research on global economic, business, and tech trends and brings deep expertise in strategy, risk management, and operational...
Lola Woetzel
McKinsey Global Institute Director and Senior PartnerShanghai
Leads research on China, Asia, and global economic and business trends, helps cities and regions create sustainable growth, and...