15 November 2023
Sources have reported that U.S.-based consultancy McKinsey & Company is using its position as a key advisor to COP28 to push the interests of its oil and gas clients. Report by ILM.
Multiple sources and leaked documents reveal that the future energy scenarios the firm has proposed to the summit are at odds with its climate goals, according to an investigation by AFP.
McKinsey & Company is a management consultancy, with clients including ExxonMobil and Aramco, and is offering free advice to COP28 host the United Arab Emirates ahead of the summit.
In one example, McKinsey & Company proposed reducing oil usage by just 50% by 2050, allowing for trillions of U.S. dollars of continued investments in “high-emissions assets” per year.
COP28 has already been criticised for its potentially pro fossil fuel stance and because its President is Sultan Ahmed Al Jaber, CEO of the Abu Dhabi National Oil Company.
One source told AFP that the consultancy firm is “vocally and brazenly calling for lower levels of ambition on oil phase-out at the highest levels within the COP28 presidency”, while another reported that “it was very clear from an early stage that McKinsey had a conflict of interest. They would give advice at the highest levels that was not in the best interest of the COP president as the leader of a multilateral climate agreement, but in the best interest of the COP president as the CEO of one of the region’s biggest oil and gas companies”.
Confidential documents seen by AFP and analysed by experts reportedly back up this narrative. One expert, Kingsmill Bond, said that McKinsey & Company’s energy scenario “reads as if it was written by the oil industry for the oil industry”.
However, a COP28 spokesperson told AFP that “McKinsey supports COP28 through providing insights and analysis on a pro bono basis”, adding that the firm presenting scenarios that are incompatible with global climate targets “is just incorrect”.
The McKinsey scenario proposed that 40-50 MMb/d (millions of barrels per day) of oil are expected to be used in 2050, compared to 100 MMb/d today. However, this would be double the amount allowed by the International Energy Agency (IEA) net zero roadmap.
It also says that US$2.7 trillion will need to be invested into “high-emissions assets” up to 2050, including oil and gas as well as heavy industry and agriculture.
One former McKinsey consultant told AFP that the consultancy firm is “capable of doing good work helping clients navigate the energy transition, but that work pales in comparison to what it is doing for oil and gas”.
He continued: “They serve the world’s largest polluters. The firm is best understood as possibly the most powerful oil and gas consulting firm on the planet posturing as a sustainability firm, advising polluting clients on any opportunity to preserve the status quo.”