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.
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
PartnerKuala 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
PartnerLondon
Advises industrial companies across energy, resources, and infrastructure on transformation with a particular focus on the energy transition
Rory Clune
PartnerBoston
Brings broad experience in strategic and operational topics to companies across the energy value chain, along with deep expertise in decarbonizing energy systems
Emma Parry
PartnerLondon
Leader of the Strategy & Corporate Finance Practice in the United Kingdom; helps public- and private-sector clients set sustainable strategies and modernize organizations
Robin Nuttall
PartnerLondon
Robin is a global leader in McKinsey’s ESG and Regulatory service line, and serves clients on these topics across a range of sector
Lucy Pérez
Senior PartnerBoston
Advises pharmaceutical, biotechnology, medical-product companies, and healthcare providers in addressing strategic, organizational, and operational challenges
Marco Piccitto
Managing Partner, Mediterranean office and McKinsey Global Institute Council ChairMilan
Leads our Mediterranean office and global research. He advises leading European financial and industrial institutions on a broad range of topics, including business strategy, transformations, risk management, sustainability, and artificial intelligence
Werner Rehm
PartnerNew Jersey
Works at the intersection of strategy and finance with high tech, industrial, and pharmaceutical clients to identify and prioritize corporate strategies for the energy transition, performance improvement, and growth
Featured insights
Article - McKinsey Quarterly
How to make ESG real
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While ESG is likely to evolve both in substance and name in the coming years, its underlying impulse is here to stay. Here’s...
Article - McKinsey Quarterly
Does ESG really matter—and why?
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Although valid questions have been raised about ESG, the need for companies to understand and address their externalities is...
Podcast
Solving the net-zero equation in the United States
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Achieving net-zero carbon emissions will require investment and action on a massive scale. How can the United States meet the...
Article - McKinsey Quarterly
Playing offense to create value in the net-zero transition
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Decarbonization will reshape the economy, opening new markets and imperiling others. Now is the moment for companies to spot...
Podcast
Emphasizing the S in ESG
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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
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Growth for all, growth for good. Here, we offer a proposal for business, government, and society leaders.
Article
Women in the Workplace 2022
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Women leaders are switching jobs at the highest rates we’ve ever seen, and ambitious young women are prepared to do the...
Article
Buying into a more sustainable value chain
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Two-thirds of the average company’s environment, social, and governance footprint lies with suppliers. Procurement leaders...
Article - McKinsey Quarterly
‘Great Attrition’ or ‘Great Attraction’? The choice is yours
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A record number of employees are quitting or thinking about doing so. Organizations that take the time to learn why—and act thoughtfully—will...
Article
Organizing for sustainability success: Where, and how, leaders can start
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As sustainability becomes more of a strategic and operational imperative, executives must lead the way to set up a sustainability...
Article
Help your employees find purpose—or watch them leave
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Employees expect their jobs to bring a significant sense of purpose to their lives. Employers need to help meet this need, or...
Article - McKinsey Quarterly
Purpose, not platitudes: A personal challenge for top executives
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To harness the power of corporate purpose, CEOs and other senior executives must pressure-test that purpose with their teams,...
Article
The board’s role in embedding corporate purpose: Five actions directors can take today
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A large spotlight is shining on corporate actions these days, and all stakeholders have growing expectations. A board’s...
Article - McKinsey Quarterly
More than a mission statement: How the 5Ps embed purpose to deliver value
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Your company’s purpose strengthens resilience and creates value—if it’s genuine. A new framework highlights...
Article
Investors remind business leaders: Governance matters
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Activists continue to poke holes in corporate performance and returns, but they are having their greatest success with governance...
Article - Milken Institute review
It's time to build 21st century companies: Learning to thrive in a radically different world
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The great forces of technology and globalization continue to open new markets and forge the potential for new business models,...
Survey
The ESG premium: New perspectives on value and performance
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In a new survey, executives and investment professionals largely agree that environmental, social, and governance programs create...
Article - McKinsey Quarterly
Five ways that ESG creates value
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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
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More institutional investors recognize environmental, social, and governance factors as drivers of value. The key to investing...