‘Capitalism Incarnate’: McKinsey’s Secret Fossil Fuel Empire
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Summary
What This Article Is About
The Centre for Climate Reporting (CCR) and Guardian investigation reveals McKinsey & Company’s extensive fossil fuel client work despite public promises to be the “largest private-sector catalyst for decarbonisation.” While advising Saudi Arabia’s Neom green city project (5% of UAE revenue in 2023), McKinsey simultaneously works with Saudi Aramco (world’s biggest oil company by output, 1-5% of UAE revenue), whose CEO calls oil phase-out a “fantasy.” Documents show McKinsey quietly advised on the Saudi government’s oil sustainability program—marketed as sustainable development but designed to keep poorer nations hooked on Saudi oil, with ideas including building African airports to boost fuel demand and fast-tracking supersonic travel consuming three times normal jet fuel. Analysis of US bankruptcy court filings (compiled with non-profit Aria and Data Desk) reveals thousands of previously unknown client connections: almost two-thirds of the 57 fossil fuel producers responsible for 80% of global CO2 since Paris 2016 appear among McKinsey entities, including operators of world’s largest open pit coalmines, Canada’s oil sands exploiters, and Koch Industries (accused of funding climate denial networks).
The firm’s 45,000 employees across 65 countries generated $16bn revenue in 2024 (a record) while managing partner Bob Sternfels argues working with high emitters is necessary: “Companies can’t go from brown to green without getting a little dirty.” But internal tensions emerged—a 2021 memo to senior leaders criticized coal work as “complicit in harms,” while an internal letter signed by 1,100+ employees warned “our positive impact in other realms will mean nothing if we do not act as our clients alter the earth irrevocably.” Former consultants describe McKinsey as “capitalism incarnate,” with one saying senior figures justify damaging work claiming “If we don’t do it, a competitor will.” The firm has worked with state-linked ventures in 19 countries including five of top 10 oil producers; two Chinese state-owned oil firms despite Sternfels telling Congress McKinsey does “no work” for China’s central government; and has hired petroleum engineers dedicated to making old emissions-intensive oilfields more profitable. In India, McKinsey released 2022 net-zero reports recommending limiting refining capacity, yet privately won contracts to expand Numaligarh refinery threefold and develop gas infrastructure aligning with Modi’s vision of “gas-based economy” increasing gas from 6% to 15% by 2030. Major fossil fuel clients like Shell and BP have reportedly slowed clean energy investments between 2019-2023 despite McKinsey’s advisory work. While the firm claims rigorous client selection processes judge reputational risk, these remain hidden from public scrutiny—and McKinsey was still bidding on Oil India’s $1.5m “2040 strategy” contract targeting “enhanced domestic exploration and production” as recently as last year.
Key Points
Main Takeaways
Dual Advisory on Saudi Projects
McKinsey advises both Saudi Arabia’s Neom renewable energy city (5% UAE revenue 2023) and Saudi Aramco (1-5% UAE revenue), whose CEO calls oil phase-out “fantasy”—epitomizing contradiction between green promises and fossil fuel work.
Secret Oil Sustainability Program Work
McKinsey advised on Saudi government’s program to keep poorer nations hooked on oil through African airport construction, cheap cars for emerging markets, supersonic travel consuming triple fuel—marketed as sustainable development, actually revenue protection.
Bankruptcy Court Revelations
US bankruptcy filing analysis reveals thousands of previously unknown client connections—almost two-thirds of 57 fossil fuel producers responsible for 80% global CO2 since Paris 2016, including Koch Industries, Shell, BP, TotalEnergies, Chinese state firms.
Internal Dissent and Contradictions
1,100+ employees signed 2021 internal letter warning client emissions undermine firm’s positive impact; 2021 memo criticized coal work as “complicit in harms”; former consultants describe firm as “capitalism incarnate” going where money is.
India’s Contradictory Engagement
McKinsey’s 2022 India net-zero report recommended limiting refining capacity, yet firm won contracts expanding Numaligarh refinery threefold and developing gas infrastructure for Modi’s “gas-based economy” vision increasing gas from 6% to 15% by 2030.
Clients Retreat from Renewables
Major McKinsey fossil fuel clients Shell and BP reportedly slowed clean energy investments 2019-2023—Shell’s renewables division dropping from $3.5bn (2022) to $2.7bn (2023), BP ditching 2030 oil/gas production cut target despite decarbonization advisory.
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Article Analysis
Breaking Down the Elements
Main Idea
Systematic Corporate Climate Hypocrisy Through Elite Consulting
Investigation argues McKinsey exemplifies systematic corporate climate hypocrisy—publicly promising to be “largest private-sector catalyst for decarbonisation” while profitably enabling fossil fuel expansion through secretive advisory. Contradictions operate at multiple levels: advising both Saudi Neom renewable project and Aramco simultaneously, releasing India net-zero reports while expanding refineries threefold, advocating decarbonization while designing programs keeping developing nations oil-dependent. These reveal structural features—NDAs maintain secrecy, bankruptcy filings expose vast client networks (almost two-thirds of producers responsible for 80% CO2 since Paris 2016), internal dissent fails altering practices because decision-makers prioritize revenue over climate impact.
Purpose
Investigative Exposure of Hidden Climate Obstruction
CCR and Guardian expose mechanisms by which elite consultancies obstruct climate action while profiting from sustainability rhetoric, using McKinsey as case study revealing broader patterns. Purpose is simultaneously revelatory (making visible what secrecy hides), accountability-oriented (naming contradictions and client relationships), and systemic (demonstrating corporate architecture enabling obstruction). Deploys unusual sourcing—bankruptcy filings, undercover reporting, internal memos, anonymous testimony—overcoming structural opacity. Targets multiple audiences: activists seeking accountability leverage, policymakers considering regulation, employees experiencing cognitive dissonance, researchers studying corporate climate obstruction. Rejects Sternfels’s justification that working with emitters enables transition.
Structure
Dramatic Opening → Systemic Revelation → Cases → Dissent → Conclusion
Opens with vivid imagery—Saudi Neom’s “two giant, mirrored walls” rising from desert—before pivoting to contradiction: McKinsey advises this green project while helping “keep its oil industry afloat.” Moves to systemic revelation using bankruptcy filings exposing vast client networks, establishing scope before deploying specific case studies: Saudi oil sustainability program (undercover reporting), India contradictions (net-zero reports versus refinery expansion), China work (congressional testimony versus evidence). Pivots to internal perspective—1,100+ employee letter, coal memo, “capitalism incarnate” testimony—providing insider validation while demonstrating how dissent fails altering business model. Conclusion returns to accountability framing with activist demands, concluding with Oil India example demonstrating continued fossil fuel advisory despite promises.
Tone
Investigative Exposure Balancing Evidence and Moral Judgment
Maintains prosecutorial tone throughout—accumulating hypocrisy evidence while letting contradictions speak before rendering moral judgments through activist and expert voices. Employs precise, documented language describing client relationships, avoiding speculation while building damning patterns through accumulation. Becomes more critical describing specific programs—calling oil sustainability work “secretive,” noting it “aims to keep poorer nations hooked.” Tone shifts incorporating outside voices: Jackson calling client list “unconscionable,” Sabido saying McKinsey “turning huge profits at expense of climate.” Treats spokesperson responses with professional skepticism—quoting defenses fully before countering with contradictory evidence. Former consultant quotes like “capitalism incarnate” validate external critique while revealing internal culture prioritizing profit.
Key Terms
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To reduce or eliminate carbon dioxide emissions from systems, processes, or economies; the transformation toward lower carbon intensity in energy, transportation, and industry to mitigate climate change.
“McKinsey has repeatedly promised to become ‘the largest private-sector catalyst for decarbonisation’… Sternfels has said working with high-emitting clients is necessary to help them decarbonise.”
A nation whose economy is heavily dependent on petroleum exports; a state deriving large portions of government revenues and economic activity from oil and gas production and sales.
“Perhaps a harbinger for the end of oil, it will supposedly put the powerful petrostate at the forefront of the energy transition.”
Involved with others in illegal or questionable activity; helping to commit wrongdoing through participation, cooperation, or silent approval despite knowledge of harmful consequences.
“The firm was ‘complicit in the harms [coal] creates’, a copy of the memo seen by the CCR stated… ‘The more [McKinsey] continues to partner closely with and profit from the very actors condemning people and the planet, the more complicit it becomes.'”
Not right or reasonable; shockingly unfair or unjust; going beyond what is acceptable or tolerable morally; showing no regard for conscience or ethical principles.
“‘In a year set to be the hottest on record, it is unconscionable to have a clientele list that reads as the “whodunit” of the climate crisis,’ said Rachel Rose Jackson from campaign group Corporate Accountability.”
Producing great profit or wealth; highly profitable or financially rewarding; generating substantial income, monetary gain, or economic benefit.
“But behind closed doors, it has also helped the Saudi kingdom find lucrative ways to keep its oil industry afloat… The court records also reveal the oil refining and petrochemical giant Koch Industries as another lucrative client.”
Embodied in flesh or human form; personified or given concrete form; representing the perfect or quintessential example of a quality, concept, or principle.
“McKinsey goes where the money is, former consultants told the CCR. ‘It’s capitalism incarnate,’ one said.”
Reading Comprehension
Test Your Understanding
5 questions covering different RC question types
1According to the investigation, McKinsey’s work on Saudi Arabia’s oil sustainability program explicitly prioritized climate change mitigation and renewable energy development from its inception.
2What contradiction does the investigation reveal about McKinsey’s work in India?
3Which sentence best captures why bankruptcy court filings revealed unprecedented information about McKinsey’s client work?
4Evaluate these statements about McKinsey’s relationship with major fossil fuel clients:
Almost two-thirds of the 57 fossil fuel producers responsible for 80% of global CO2 emissions since the 2016 Paris agreement appear among entities connected to McKinsey in bankruptcy disclosures.
Bob Sternfels’s congressional testimony about McKinsey doing no work for China’s central government was fully confirmed by the bankruptcy court filings analysis.
Between 2019 and 2023, some of McKinsey’s major fossil fuel clients like Shell and BP reportedly slowed their investments in clean energy despite the firm’s decarbonization advisory work.
Select True or False for all three statements, then click “Check Answers”
5What can be inferred about why the investigation characterizes McKinsey as “capitalism incarnate” rather than simply describing it as a profitable consulting firm?
FAQ
Frequently Asked Questions
When McKinsey represents clients in bankruptcy proceedings since 2019, it must submit conflict of interest declarations to courts. The process involves receiving lists of “interested parties” in cases, examining their corporate affiliates (subsidiaries, holding companies, joint ventures—sometimes generating lists with several thousand names), then comparing these to McKinsey’s client list and disclosing matches as “clients in matters unrelated to the debtor.” While this serves different purposes than revealing McKinsey’s work scope, it offers unprecedented glimpses into the “secretive world” normally protected by NDAs. The CCR and Aria analyzed entities McKinsey itself identified as “clients,” revealing thousands of previously unknown connections including almost two-thirds of the 57 producers responsible for 80% global CO2 since Paris 2016, demonstrating systematic fossil fuel entanglement.
While marketed as “sustainable development solution to Africa and Asia’s infrastructure problems,” the program aimed from inception to protect Saudi oil revenue through demand creation. Ideas included building airports in Africa explicitly to boost fuel needs—”It costs you X million dollars and you’ve got a guarantee of however many flights, [and] you’re the guy that’s supplying the fuel oil”; working with automakers to produce cheap cars for emerging markets providing “an oil uplift for the kingdom”; and fast-tracking commercial supersonic air travel “explicitly because it consumes three times more jet fuel than normal aircraft.” Officials developed 46 “opportunities” from initial batch of 80, selected partly on oil demand boost potential. When asked if the aim was artificially stimulating demand to offset climate-driven declines, a program official confirmed: “Yes … It’s one of the main objectives.”
Despite a 2021 internal memo calling coal work “complicit in harms” and recommending suspending “client service related to the expansion or sustainment of coal energy,” and an open letter signed by 1,100+ employees warning “our positive impact in other realms will mean nothing if we do not act as our clients alter the earth irrevocably,” former consultants said these efforts “did little to move the needle.” The structural reason: decision-makers have “vested interest in the financial success of the firm” and “are making choices about a project based on multiple factors”—with “risk” being “only one of them.” Former consultants describe being told by senior figures: “If we don’t do it, a competitor will.” McKinsey’s statement that leaders “engaged with our colleagues to address their questions” suggests management response prioritized explanation over policy change, reflecting how profit imperatives override internal ethical concerns within capitalist firm structures.
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This is an Advanced-level investigative piece requiring sophisticated comprehension across multiple dimensions: tracking complex organizational relationships (McKinsey’s simultaneous advisory on contradictory Saudi projects, India net-zero reports versus refinery expansion), understanding how documentary evidence (bankruptcy filings) reveals patterns normally hidden by corporate secrecy (NDAs, client confidentiality), recognizing systematic hypocrisy rather than isolated incidents (public decarbonization promises alongside fossil fuel entrenchment enabling), synthesizing diverse evidence types (court records, undercover reporting, internal memos, anonymous testimony), and grasping how elite institutions shape climate outcomes through advisory work influencing national strategies and corporate decisions. Success requires comfort with investigative journalism methodology, ability to follow arguments about structural features of capitalism versus individual corporate bad behavior, understanding climate policy context (Paris 1.5C goals, decarbonization pathways, renewable transition), and capacity to track nested contradictions across geographic scales (Saudi, Indian, Chinese contexts) and organizational levels (individual consultants, firm management, client companies, national governments). The piece assumes reader sophistication about climate politics, corporate accountability debates, and how profit incentives structure institutional behavior.
Sternfels argues working with high emitters is necessary for their transition: “Companies can’t go from brown to green without getting a little dirty. And if that means some mud gets thrown at McKinsey, we can live with that.” He elaborates: “Like it or not, there is no way to deliver emissions reductions without working with these industries to rapidly transition,” pointing to how the firm helps “some of the biggest emitters reach net zero, such as ‘working with a global oil major to pivot its portfolio.'” McKinsey’s official statement claims: “We see no contradiction with our commitment to the energy transition. In decarbonisation scenarios consistent with Paris agreement levels, fossil fuel use is projected to decline, but will continue to be part of the energy mix.” However, this justification omits details the investigation reveals: hiring petroleum engineers to make old oilfields more profitable, advising on oil demand creation programs, enabling refinery expansions contradicting own net-zero recommendations, and clients reportedly slowing rather than accelerating clean energy investments during McKinsey advisory relationships.
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