McKinsey Sustainable Materials Hub Driving Decarbonisation

Professional services multinational McKinsey is helping ease the sustainability pressure on construction companies with an initiative that helps them source sustainable materials.

McKinsey's Sustainable Materials Hub is a specialised resource centre within its sustainability practice, and is helping organisations work towards carbon reduction targets by helping them produce and source low-carbon materials.

The Hub operates on two fronts: it supports materials producers to decarbonise operations by embracing circularity and sustainability innovation. It also helps materials purchasers procure sustainable supplies, as well as offering insight and support in sustainable product design.

The Sustainable Materials Hub offers in-depth insights on supply, demand, and low-carbon premiums for a wide range of commodities, with a particular focus on high-impact sectors such as metals, cement, batteries, and glass.

And assisting materials purchasers in value-chain decarbonisation and procurement excellence, it focuses on securing sustainable supply and redesigning products for sustainability.

McKinsey has worked across industry associations and partnerships to master the challenge of sustainable materials, with groups including Materials Economics, Vivid Economics and Mission Possible Partnership.

Why is McKinsey Sustainable Materials Hub needed?

In an era of urgent climate action, the global construction industry faces unprecedented challenges in sourcing and utilising sustainable materials and McKinsey & Company's Sustainable Materials Hub emerges as a pivotal force in addressing these complexities. 

The Sustainable Materials Hub, a specialised resource centre within McKinsey's sustainability practice, is poised to play a pivotal role in helping organisations achieve their carbon reduction commitments through the production and sourcing of low-carbon materials.

Launched to tackle the 20% of global greenhouse gas emissions attributed to materials industries, the hub aims to revolutionise how sectors like construction approach decarbonisation. 

The Sustainable Materials Hub is a comprehensive platform that brings together McKinsey's extensive expertise across the entire materials value chain. 

Offering in-depth insights on supply, demand, and low-carbon premiums for a wide range of commodities, with a particular focus on high-impact sectors such as metals, cement, batteries, and glass.

With materials giants such as LafargeHolcim and ArcelorMittal striving to meet ambitious climate targets, the hub's cross-value chain expertise promises to bridge the gap between sustainable material production and demand, offering a beacon of hope for an industry under pressure to transform.

Sustainable construction: challenges & opportunities

Materials industries account for approximately 20% of global greenhouse gas emissions, presenting both a significant challenge and an opportunity for decarbonisation. 

With ambitious climate targets aiming for net-zero emissions by 2050, materials players have a mere three decades to transform a manufacturing and energy landscape that took over a century to evolve.

The hub's work is particularly relevant to the construction sector, as construction directly impacts around 40% of greenhouse gas emissions and indirectly contributes to 25% of global carbon emissions.

Ruth Heuss, a Senior Partner at McKinsey, notes: "The construction industry is at a critical juncture. Our hub is working to help construction firms overcome sourcing barriers for sustainable materials and technologies, which is crucial for the sector's transformation."

Goals on low-carbon construction materials

Since its launch, the Sustainable Materials Hub has made significant strides.

It has developed comprehensive analyses on emerging green premiums for key commodities, facilitated cross-value chain collaborations to accelerate decarbonisation efforts and provided strategic insights to help materials players capture economic benefits and secure supplies of low-CO2 products.

Looking ahead, the hub aims to become the preeminent partner in achieving impact across key sustainability topics and scale critical technologies through the McKinsey Platform for Climate Technologies.

And more broadly, it aims to expand its global network of sustainability and climate experts and continue developing thought leadership on climate and energy transition insights.

Impact of McKinsey Sustainable Materials Hub

The Sustainable Materials Hub is not just about reducing emissions; it's about reshaping entire industries. 

By providing strategic insights, fostering collaboration, and offering expertise, McKinsey's initiative seeks to accelerate the transition towards sustainable materials production and sourcing across sectors.

Tomas Nauclér, a Senior Partner and global leader of McKinsey Sustainability, summarises the hub's mission: "Our goal is to empower organisations to tackle the sustainable materials challenge effectively. We recognise the urgency of transforming the manufacturing and energy landscape to meet ambitious climate targets, and we're committed to driving this change."

Anna-Christina Fredershausen, an Associate Partner at McKinsey, emphasises the hub's unique approach: "Most players will have to find ways to work across the value chain. They can't do this in a silo and get where they want to go. That's why in the new hub we've organised ourselves the way we have."

Eric Hannon, a Partner at McKinsey, highlights the urgency: "Industry leaders are under immense pressure. Transforming the materials sector is not just about reducing emissions; it's about reimagining entire value chains and business models."

As the world grapples with the pressing need for sustainable solutions, McKinsey's Sustainable Materials Hub stands at the forefront of the materials decarbonisation movement. By bridging the gap between ambition and action, it is helping to shape a more sustainable future for industries worldwide.
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