Sustainable and inclusive growth: A weekly briefing

| Executive Briefing
Growing influence for Asia could come paired with heightened challenges. Our weekly digest of insights explores that topic and more.

McKinsey’s past insights on sustainable, inclusive growth are collected in this archive of weekly digests. Please see our new Insights to Impact page for our latest, ongoing weekly briefings.

Sustainable and inclusive growth: Briefing note #64, September 28, 2023

Today’s global disruption could see Asia emerging as an increasingly prominent player in myriad spheres. This week, a McKinsey report examines Asia on the cusp of a new era. Elsewhere, an article looks at potential applications of generative AI (gen AI) for corporate and investment banking. And an analysis outlines bold moves companies can make during the net-zero transition—even in the face of potential headwinds.

A report from the McKinsey Global Institute explores complexities that could arise for Asia as it assumes a position of strength in a new global era. Senior partners Chris Bradley, Kweilin Ellingrud, Gautam Kumra, Nick Leung, Jonathan Woetzel, and coauthors say that Asia could enjoy growing influence while also facing heightened challenges across five domains: trade (where Asia is a major player but also a center of potential tension), technology (which could shift focus beyond the areas in which Asia currently excels), demography (as aging becomes an acute issue for some Asian populations), the net-zero transition (given the region’s large industrial base and surging energy demands), and capital (where Asia’s lower returns and significant capital demands could create economic stresses).

Corporate and investment bankers were pioneers in the applied use of AI, adopting the technology decades ago. Now, say senior partner Jared Moon and coauthors, wholesale banks could benefit from using newly emerging generative AI. Gen AI’s ability to comprehend previously published documents and to create first drafts of new content could be put to use by, for instance, sorting through regulatory reports and then drafting synopses for senior officers. Among the banking contexts in which gen AI has tremendous potential: sales and marketing, risk assessment, pricing, and customer service.

As the net-zero transition unfolds, companies can play offense even amid uncertainty. With $9 trillion to $12 trillion in annual sales potentially up for grabs by 2030, the rewards could be significant. Senior partners Laura Corb, Tomas Nauclér, Daniel Pacthod, and coauthor urge companies to take six actions that will position them to succeed when conditions clarify: push ahead on value creation, integrate cost and carbon reductions, forge winning customer partnerships, update portfolios, build and scale new green businesses, and execute at digital speed.

Here are other recent notable findings from McKinsey research:

The case study collection Rewired in Action illuminates companies that have launched digital transformations to build value. Supported by technical and industry expertise from McKinsey, these organizations have changed their trajectories through the integration of digital and AI.

A recent edition of Author Talks features Stanford Graduate School of Business lecturer Matt Abrahams speaking about his new book, Think Faster, Talk Smarter: How to Speak Successfully When You’re Put on the Spot (Simon & Schuster, September 2023). Abrahams encourages nervous speakers to craft “anxiety management plans” but says there are only three proven ways to get better at communication: repetition, reflection, and feedback.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #63, September 21, 2023

Simultaneously addressing poverty and climate change could involve both synergies and trade-offs. Our weekly digest of insights explores that topic and more.

The dual challenge of raising global living standards while reducing global carbon emissions could create tensions most deeply felt by the Earth’s poorest populations. This week, a McKinsey report quantifies the resources that might be required to close economic empowerment gaps while also setting the world on a path to net zero. Elsewhere, a survey reveals that investors are demanding more clarity regarding companies’ environmental, social, and governance (ESG)–related efforts. And an interview with Walmart’s chief sustainability officer looks at the retailer’s quest to become “regenerative.”

A report from the McKinsey Global Institute examines the potential for accelerated economic growth to simultaneously raise the world’s living standards and limit global warming. These twin goals are intertwined in complex ways: newly empowered populations might increasingly demand more emissions-intensive products and services, but these populations are also often most vulnerable to climate-related risks. McKinsey analysis suggests that the combined investment to close both empowerment and net-zero gaps could amount to 8 percent of global GDP annually over the next decade. Senior partners Kweilin Ellingrud, Tracy Francis, Sven Smit, Jonathan Woetzel, and coauthors say that businesses and the market economy could be capable of generating half these required resources through growth and innovation. The full report can be downloaded from McKinsey.com.

A recent McKinsey survey finds that chief investment officers are seeking more detail on how companies’ ESG efforts link to their cash flow results. A significant majority of respondents say they are willing to pay a premium when companies can demonstrate that ESG programs relate to financial performance. But these investors indicate that clearer ESG standards—and sharper methods for measuring ESG’s long-term value—would help them make more informed decisions. Partners Jay Gelb, Werner Rehm, and coauthors posit that the general lack of clarity could present an opportunity for companies to make the link between ESG and value more explicit.

In 2020, Walmart committed to becoming a “regenerative company.” Walmart’s chief sustainability officer, Kathleen McLaughlin, says this term encapsulates the company’s ambitions to have net-positive impacts on people and the planet. Speaking with Tony Hansen, McKinsey’s director of natural capital and nature, McLaughlin relates that Walmart’s self-conception was shaped by the role it played in the wake of Hurricane Katrina in 2005, when the world’s largest retailer found itself providing aid to stricken communities.

Here are other recent notable findings from McKinsey research:

  • Generative AI’s effect on organizations is rapidly growing and evolving. Senior partners Dana Maor, Alexander Sukharevsky, and coauthors say organizational leaders shouldn’t underestimate the broad potential applications of gen AI. It’s also vital that leaders strive to demystify the technology for employees.
  • While gen-AI-powered chatbots are playing increasing roles in companies’ customer service operations, partner Julian Raabe and coauthors say that phone calls (even when not conducted with live agents) remain many customers’ preferred form of interaction. The global market for automated, interactive voice response systems is expected to reach $9.2 billion by 2030, up from about $4.9 billion in 2022.
  • The Singapore-based company Mlion, a major steel supplier, launched an online B2B marketplace for used steel even though it could disrupt the company’s core business. Mlion chairman and CEO Eric Leong explains, in a new episode of The Venture podcast, why he made the decision.

A recent edition of Author Talks features Brunswick Group partner Lucy Parker speaking about her new book, The Activist Leader: A New Mindset for Doing Business (HarperCollins, September 2023), coauthored by Jon Miller. Parker says leaders who can combine pragmatism with idealism can “change the game”—while future-proofing their organizations.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #62, September 14, 2023

An expert in Europe’s energy transition talks about the challenges and opportunities ahead. Our weekly digest of insights explores that topic and more.

“Climate action has always been plagued by a collective action problem,” says Ann Mettler, vice president, Europe, at Breakthrough Energy. “Those that moved ahead the fastest thought that if others don’t pull along, that it is too much of a risk.” But that’s changing, Mettler tells the McKinsey Global Institute in a new episode of the Forward Thinking podcast with partner Michael Chui and cohost Janet Bush.

Europe has been ahead of the curve when it comes to new technologies to combat climate change. The problem, she notes, is that Europe lacks an innovation ecosystem that can deploy technologies at scale. Technological speed, scale, and simplicity are crucial for Europe to maintain momentum in its energy transition.

Brand owners continue to introduce new packaging formats and establish innovative ways to boost product recyclability and levels of recycled content. But high long-term demand for recycled content could lead to shortages of recycled packaging materials. Senior partners David Feber, Yasir Mirza, and coauthors offer three approaches that can boost supply, ensure access, and design for circularity.

Companies may be hampered in pursuing a sustainable and inclusive growth strategy if their workforces aren’t along for the ride. In new research that focuses on the perils of employee disengagement, McKinsey senior partner Aaron De Smet, partner Angelika Reich, and team look at the implications of worker attrition and disengagement on performance and productivity levels, as well as on costs for organizations as they emerge from the challenges of the pandemic and the Great Attrition.

Here are other recent notable findings from McKinsey research:

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Barbara Tierney, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #61, September 7, 2023

Net-zero flying, sustainable agriculture, growth-fueling technological advances, and urban real estate transformations: our weekly digest offers those topics and more in this best-of-summer SIG roundup.

The aviation industry has committed to achieving net-zero flying by 2050. It will be a challenging process, but there are useful steps the sector can take now. McKinsey partners Axel Esqué, Robin Riedel, Daniel Riefer, and coauthors examine how using a marginal abatement cost curve (MACC) can help aviation players evaluate the costs and effects of various decarbonization actions. They write that a typical airline MACC might look at operational steps (such as creating incentives for pilots to fly and taxi more fuel efficiently), fleet issues (updating fleets too soon could mean missing out on the greener potential of next-generation aircraft), and fuel choices (the pathway to scaling advanced biofuels remains uncertain). Incorporating MACCs into business planning cycles now can help shorten the significant lead time associated with some decarbonization investments.

Changes along the agricultural value chain—including reductions in food waste, shifts in the global diet, and initiatives to conserve and reforest land—can play an important role in meeting the world’s decarbonization goals. But farms can also alter their own practices to reduce emissions. Partners Vasanth Ganesan, Joshua Katz,  Peter Mannion, Pradeep Prabhala, and coauthors identify 28 measures that could help farms decarbonize, including electrifying on-farm machinery, converting from flood to drip or sprinkler irrigation, and using advanced feed additives.

Technology’s role in propelling sustainable, inclusive growth and solving complex global challenges is becoming even more crucial. Climate technologies—including carbon capture, utilization, and storage, as well as carbon removals and circular technologies—are just one area that is experiencing rapid innovation and investment. In McKinsey’s Technology Trends Outlook 2023 report, senior partner Lareina Yee and colleagues analyze the most significant trends unfolding today—and how companies can adopt and scale these technologies using a balanced and portfolio-oriented investment approach.

Urban real estate continues to face substantial challenges arising from hybrid working, suburbanization, and the increase in online shopping. According to research by the McKinsey Global Institute, demand for office space in a median city could be 13 percent lower in 2030 compared with 2019. In a more heavily affected city, the decline could be as much as 38 percent. These challenges provide an opportunity to spur a historic transformation of urban spaces. Senior partners André Dua, Rob Palter, Aditya Sanghvi, Sven Smit, Olivia White, Jonathan Woetzel, and coauthors examine how cities and buildings can take a hybrid approach, including developing mixed-use neighborhoods and energy-efficient multifamily housing in suburban areas, as well as constructing more adaptable buildings.

Here are other notable findings from SIG briefings this summer:

And, finally, it’s not too late to indulge in an annual reading rite: in McKinsey’s 2023 summer reading guide, leaders around the world—including CEOs, founders, and editors—share the books they are reading, or planning to read, in genres including politics, history, innovation, business, workplace culture, and more. Also check out McKinsey’s Author Talks, a series of interviews with authors of books on business and beyond.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Barbara Tierney, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #60, August 31, 2023

Economic growth can address both poverty and climate change, even when there are trade-offs involved. Our weekly digest of insights explores that topic and more.

Accelerated global growth can further the two defining societal aspirations of our era: raising minimum living standards and limiting global warming. Our new research looks at how to accomplish both goals while minimizing the tensions between the two. Rapid increases in living standards could raise demand for energy- and emissions-intensive products and services. At the same time, not acting to curb temperature rise could harm economies, and the poorest populations are most heavily exposed to physical risks.

New research from the McKinsey Global Institute (MGI) quantifies what it would take to close the gaps in empowerment—the level at which people can afford to meet essential needs—and increase net-zero investment to 8 percent of global GDP annually over the next decade. As senior partners , Tracy Francis, Sven Smit, Jonathan Woetzel, and coauthors note, businesses and the market economy can generate half the combined resources through growth and innovation.

The performance by G20 economies shows the central role that growth, technology, and finance can play in closing the empowerment gap and boosting net-zero investment. In a companion piece to the MGI report, senior partners Rajat Dhawan, Amit Khera, and team examine what it would take for G20 economies to progress toward these goals. The authors focus on the promise of new healthcare opportunities, clean technologies and manufacturing, and modern construction methods to make housing and mass transit greener and more resilient.

The past two decades were kind to wealth accumulation but challenging for growth and equality. While the majority of executives today have lived most of their professional lives in this environment, the future could be quite different. The range of plausible medium-term scenarios today is unusually broad. McKinsey authors Michael Birshan, Jan Mischke, and Olivia White consider four plausible scenarios for how global economics might unfold in the next decade, ranging from a return to weak investment and a savings glut to productivity acceleration. They also suggest steps business leaders can consider to plan a sound strategy for whichever scenario prevails.

Here are other recent notable findings from McKinsey research:

  • The automotive industry has been a key contributor to Europe’s economic growth, innovation, and prosperity, accounting for almost 7 percent of the region’s GDP. However, the sector faces huge transformations, such as shifts from internal-combustion engines to electrified powertrains and from hardware to differentiation through software. Senior partners Andreas Cornet, Ruth Heuss, Andreas Tschiesner, and their coauthor offer seven areas where automakers can focus to remain competitive, including creating resilient and sustainable supply chains and scaling European battery players.
  • McKinsey research has found that generative AI (gen AI) features stand to add up to $4.4 trillion to the global economy annually. Here’s an early view of gen AI’s promise in 15 charts.
  • The newest McKinsey Explainer offers a primer on the Conference of the Parties (COP)—the United Nations’ annual conference on climate change. Its 28th meeting (COP28) is scheduled to begin November 30, 2023, in Dubai, United Arab Emirates. This year’s event will feature the first “global stocktake,” which will provide a comprehensive assessment of progress since the Paris Agreement in 2015. The objective is to align efforts on climate action, including measures to bridge the gaps in progress.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Barbara Tierney, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #59, August 17, 2023

There are speed bumps in the European Union’s orderly energy transition journey, making it imperative for member states to take transformative collaborative action. Our weekly digest of insights explores those topics and more.

The European Union’s exposure to Russian energy, among other economic headwinds, is challenging its ambitious and orderly pace of energy transition. A less orderly transition—resulting from, among other factors, a lack of coordinated interventions among EU member states—could raise the cost of energy for households and businesses in coming decades. This week, McKinsey analyzes how the European Union can increase the speed and scale of its transition. Elsewhere, a separate article examines how outperforming organizations manage to grow profitably while advancing environmental, social, and governance (ESG) priorities.

Europe’s energy transition goals have encountered several challenges since 2021. The Russian invasion of Ukraine, supply chain disruptions, and high inflation have created energy security and affordability issues, especially among member states that are net importers of oil and gas. As a result, the European Union now needs to triple its pace of renewable-energy-source deployment to avoid a less orderly energy transition, which would be far more costly and damaging to the economy and the environment than one that balances affordability, reliability, resilience, and security. McKinsey senior partners Lorenzo Moavero Milanesi, Hamid Samandari, Humayun Tai, and coauthors recommend five action areas to help EU nations fulfill their net-zero agenda.

Some leaders believe that achieving sustainable and inclusive growth often means forgoing revenue and profit. New McKinsey research has found that such trade-offs are not always a given. Companies that achieve better growth and profitability than their peers while improving sustainability and ESG also end up outgrowing their peers and exceeding them in shareholder returns. McKinsey senior partner Lucy Pérez and colleagues examine the key principles embodied by such outperformers who successfully deliver this growth trifecta.

Here are other recent notable findings from McKinsey research:

In the latest Author Talks, Siddarth Shrikanth talks about his new book, The Case for Nature: Pioneering Solutions for the Other Planetary Crisis (Duckworth Books Ltd., May 2023), in which he makes both an economic as well as a spiritual case for investing in nature.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Arshiya Khullar, an editor in McKinsey’s Gurugram office.




Sustainable and inclusive growth: Briefing note #58, August 10, 2023

Consumer attitudes toward electric vehicles are changing fast—and the automotive retail industry must innovate to keep up. Our weekly digest of insights explores this topic and more.

Electric vehicles (EVs) are growing in popularity among car buyers, but these consumers are also becoming more discerning. They expect a far more personalized, flexible, innovative, and transparent purchasing experience, compared with traditional car buyers. This week, McKinsey analyzes the changing preferences of today’s EV buyer—and what it means for automotive retailers. Elsewhere, a separate article explores the development of methane-reducing feed supplements and other decarbonization technologies in agriculture.

Changing consumer sentiment toward electrification is shaking up the automotive retail industry. As the general skepticism about EVs declines, an increasing number of people are considering buying battery electric and plug-in hybrid electric vehicles, according to McKinsey’s latest Future of Auto Retail consumer survey. Consumers’ expectations for these vehicles are evolving, too, with a deeper focus on innovation and convenience. McKinsey partner Thomas Furcher and coauthors analyze the trends and current pain points in the EV-buying process.

As the agriculture industry advances on its sustainability and decarbonization goals, new products to reduce methane emissions are seeing early adoption across some countries. One such product is Bovaer, a feed additive that has saved approximately 40,000 metric tons of CO2 equivalent over the past eight months, according to Mark van Nieuwland, the company’s vice president. McKinsey partner Joshua Katz speaks with van Nieuwland about the agriculture industry’s methane emissions pledges—and the new decarbonization opportunities on the horizon.

Here are other recent notable findings from McKinsey research:

In the latest Author Talks, Zeynep Ton, professor of the Practice at the MIT Sloan School of Management and president and cofounder of the Good Jobs Institute, discusses her new book The Case for Good Jobs: How Great Companies Bring Dignity, Pay, and Meaning to Everyone’s Work (Harvard Business Review Press, June 2023). The author examines how targeted job strategies can improve performance, productivity, and profit.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Arshiya Khullar, an editor in McKinsey’s Gurugram office.




Sustainable and inclusive growth: Briefing note #57, August 3, 2023

Changes in how we live, work, and travel are going to fundamentally reshape certain industries over the next decade. Our weekly digest of insights explores that topic and more.

The US job market continues to face disruption, with labor shortages and people exiting shrinking occupations. According to estimates from the McKinsey Global Institute (MGI), about 3.5 million jobs risk being displaced due to the net-zero transition. At the same time, increased federal investment into areas like renewable energy, for example, could create 4.2 million jobs in green industries, resulting in an overall net gain in employment. This week, McKinsey explores how the employment mix in the United States will change significantly by 2030. Elsewhere, a separate article looks at how sustainability considerations will shape the hotels of the future.

Labor demand in the United States is undergoing a structural shift driven by the net-zero transition, the rise in automation, and hybrid work. In its latest report on the future of work in America, MGI explores how federal investment to address climate change and infrastructure issues could bolster jobs in industries such as construction and renewable energy, effectively offsetting employment losses in oil, gas, and automotive manufacturing. The report also estimates that, due to the aging workforce, there could be demand for 3.5 million more jobs for health aides, health technicians, and wellness workers by 2030. Kweilin Ellingrud, Olivia White, and coauthors analyze ongoing occupational shifts and workforce attrition—and how employment demand will change over the long term.

Hotels are on the brink of a transformation. A hotel room in the 2030s will likely have sensors to gauge your activity and appropriately customize the temperature for more efficient energy usage. The room might also be automated to aid furniture shifting and light control. Sustainability—including the materials from which hotels are built and the way food is processed and served—will be at the core of the traveler’s experience. McKinsey senior partners Matteo Pacca, Caroline Tufft, and colleagues discuss the hotels of the future and their focus on delivering personalization, sustainability, and attractive employment opportunities.

Here are other recent notable findings from McKinsey research:

In McKinsey’s 2023 summer reading guide, leaders around the world—including CEOs, founders, and editors—share the books they are reading, or planning to read, in genres including politics, history, innovation, business, workplace culture, and more.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. The firm has formed a strategic collaboration with Cohere, the leading developer of enterprise AI platforms and state-of-the-art large language models, to help organizations integrate generative AI into their operations, redefine business processes, train and upskill workforces, and use this technology to tackle some of the toughest current challenges. Learn more about the collaboration on McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Arshiya Khullar, an editor in McKinsey’s Gurugram office.




Sustainable and inclusive growth: Briefing note #56, July 27, 2023

Several technological advances on the horizon have potential to catalyze progress in business and society. Our weekly digest of insights explores that topic and more.

Breakthroughs in bioengineering, mobility, and climate technologies could turbocharge business innovation and sustainable growth. Innovation in the cultivated-meat industry, for example, has helped to significantly lower its production costs. Estimates suggest that cultivated meat could provide 0.5 percent of the world’s meat supply by 2030. This week, McKinsey looks at the top technology trends unfolding in 2023. Elsewhere, a separate article examines how shared-mobility solutions could overtake cars as a preferred (and more efficient) mode of transportation in the future.

Technology’s role in propelling sustainable, inclusive growth and solving complex global challenges is garnering heightened attention after a sobering 2022 for the industry. In bioengineering, advancements are being made in the production of cultivated meat and in biomaterials used for the chemicals and materials market. There is also increasing interest, innovation, and investment in climate technologies, including carbon capture, utilization, and storage as well as carbon removals and circular technologies. In McKinsey’s Technology Trends Outlook 2023 report, senior partner Lareina Yee and colleagues analyze the most significant trends unfolding today—and how companies can adopt and scale these technologies using a balanced and portfolio-oriented investment approach for long-term growth.

The transportation sector will drastically transform in the coming decade, as consumers flock to shared, more sustainable and efficient modes of urban mobility. In McKinsey’s latest Mobility Consumer Pulse Survey, partner Kersten Heineke and coauthors find that a quarter of the respondents living in urban areas are thinking of replacing their private vehicles with shared-mobility solutions such as autonomous shuttles, micromobility options including e-kickscooters and e-bicycles, and minimobility alternatives. Shared-mobility offerings represent a multibillion-dollar opportunity for industry players. Moreover, they can also help address urban-mobility challenges, including traffic congestion and air pollution.

Here are other recent notable findings from McKinsey research:

In a recent edition of Author Talks, Jamie Sears, founder and CEO of Not So Wimpy Teacher, discusses her new book, How to Love Teaching Again: Work Smarter, Beat Burnout, and Watch Your Students Thrive (Portfolio/Penguin, April 2023), in which she talks about how educators can avoid burnout and better navigate the classroom as well as parent–teacher relationships.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. The firm has formed a strategic collaboration with Cohere, the leading developer of enterprise AI platforms and state-of-the-art large language models, to help organizations integrate generative AI into their operations, redefine business processes, train and upskill workforces, and use this technology to tackle some of the toughest current challenges. Learn more about the collaboration on McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Arshiya Khullar, an editor in McKinsey’s Gurugram office.




Sustainable and inclusive growth: Briefing note #55, July 20, 2023

Cities, neighborhoods, and buildings are bracing for a transformation. Our weekly digest of insights explores that topic and more.

Urban real estate continues to face substantial challenges arising from hybrid working, suburbanization, and the increase in online shopping. Vacancies in urban office and retail spaces have grown sharply since 2019, and home prices are increasing at a slower pace than in the suburbs. This week, McKinsey looks at how real estate executives can adapt, transform, and future-proof cities. Meanwhile, a separate article explores how technology leaders can guide the C-suite in turning the promise of generative AI into sustainable business value.

Real estate demand, particularly in the urban core areas of global superstar cities such as New York, London, and Beijing, has been profoundly affected by the behavioral shifts caused by the pandemic. And the biggest sufferers are neighborhoods and cities with dense office space, expensive housing, and large employers in the knowledge economy. According to research by the McKinsey Global Institute, demand for office space in a median city could be 13 percent lower in 2030 compared with 2019. In a more heavily affected city, the decline could be as much as 38 percent. These challenges provide an opportunity to spur a historic transformation of urban spaces. Senior partners André Dua, Rob Palter, Aditya Sanghvi, Sven Smit, Olivia White, Jonathan Woetzel, and coauthors examine how cities and buildings can take a hybrid approach to thrive in these times, including developing mixed-use neighborhoods and energy-efficient multifamily housing in suburban areas, as well as constructing more adaptable buildings.

Technology leaders play a critical role in capturing sustainable business value from generative AI. And the chief information officers and chief technology officers who have navigated previous technological waves know that getting past the pilot stage, reaching scale, and managing risk are key considerations involved in integrating new technologies into their businesses. Based on conversations with dozens of technology leaders and an analysis of generative-AI initiatives at more than 50 companies, senior partners Aamer Baig, Sven Blumberg, Alexander Sukharevsky, and colleagues recommend nine actions for sustainable value creation. These include establishing the company’s posture regarding generative AI, developing a financial-AI capability to estimate the true costs and returns of such technology, and reimagining the technology function in its entirety.

Here are other recent notable findings from McKinsey research:

In a recent edition of Author Talks, Claire Hughes Johnson, corporate officer and adviser at Stripe, speaking about her new book, provides a tactical guide to management and company building and explains how a human-centric approach can be used to develop talent.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Arshiya Khullar, an editor in McKinsey’s Gurugram office.




Sustainable and inclusive growth: Briefing note #54, July 13, 2023

Retailers need strategies to take on the “zero consumer” and other industry challenges. Our weekly digest of insights explores that topic and more.

A retailer’s actions in the next two to three years could position it for success in the next 20. This week, McKinsey looks at how retail executives can set a course through an industry roiled by widespread change. Meanwhile, separate articles delve into how generative-AI (gen AI) technology could help streamline routine healthcare tasks, and the steps institutional investors are taking to face a new era of instability.

Retail is a winner-take-most industry. The gap between winners and losers is widening, with the top 10 percent of publicly traded retailers now accounting for 70 percent of the industry’s profits. Staying a winner is even harder, particularly when the rules of the retail game are shifting so much. Take “zero consumers,” who shop across channels, show little loyalty, and expect sustainable products. Net zero is now a buying factor, as consumers vote with their wallets when it comes to sustainability and social responsibility. This confluence of challenges calls for a retail reset. Senior partners Becca Coggins, Franck Laizet, and coauthors recommend four areas where companies can focus, including evaluating business decisions using an environmental, social, and governance (ESG) lens.

Generative-AI technology generates both excitement and apprehension, and nowhere is that more true than in healthcare, where patient data must be handled with extreme care. Gen AI, which can automate tedious and error-prone operational work, represents a potential breakthrough when it comes to clinical notes, diagnostic images, medical charts, and recordings. Many healthcare organizations can start using gen AI by applying the technology to these administrative and operational tasks, streamlining workflows and allowing providers to focus more resources on patient care. Senior partner Damien Bruce and his team look at these emerging use cases for private payers, hospitals, and physician groups.

Institutional investors, accustomed to decades of economic stability that helped bring steady growth and strong returns, are facing a new era of uncertainty. To understand how they are responding, senior partners Sacha Ghai, Marcos Tarnowski, and colleagues interviewed senior executives at 40 of the world’s leading pension and sovereign-wealth funds. The interviews revealed that investors are looking to integrate environmental and social considerations into their investing strategies, but that they are at different stages in that journey.

Here are other recent notable findings from McKinsey research:

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Barbara Tierney, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #53, July 6, 2023

More efficient ocean voyages could help the shipping industry reduce emissions. Our weekly digest of insights explores that topic and more.

Shipping companies are eager to help reduce emissions. The industry is seeking lower-carbon fuels to power ships, but it also hopes to consume less energy by improving ships’ efficiency. This week, McKinsey speaks with an executive from a start-up that uses data-driven insights to help shipping get greener. Meanwhile, a separate article looks at strategies to create more equitable outcomes for Black, Bangladeshi, and Pakistani women in UK workplaces.

The Copenhagen-based start-up ZeroNorth uses advanced analytics to help vessels cross oceans more efficiently. The company says it helped prevent more than 440,000 tons of CO2 from being emitted by its customers’ ships last year through techniques including optimizing routing in response to weather and monitoring the performance of components such as propellers and hulls. Partner Matt Stone spoke with Pelle Sommansson, chief operating officer of ZeroNorth, about bringing AI to the maritime world, listening to insights from captains and crews, and attempting to transform an industry that is sometimes resistant to change.

In 2019, Black, Bangladeshi, and Pakistani workers in the United Kingdom earned about 15 percent less than White British workers. Black, Bangladeshi, and Pakistani women, in particular, face disadvantages on key metrics of workplace equitability. In light of the strong business case for diversity on executive teams that previous McKinsey research has identified, senior partners Tania Holt, Tunde Olanrewaju, and coauthors suggest four ways for UK workplaces to make progress on equity for Black, Bangladeshi, and Pakistani women: communicate the importance of this endeavor from the CEO down through the whole organization; collect insights through an intersectional lens; prioritize actions specifically targeted at meeting the unique needs of Black, Bangladeshi, and Pakistani women; and rigorously track and course correct efforts while celebrating success.

Here are other recent notable findings from McKinsey research:

  • Senior partner Nora Gardner and coauthors say that “win rooms” can help public-sector organizations fill their growing need for workers. Win rooms are cross-functional teams that use internal and external data to quickly attract and recruit in-demand talent.
  • In an episode of the McKinsey Global Institute’s Forward Thinking podcast, partner Michael Chui speaks with Betsey Stevenson and Justin Wolfers, both professors of public policy and economics at the University of Michigan. Among other topics, Stevenson and Wolfers address the potential impact of generative AI, the ongoing decline in income inequality, and the concept of “joyous economics.”
  • The newest McKinsey Explainer offers a primer on e-commerce—detailing how, over the past 30 years, online marketplaces have revolutionized the way we shop.

A recent edition of Author Talks features senior partners Eric Lamarre, Kate Smaje, and Rodney Zemmel speaking about their new book, Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI (Wiley, June 2023), which debuted in the third spot on the Wall Street Journal’s list of bestselling business books. The authors share details from the playbook they use to help companies undertake digital transformations.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download our entire 2022 ESG report, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #52, June 29, 2023

Farms can embrace new agricultural methods to decarbonize. Our weekly digest of insights explores that topic and more.

Agricultural land is responsible for 70 percent of the world’s freshwater withdrawals, and food systems are the world’s primary driver of biodiversity loss. Any path to a greener future will need to involve changes in how we farm. This week, a McKinsey report examines efforts to create more sustainable agriculture. Meanwhile, a separate article looks at the potential to convert petroleum refineries into renewable-fuel production centers.

Changes up and down the agricultural value chain—including reductions in food waste, shifts in the global diet, and initiatives to conserve and reforest land—could play an important role in meeting the world’s decarbonization goals. But farms can also alter their own practices to reduce emissions. Partners Vasanth Ganesan, Joshua Katz, Pradeep Prabhala, Peter Mannion, and coauthors identify 28 measures that could help farms decarbonize, including electrifying on-farm machinery, converting from flood to drip or sprinkler irrigation, and using advanced feed additives.

Refitting existing petroleum refineries can be faster and cheaper than building new facilities for renewable diesel (RD) and sustainable aviation fuel (SAF) from scratch. But not all refineries are good candidates for this switch. Partners Khush Nariman, Brian Roth, and coauthor offer a checklist for conversion decisions. Among important considerations: Is the refinery close to sources of RD and SAF feedstocks such as soybean oil and beef tallow? Will it benefit from regional policy incentives? And can the local marketplace for renewable fuels support the conversion?

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features Joanne Lipman, former editor in chief of the USA Today network, speaking about her new book, Next! The Power of Reinvention in Life and Work (Mariner Books, Spring 2023). The author explains her four-step process for self-reinvention: search for information and experiences, struggle to change, stop your old life, and find your new solution.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #51, June 22, 2023

The aviation sector will need to determine which green initiatives provide the greatest returns. Our weekly digest of insights explores that topic and more.

The aviation industry has committed to achieving net-zero flying by 2050. It will be a challenging process, but there are useful steps the sector can take now. This week, McKinsey analysis examines a method that can help aviation players assess which decarbonization actions should be prioritized. Meanwhile, a separate article investigates whether mining of metals that are critical to the energy transition can keep up with projected demand, given regulatory constraints. And a piece looks at environmental, social, and governance (ESG) strategies tailored to fit railway companies.

Aviation stakeholders can evaluate the costs and effects of various decarbonization actions by using a marginal abatement cost curve (MACC). A typical airline MACC might look at operational steps (such as creating incentives for pilots to fly and taxi more fuel efficiently), fleet issues (updating fleets too soon could mean missing out on the greener potential of next-generation aircraft), and fuel choices (the pathway to scaling advanced biofuels remains uncertain). Partners Axel Esqué, Robin Riedel, Daniel Riefer, and coauthors suggest that aviation companies should incorporate MACCs into business planning cycles now to account for the significant lead time associated with some decarbonization investments.

The energy transition will necessitate increased mining of metals such as copper, lithium, nickel, and cobalt. But regulatory hurdles (including mine permitting, which can routinely take up to ten years in some jurisdictions) often slow production. Senior partner Harry Robinson and coauthors recommend that companies, communities, and governments collaborate to make regulations consistent, streamline permitting processes, and create transparency around decisions.

Railway companies can benefit from developing holistic ESG strategies. When elements of ESG are intertwined with a railway’s business, opportunities emerge for new partnerships, new products, and additional revenue streams. Senior partner Nicola Sandri and coauthors offer a four-step plan for developing a comprehensive ESG strategy: diagnose strengths and weaknesses, define commitments, embed the strategy in the business, and report results externally.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features strategist John Horn speaking about his new book, Inside the Competitor’s Mindset (MIT Press, April 2023). The author explains the value of using cognitive empathy to help us look through our competitors’ eyes. What might seem irrational to us might make perfect sense for a competitor.

McKinsey strives to create inclusive growth through collaborations with clients and local communities. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #50, June 15, 2023

McKinsey is assessing its own efforts to foster sustainable, inclusive growth. Our weekly digest of insights explores that topic and more.

This week, McKinsey shares its annual environmental, social, and governance (ESG) report. It examines our most recent efforts to create sustainable, inclusive growth through our actions and our work with clients. Among other findings, the report assesses McKinsey’s progress toward reaching its goal of becoming the world’s largest private-sector catalyst for decarbonization. Elsewhere, a separate article examines tactics that could help the solar industry deliver capacity-adding projects more efficiently. And another piece looks at one company’s plan to encourage more companies to accept US government benefits through digital payments.

McKinsey clients have contributed 80 percent of the world’s reported reduction in CO2 emissions. McKinsey itself has donated, since 2020, about $620 million in cash and in-kind support toward social-responsibility initiatives. To learn more about our firm’s ESG-related actions and commitments, read comments from global managing partner Bob Sternfels, and download the entire document, visit McKinsey’s 2022 ESG report.

America’s Inflation Reduction Act offers funding for solar-energy projects, but various bottlenecks are hampering the quest to deliver on those projects. Among them: labor shortages in engineering and construction, limited access to land and permits, inflation, and supply chain constraints. Senior partner Humayun Tai and coauthors suggest that renewables players could rethink their delivery strategies by putting more focus on forming partnerships, revisiting the risk allocations in their contracts, developing their workforces, and adopting digital solutions.

Ofek Lavian, cofounder and CEO of the payments start-up Forage, wants to help more businesses accept online payments via government-issued electronic benefit transfer cards (what was once broadly referred to as “food stamps”). Food assistance recipients in the United States often face hurdles that make it harder for them to shop online for groceries. In a conversation with McKinsey’s Matt Cooke, Lavian recounts how he was inspired to fix this problem when the COVID-19 pandemic transformed online grocery shopping from a luxury into, for many Americans, a necessity.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features David Moinina Sengeh, chief innovation officer for the government of Sierra Leone, speaking about his new book, Radical Inclusion: Seven Simple Steps to Help You Create a More Just Workplace, Home, and World (Flatiron Books, May 2023). The author details specific actions that can help us remove barriers to inclusion—including, to start, being sure that we precisely define “exclusion.”

McKinsey strives to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #49, June 8, 2023

Short-haul air travel might be poised to take off. Our weekly digest of McKinsey insights explores that topic and more.

In 2019, air travel was the mode of choice for only about 8 percent of trips covering a distance of roughly 95 to 500 miles in the United States, and only about 4 percent of such trips in the European Union. That might change as short-haul flying becomes more convenient, affordable, and sustainable. This week, McKinsey analysis examines the rise of regional air mobility (RAM). Elsewhere, an interview with the CEO of the Global Infrastructure Hub looks at strategies for ramping up the construction of sustainable infrastructure.

Travelers often decide that shorter trips will be cheaper, easier, and quicker by car than by air. But technological innovations in the design of small aircraft, thicker congestion on roadways, the increasing salience of sustainability, and the rise of user-friendly apps that turn mobility into a service could combine to make short-haul flying more attractive. Partners Axel Esqué, Robin Riedel, and coauthors say several developments could help enable the RAM transition, including continued advances in decarbonized aircraft propulsion technology and improved infrastructure at regional airports.

The Global Infrastructure Hub is a nonprofit organization formed by the G-20. Its CEO, Marie Lam-Frendo, recently spoke with McKinsey about the quest to build more sustainable infrastructure around the world. Lam-Frendo says that public–private partnerships will be crucial in the effort to derisk infrastructure investment. She adds that infratech—which involves embedding technology into infrastructure—could cut expenses and create more efficient outcomes.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features Dr. Sheena Iyengar, a Columbia Business School professor, speaking about her new book, Think Bigger: How to Innovate (Columbia Business School Publishing, April 2023). The author offers a step-by-step methodology for inventing new solutions to existing problems.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #48, June 1, 2023

Seven specific traits might determine a company’s ability to create financial value while also achieving positive social impact. Our weekly digest of McKinsey insights explores that topic and more.

As environmental, social, and governance (ESG) issues have gained salience with consumers, investors, and regulators, companies have become motivated to examine their own efforts in these realms. This week, a McKinsey survey assesses how organizations are thinking about their ESG initiatives. Survey results suggest that companies that exhibit seven specific traits are more likely to create value while reinforcing values. Meanwhile, a second article examines approaches that could improve retention, promotion, and satisfaction rates for women working in the public sector.

The newest McKinsey Global Survey asks some 1,100 respondents across the world about their organizations’ ESG outlooks. More than nine in ten say that ESG issues are on their companies’ agendas. One-third say their organizations’ ESG-related actions have improved employee retention. Senior partners Lucy Pérez, Jérémie Sneessens, and coauthors suggest that the survey’s results point to seven organizational characteristics that can help ESG initiatives succeed. Among them: being accountable to external stakeholders, linking compensation to ESG metrics, and empowering a specific C-suite executive to define and oversee ESG efforts.

Although women are better represented in the public sector than in the private sector, women remain underrepresented at the top of the public sector’s talent pipeline. Senior partner Nora Gardner and coauthors offer three suggestions for leaders who are hoping to do more to foster women’s career development: train managers to effectively run diverse, inclusive, hybrid teams; expand the scope of sponsorship programs that connect women with organizational advocates; and fine-tune performance evaluations to better recognize women’s positive achievements.

Here are other recent notable findings from McKinsey research:

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #47, May 25, 2023

Nuclear power could play a critical role in decarbonization. Our weekly digest of McKinsey insights explores that topic and more.

Energy production currently accounts for about 30 percent of global emissions, and electricity demand could triple by 2050. It’s clear that meeting the world’s climate goals will require decarbonizing the power sector. This week, a McKinsey commentary suggests that nuclear energy could be a significant part of the solution. Elsewhere, an article examines the new infrastructure requirements that will be created by the transition to battery- and hydrogen-powered aviation.

Nuclear energy can provide reliable, 24/7 power while using less land than wind or solar arrays. It is already the largest single source of zero-carbon power in the United States. Senior partners Daniel Pacthod, Humayun Tai, and coauthors suggest that nuclear power could play a growing role in meeting the world’s net-zero targets, but only if the industry first overcomes obstacles such as public skepticism, nonstandardized plant designs, and an aging expert workforce. Aggressively reallocating capital to the sector, streamlining licensing processes, and training a new generation of workers could help the nuclear industry meet the challenges ahead of it.

Aircraft powered by batteries or hydrogen could comprise 21 to 38 percent of the world’s commercial and cargo fleet by 2050. Stakeholders should begin to prepare for the infrastructure changes that will be needed to accommodate these new technologies, according to a report from the Target True Zero initiative of the World Economic Forum (for which McKinsey provided knowledge support). Large airports, in particular, will need to increase and alter their energy capabilities. McKinsey partner Robin Riedel and coauthors say that an intercontinental air hub might need to allocate approximately $3.9 billion toward infrastructure updates by 2050, while a major regional airport might need to invest about $1.3 billion.

Here are other recent notable findings from McKinsey research:

  • A report on the state of the beauty industry forecasts “premiumization” over the next few years as customers trade up and increase spending, especially on fragrance and makeup. Senior partners Achim Berg, Kristi Klitsch Weaver, and coauthors say that independent brands and new challengers will create intensifying competition for incumbents. Among factors that will shift the landscape: slowing growth in China and the rising influence of Gen Z.
  • Commercial real estate has traditionally outperformed during inflationary periods, in part because investors have come to believe it’s a safe harbor. Senior partner Rob Palter and coauthors say this time might be different.
  • A new McKinsey Health Institute survey of some 21,000 people aged 55 and older assesses older adults’ views on healthy aging. Among the surprising results, according to senior partners Hemant Ahlawat, Viktor Hediger, and coauthors: the widespread integration of new technology (especially smartphones) into older adults’ lives.
  • The newest McKinsey Explainer offers a primer on talent management—the approaches companies take to keep their employees happy, skilled, productive, and on board.

A recent edition of Author Talks features senior partners Eric Lamarre, Kate Smaje, and Rodney Zemmel speaking about their new book, Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI (Wiley, June 2023). The authors share details from the playbook they use to help companies undertake digital transformations.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #46, May 18, 2023

What will it take for one of the world’s largest nations to become a farming powerhouse? Our weekly digest of McKinsey insights explores that topic and more.

Agriculture technology, or agtech, could add $95 billion to the Indian economy annually by 2030. This week, a McKinsey report examines which digital resources and other technologies could help rural Indian farmers embrace modern farming. McKinsey research focusing on Europe, meanwhile, explores how leaders could think about allocating precious land for renewable-energy projects. And the question of how to scale clean hydrogen is the subject of a column from a leader on McKinsey’s global hydrogen team.

Agriculture remains a central part of the Indian economy, accounting for more than 20 percent of the nation’s GDP. But hundreds of billions of dollars in growth could be left on the (farm to) table—unless the Indian agriculture industry embraces agriculture technology, or agtech, as McKinsey senior partner Avinash Goyal and coauthors uncover in their latest report. The space is gaining traction: Indian agtech start-ups raised about $1.6 billion in funding from investors in the past four years, mostly focused on platforms and products that play across the value chain, create digital solutions, or offer “agribiotech,” which uses biotechnology to create sustainable new products.

European leaders have set lofty goals to expand their renewable-energy sources (RES) by 2030. But one rigid problem stands in their way: land. Finding land to use for RES projects is difficult. Leaders should weigh the benefits of using the land for RES projects versus agriculture—if they don’t opt for land conservation altogether. Combining geographic information, satellite data, and AI, McKinsey partner Raffael Winter and his coauthors identify which areas are best suited for RES projects when weighing the costs.

Demand for hydrogen production is expected to grow four- to sixfold by 2050 and could cut global emissions by up to 20 percent annually in that time. Despite its promise, not all hydrogen is produced equally, as McKinsey partner Markus Wilthaner explains in his take on how to scale clean hydrogen. To realize hydrogen’s decarbonization potential, production costs need to drop, infrastructure needs to evolve, and investors and executives need to close the $460 billion investment gap.

Here are other recent notable findings from McKinsey research:

  • Uncertainty characterized much of the M&A market through the first quarter of the year, but there’s room for optimism yet. Executives expect to increase their M&A activity, citing factors such as shallower valuation drops than in previous downturns and stores of dry powder, explain McKinsey senior partners Jake Henry and Mieke Van Oostende.
  • The unsung heroes of the technology world, semiconductors, took center stage during the pandemic. If someone asked you to explain how they work, could you? Our McKinsey Explainer, “What is a semiconducter,” goes deep into what those valuable little chips are, what caused the semiconductor crisis, and more.
  • Having a hard time making sense of the economy’s mixed signals? McKinsey senior partners Michael Birshan and Ida Kristensen and partner Ezra Greenberg decipher what seemingly at-odds inflation, labor, and consumer confidence data could mean for the bigger picture.

A recent edition of Author Talks features retired United Airlines chairman and CEO Oscar Munoz and his new book, Turnaround Time: Uniting an Airline and Its Employees in the Friendly Skies (Harper Business, May 2, 2023), cowritten by Brian DeSplinter. In it, Munoz explains why listening to employees before diving into a company’s turnaround strategy is what distinguishes a successful transformation.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Alexandra Mondalek, an editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #45, May 11, 2023

What is the world’s leading electric-vehicle adopter doing to meet rising demand? Our weekly digest of McKinsey insights explores that topic and more.

Norway has more than 22,000 public electric-vehicle (EV) chargers, serving more than half a million electric vehicles. This week, a McKinsey report analyzes the Scandinavian nation’s approach to scaling EV charging infrastructure, offering lessons to other markets that build on the Norwegian experience. Elsewhere, McKinsey research sheds light on how organizations can reduce Scope 3 emissions, which are indirect emissions that appear across the value chain. And an interview with an industrial-agriculture executive highlights the role of biotech in raising livestock.

Norway provides a useful case study on how to scale EV charging infrastructure, as McKinsey partners Kjartan Kalstad, Swarna Ramanathan, and coauthors uncover in their latest report. To illustrate how quickly demand has grown in the country, whose pioneering approach to energy infrastructure has also become front-page news, consider this: it took four years to sell the first 10,000 EVs in Norway, but it only took four weeks to sell that many in 2022. To meet demand, a variety of actors have entered the competitive market to provide charging stations—although a clear leader hasn’t emerged, offering an opportunity to operators.

Reducing Scope 3 emissions (which arise throughout an organization’s value chain) is a must-solve issue as regulatory and investor pressures mount. Reducing those emissions begins by addressing six key dimensions—including supplier and customer selection and green-portfolio strategies—which simultaneously allow companies to capture value, according to McKinsey senior partners Jukka Maksimainen, Michel Van Hoey, and coauthors. In the chemicals industry, for example, sourcing from or partnering with providers of low-carbon raw materials could increase the share of recycled or biobased feedstock, which helps to reduce emissions both up and down the value chain.

Despite the rise in alternative proteins, animal-based food sources will continue to play an important role in the global food supply, according to Tina Sejersgård Fanø, executive vice president for agriculture and industrial biosolutions at biotech company Novozymes. For that reason, the focus should be on making animal production as sustainable as possible, Sejersgård Fanø explains to McKinsey senior partner Harry Bowcott and colleague. They discuss emerging innovations in the sector, such as a product that reduces the use of antibiotics in poultry farms, as well as examples of industry collaborations that could help to get us one step closer to a net-zero global economy.

Here are other recent notable findings from McKinsey research:

  • Today, 31 percent of nurses say they may leave their current jobs in direct patient care in the next year, reflecting the persistent challenges affecting the nursing labor market, according to our latest survey of frontline nurses in the United States. McKinsey senior partner Gretchen Berlin and coauthors examine what healthcare organizations can do to help attract and retain nurses.
  • Firms that adopt a “one-firm” operating model—where the “we” takes precedence over the “I”—are more than twice as likely to be in the top quartile of high-performing organizations. How does a one-firm business function in practice? McKinsey senior partner Scott Keller and coauthors outline the mechanics.
  • What is an effective meeting? Chances are, you could describe what isn’t an effective meeting. Consider this latest McKinsey Explainer the ultimate framework in deciding “Could this be an email instead?”

A recent edition of Author Talks features University of Oxford professor Paulo Savaget and his new book, The Four Workarounds: Strategies from the World’s Scrappiest Organizations for Tackling Complex Problems (Flatiron Books, March 2023). In it, the author shares how unconventional approaches to problem solving can bring the best results.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Alexandra Mondalek, an editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #44, May 4, 2023

What is the current status of organizational thinking about inclusion? Our weekly digest of McKinsey insights explores that topic and more.

More than 70 percent of companies express transformative ambitions around diversity, equity, and inclusion (DEI). But less than half say they have the infrastructure in place to realize those ambitions. This week, a McKinsey report analyzes the shifting landscape faced by organizations—including the challenge of translating DEI aspirations into results. Elsewhere, McKinsey research delves into consumer attitudes about the sustainability of product packaging. And a piece investigates whether AI can help insurers mitigate climate-related property risks.

The State of Organizations 2023 report—compiled by senior partners Dana Maor, Michael Park, Patrick Simon, and coauthor—identifies the ten most significant shifts confronting organizations today. Among them: the push to make meaningful progress on DEI. More than 20 percent of survey respondents who were asked about DEI said they can’t confirm that there is a sense of community and inclusion in their organizations. (Other topics covered in the report include the growing capabilities of AI, the changing expectations regarding talent attraction and retention, and the rise of the hybrid workplace.)

The newest McKinsey survey on packaging finds that about half of American consumers say they’re willing to pay more for products that are sustainably packaged. But, on average, respondents rank hygiene, ease of use, and durability as more important packaging characteristics. Senior partner David Feber and coauthors note that 40 percent of respondents living in urban neighborhoods cite the environmental impact of products as an extremely or very important factor in their buying decisions—compared with only 21 percent of respondents living in rural areas.

Executives from the analytics platform ZestyAI speak with partners Doug McElhaney, Christie McNeill, and Uma Sandilya about the potential for AI to help property and casualty insurers account for climate-related risks. AI-aided property assessments might also help inform property owners about strategies for reducing those risks. Insurers hoping to incorporate AI into their operations must sometimes contend with outdated tech infrastructure and regulatory limitations.

Here are other recent notable findings from McKinsey research:

  • The most recent McKinsey Global Survey on economic conditions finds respondents continuing to cite geopolitical instability and inflation as the top threats to economic growth. But Sven Smit, chair of the McKinsey Global Institute, and his coauthors note that financial-market volatility is a fast-rising concern.
  • A survey conducted by the McKinsey Health Institute reveals that Gen Zers and millennials are more likely than other generations to report that social media affects their mental health. Institute coleaders Erica Coe, Kana Enomoto, and coauthors also find that, among Gen Zers, female respondents are more likely than male respondents to say that social media negatively affects their body image and self-confidence.
  • The newest McKinsey Explainer offers a primer on quantum computing, which uses physics principles to solve complicated problems.

A recent edition of Author Talks features poet Maggie Smith—best known for the viral poem “Good Bones”—speaking about her new book, You Could Make This Place Beautiful (Atria/One Signal Publishers, April 2023). Smith’s memoir offers hard-earned perspectives on loss, forgiveness, and perseverance.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #43, April 27, 2023

Ships will need to run on greener fuels—but which ones? Our weekly digest of McKinsey insights explores that topic and more.

The world is seeking ways to decarbonize on land and at sea. In the maritime world, most ships are currently powered by fossil fuels, but greener fuel possibilities abound. This week, McKinsey analysis examines shipping companies’ plans and expectations as the industry prepares to adopt lower-carbon fuels. A separate article looks at the quest to decarbonize aluminum production. And a survey about retail banking assesses American consumers’ interest in climate-linked financial products.

To discover how shipping industry leaders are thinking about the adoption of lower-carbon fuels (such as ammonia and hydrogen), the Global Centre for Maritime Decarbonisation, the Global Maritime Forum, and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping recently conducted a survey—with analysis by McKinsey—of shipping companies that own and operate fleets comprising roughly 20 percent of the world’s total capacity. About one-third of respondents say they don’t know which types of fuel they expect their vessels to run on in future decades. Partner Matt Stone and coauthor suggest that there is opportunity for first movers to shape future fuel scenarios.

Aluminum can be infinitely recycled, with no loss of quality. But because much of the electricity needed for the world’s aluminum smelting comes from coal-fired power plants, the industry accounts for roughly 2 percent of global greenhouse-gas emissions. Partners Jeffrey Lorch, Alex Ulanov, and coauthors outline potential actions for stakeholders—including the finance sector (which could back investments in greener production processes), policy makers (who could offer grants to offset the costs of the transition), and aluminum customers (who could pledge to pay a 5 or 10 percent premium for green aluminum).

A McKinsey survey reveals that nearly 40 percent of American consumers report interest in enrolling in a climate-linked financial product (such as a climate-screened index fund). That interest extends across regions and income levels. Senior partners Marie-Claude Nadeau, Dan Stephens, and coauthors say that climate-linked financial products don’t need to be “concessionary” offerings since, in many cases, consumers express a willingness to pay more for them.

Here are other recent notable findings from McKinsey research on sustainable, inclusive growth:

A recent edition of Author Talks features venture capitalists Freada Kapor Klein and Mitchell Kapor speaking about their new book, Closing the Equity Gap: Creating Wealth and Fostering Justice in Startup Investing (HarperCollins Publishers, March 2023). The authors invest in tech start-ups that help close gaps of access, opportunity, or outcome for disadvantaged communities, and they maintain that this approach has resulted in top-quartile financial returns.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on McKinsey’s latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #42, April 20, 2023

Decarbonization could transform the steel industry. Our weekly digest of McKinsey insights explores that topic and more.

The steel industry is in a volatile moment, with a fragile outlook for the next decade. Decarbonization will play a major role in shaping steel’s future. This week, a McKinsey article looks at how industry players can navigate the current crossroads—with an eye toward greening the sector. Meanwhile, a separate article examines lessons learned from efforts to decarbonize the chemical industry in Germany. And a piece investigates the potential for recirculating the tech devices that large companies provide en masse to their employees.

An uncertain long-term demand forecast is complicating decision making for steel industry stakeholders. Partners Oleksandr Kravchenko, Benedikt Zeumer, and coauthors offer an analysis of potential scenarios, including an examination of decarbonization’s possible impact. While overall steel demand growth is expected to slow or stagnate, global demand for low-carbon steel is expected to grow tenfold over the next decade. Producing green steel will require significantly more power, which means regions with lower energy costs could attract investment—shifting the industry’s geographical footprint.

The chemical industry is large, energy-intensive, and responsible for roughly 2 percent of the world’s total emissions. Senior partners Ulrich Weihe, Thomas Weskamp, and coauthors present takeaways from the industry’s decarbonization initiatives in Germany. They identify four high-priority levers for reducing emissions: using a greener mix of fuels for steam generation, recapturing wasted heat, procuring renewably produced electricity, and maximizing energy efficiency.

Large corporations lease an immense number of tech devices such as smartphones, laptops, and computer monitors. The Berlin-based start-up circulee acquires preowned devices from large organizations, tests them, and recirculates them to smaller enterprises in need of tech hardware—offering a solution that’s both green and cost-effective. Thomas Gros, the CEO and cofounder of circulee, spoke with associate partner Tomas Laboutka about the challenge of convincing customers that preowned devices don’t incur additional risk or inconvenience.

Here are other recent notable findings from McKinsey research:

Nine McKinsey colleagues spoke at this year’s South by Southwest conference in Austin, Texas. A recap of their presentations touches on, among other topics, the business case for alternative proteins, the potential for Formula 1 auto racing to reshape the broader mobility sector, and the power of empathy to counteract employee burnout.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #41, April 13, 2023

Hubs for carbon capture, utilization, and storage could let companies collaborate to achieve their net-zero goals. Our weekly digest of McKinsey insights explores that topic and more.

Carbon capture, utilization, and storage (CCUS) systems could help many hard-to-abate sectors achieve net-zero targets. Creating CCUS hubs—with capabilities shared across multiple companies or industries—might ease uptake of the technology. This week, McKinsey research examines ways to accelerate the development of CCUS hubs. Meanwhile, a separate article looks at the potential for reusable (not to be confused with recyclable) packaging.

CCUS hubs that serve multiple companies or sectors could lower costs, reduce risks, and attract government funding. There are currently about 15 CCUS hubs around the world in various stages of development. McKinsey analysis suggests that approximately 700 CCUS hubs could eventually be established. Partner Luciano Di Fiori and coauthors say that the business case for these hubs will depend, in part, on the availability of renewable energy to power carbon removal and the willingness of parties from different industries to cooperate on hub formation.

Reusable packaging (picture the returnable glass milk bottles of yore) has seen renewed interest lately, given its potential for minimizing waste. But reusability faces scaling challenges relating to infrastructure, safety, and cost. Senior partner Oskar Lingqvist and coauthors outline key questions to answer, including: How many times must a package be reused before gains are realized? How far will the average reusable package travel between uses? And will consumers be willing to adapt their behavior to reusability?

Here are other recent notable findings from McKinsey research:

  • Senior partner Carolyn Dewar and Asia chairman Gautam Kumra offer four steps to success for new CEOs: don’t make it all about you, listen before you act, create positive first impressions, and prioritize where you get involved.
  • A survey of chief investment officers for leading global funds reveals they favor CEOs who think holistically and move quickly. Partners Jay Gelb, Werner Rehm, and coauthors note that respondents prefer CEOs to focus less on short-term earnings and more on how to boldly reallocate resources to maximize value creation.
  • Partner Brandon Flowers and coauthors examine America’s market for individual health insurance and find that consumer options are expanding: 87 percent of consumers now have access to three or more insurers—up from 49 percent in 2018.
  • The newest McKinsey Explainer offers a primer on a very modern form of promotion: “What is influencer marketing?”

A recent edition of Author Talks features Don Norman, a former Apple executive and founding director of the University of California Design Lab, speaking about his new book, Design for a Better World: Meaningful, Sustainable, Humanity Centered (The MIT Press, March 2023). Norman draws a distinction between human-centered design (which aims to help people understand and use products) and humanity-centered design (which aims to reduce those products’ harmful effects on the environment).

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #40, April 6, 2023

Automotive suppliers will need to adapt as electric vehicles become more prevalent. Our weekly digest of McKinsey insights explores that topic and more.

As the electric-vehicle (EV) market grows, automotive suppliers will need to accommodate changing demand. By 2030, sales of EV parts such as electric powertrain components are projected to comprise a much larger portion of suppliers’ revenue pools. This week, a pair of McKinsey articles looks at the opportunities and challenges that automotive suppliers are likely to encounter as vehicle electrification accelerates. Meanwhile, an interview examines the potential for wireless charging of EVs.

Between 2020 and 2022, EV sales grew by more than 90 percent in both the United States and Europe and by more than 300 percent in China. This surge has had dramatic effects up and down the automotive value chain. Components for electric powertrains, in particular, are now in high demand. Partners Brian Loh, Lukas Michor, Patrick Schaufuss, and coauthors offer guidance for suppliers of these components. Among their suggestions: cooperate with manufacturers to identify emerging needs; investigate M&A opportunities, which can come to the fore when marketplaces are in transition; and maintain focus on supply chain resilience as the industry landscape shifts.

Although demand for parts such as batteries and electric motors will grow as EVs proliferate on the world’s roads, senior partner Andreas Venus and coauthors note that many standard parts—such as axle systems and suspensions—will remain core components even as vehicles increasingly become electrified. These core components will generate a shrinking portion of total market revenues (declining from 69 percent in 2022 to 55 percent by 2030) but will still represent a significant source of value for suppliers. Suppliers will benefit from remaining focused on these core components even as they monitor the evolution in demand.

Wireless charging of EVs could be just as efficient as wired charging—without the inconvenience of a cord. Partners Florian Nägele and Shivika Sahdev interview four executives from companies hoping to provide wireless EV-charging solutions. Though widespread adoption is likely years away, wireless charging—which can be functionally similar to using an induction cooktop—has much potential: for instance, it might enable autonomous EVs to charge themselves.

Here are other recent notable findings from McKinsey research:

  • Hotels are facing acute labor shortages. Partner Ryan Mann and coauthors offer three techniques to improve hotel staffing models: use more granular metrics to better predict the ebbs and flows of staffing needs, redesign roles to combine multiple responsibilities, and assign staff to cover a network of locations instead of just one hotel.
  • Customer experience is becoming a primary differentiator for telecom companies. Senior partners Nicolas Maechler, Rohit Sood, and coauthors counsel telcos to redesign customer service in ways that make it more proactive—for instance, presenting customers with support options before they realize their Wi-Fi has gotten spotty.
  • Satellites using synthetic aperture radar (SAR) can see through clouds and darkness to gather images. Partner Dale Swartz and coauthor spoke with Payam Banazadeh, founder and CEO of Capella Space, a company that has provided SAR capabilities for defense and intelligence purposes. Banazadeh says SAR has commercial applications, such as allowing companies to monitor their global infrastructure.
  • Partner John Means spoke with David Arena, head of global real estate at JPMorgan Chase. The company’s new headquarters building in Midtown Manhattan features state-of-the-art office amenities. Among them: a pleasant smell. “We’ve done lots of due diligence on aromatherapy,” says Arena.

A recent edition of Author Talks features Martin Wolf, chief economics commentator at the Financial Times, speaking about his new book, The Crisis of Democratic Capitalism (Penguin Random House, February 2023). Wolf expresses his view that the marriage of democracy with the market economy is failing and that we must reverse this failure or risk succumbing to antidemocratic forces.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #39, March 30, 2023

Insufficient access to healthcare, high-speed internet, and financial services can harm Black communities. Our weekly digest of McKinsey insights explores that topic and more.

White Americans have 80 percent more wealth than Black Americans. Lack of inclusivity in the financial-services sector is among the culprits. This week, a guest on The McKinsey Podcast discusses ways to close the wealth gap—and also narrow racial inequities relating to healthcare and technology. Meanwhile, a separate article outlines opportunities for property and casualty (P&C) insurers hoping to aid the net-zero transition. And a compendium of McKinsey pieces on the global food crisis examines, in part, how global food systems have been disrupted by climate change.

A recent McKinsey report on Black economic mobility identified eight potential areas of investment to help support Black-owned businesses and Black communities. Senior partner Shelley Stewart III, coauthor of the report, discussed its findings in an appearance on The McKinsey Podcast. Stewart says better access to financial services and broadband internet could expand opportunities for Black Americans. But he adds that any effort to remedy racial disparities should not ignore access to healthcare, as good health is a crucial starting point for meaningful participation in the economy.

The net-zero transition could present growth opportunities for P&C insurers. Senior partner Sylvain Johansson and coauthors say insurers can attempt to capture value by providing decarbonization advisory services, developing products that transfer net-zero-related risks, and launching new business models. One example of a potential new model: using customer data to connect building owners with solar-energy companies while insuring the installation and operation of solar equipment.

A briefing examines the harmful disruption of the global food system. Climate change is threatening the world’s breadbaskets. Inefficient production processes squander a significant portion of harvested food before it reaches grocers’ shelves. Lack of access to nourishing food can exacerbate inequity: more than three billion people around the world can’t afford a healthy diet.

Here are other recent notable findings from McKinsey research:

This Women’s History Month, McKinsey leaders spoke about their roles as women in the workplace—and beyond. To view these video conversations, visit “The Women of McKinsey” page.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #38, March 23, 2023

Innovative new designs could accelerate the construction of nuclear power plants. Our weekly digest of McKinsey insights explores that topic and more.

Global power consumption could triple by 2050 as vehicles, building operations, and industrial processes all become electrified. It’s not clear, however, that renewables such as wind and solar will be able to keep pace with demand. This week, McKinsey research examines whether nuclear power—a zero-carbon energy source that currently generates roughly 10 percent of the world’s electricity—can scale up to fill the gap. A separate article outlines opportunities created by the passage of America’s Bipartisan Infrastructure Law (BIL), which will provide more than $1 trillion in public investment. Elsewhere, a piece considers the tangential business impacts that could result from electrification of America’s commercial vehicle fleets.

Nuclear power plant projects have frequently been hampered by construction delays and cost overruns. A new generation of smaller, less complex reactors has been designed with the goal of cutting costs and accelerating build times. Partner Bill Lacivita and coauthors suggest several approaches that could help quickly scale up construction of plants, thereby aiding efforts to reach decarbonization targets. Among them: establish streamlined international licensing processes, standardize designs for plant systems and components, and consider building multiple reactors at a single location.

Clean-energy funding provided by the BIL could be available to a wide range of stakeholders involved with projects up and down the value chain—from electric-grid improvements to carbon capture initiatives to the development of clean hydrogen. Roughly 40 percent of funding has been launched, but new funding cycles are expected to begin in early 2023. Partner Adam Barth and coauthors say that organizations that can tell a compelling story focused on economic development, environmental justice, and equity are more likely to seize funding opportunities.

The transition to battery-electric-vehicle commercial fleets will create myriad new business possibilities, such as charge point servicing and battery recycling. Partner Malte Hans and coauthors foresee resulting value pools being captured primarily by vertically integrated players, such as OEMs and utility companies. Strategic partnerships might improve the odds of success for others.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features Tomas Chamorro-Premuzic, a professor of business psychology at Columbia University and University College London, speaking about his new book, I, Human: AI, Automation, and the Quest to Reclaim What Makes Us Unique (Harvard Business Review Press, February 2023). The author expresses his view that, in the AI age, the right questions might be more valuable than the right answers.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #37, March 16, 2023

Climate technologies must be scaled faster to meet net-zero goals. Our weekly digest of McKinsey insights explores that topic and more.

To meet current net-zero targets, climate technologies will need to be scaled faster. But challenges remain—particularly amid an uncertain economic moment. This week, a McKinsey article outlines promising areas of action for builders of green businesses. A separate piece looks at growth in climate-related investing and highlights key factors for investors to consider. Elsewhere, McKinsey research examines opportunities for recyclers of electric-vehicle (EV) batteries.

Climate tech must accelerate rapidly to meet net-zero commitments. Even mature technologies such as wind and solar will need to scale six to 14 times faster (exhibit). Bold decisions are necessary to stave off the direst climate change outcomes. Senior partners Rob Bland, Laura Corb, Tomas Nauclér, and coauthors suggest three moves to make now: develop supply chains by seeking partnerships across sectors (upstream, downstream, and horizontally); close the skills gap (by, for instance, launching new training facilities or partnering with universities on talent-building initiatives); and explore new financing avenues (such as blended finance models, which mix private, public, and philanthropic funding).

Climate-related investments grew significantly in 2022—up 6.6 percent from the year before—despite secular headwinds. Growth in energy transition financing has been bolstered by both policy support and general alignment in capital markets. Senior partners Fredrik Dahlqvist, Anders Rasmussen, and coauthors outline several factors essential to the success of climate-related investments. Among them: demonstrated effectiveness of technologies, a clear path to cost competitiveness for products, and the ability of leadership teams to attract necessary talent.

More EVs on roads means more EV batteries—and a greater need to recycle those batteries. More than 100 million EV batteries are expected to be retired in the next decade. These batteries can be refurbished and given second lives in other applications, but the battery recycling market remains far from maturity. Senior partner Martin Linder and coauthors say that to be successful, battery recyclers should secure sufficient access to end-of-life batteries, build partnerships up and down the recycling value chain, and keep tabs on the latest trends in battery design.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features former IBM chair and CEO Ginni Rometty speaking about her new book, Good Power: Leading Positive Change in Our Lives, Work, and World (Harvard Business Review Press, March 2023). The author describes her journey from childhood poverty to the C-suite and explains her conviction that asking for help is a sign of strength.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #36, March 9, 2023

Decarbonizing cement and concrete production could lead to business opportunities. Our weekly digest of McKinsey insights explores that topic and more.

Global demand for cement and concrete nearly tripled over the past 20 years and is expected to remain consistent in upcoming decades. But producing these materials is a major contributor to carbon dioxide emissions. This week, McKinsey research looks at strategies for creating sustainable—and profitable—cement value chains. Elsewhere: an examination of the shifting landscape for real estate investors suggests that they should embrace sustainability initiatives as opportunities for value creation. And a piece about design thinking offers tips on how best to design with sustainability in mind.

Circular technologies could help cement players generate profits while reducing emissions. Examples of circular approaches include deriving energy from recovered heat, capturing and storing carbon, and repurposing waste materials (for example, turning demolished structures into gravel for roads). Senior partners Jukka Maksimainen, Daniel Pacthod, Humayun Tai, Michel Van Hoey, and coauthors say that the use of circular technologies could help eliminate or mitigate roughly two billion metric tons of carbon dioxide emissions by 2050.

Climate change is already shaping real estate valuations. Real estate investors would be wise to consider physical risks (such as floods) and transition risks (such as changes in regulatory requirements) that could stem from climate-related disruptions. Amid a broader examination of the real estate landscape, senior partners Daniele Chiarella and Aditya Sanghvi and coauthors offer guidance for real estate players looking to navigate climate change. Among their suggestions: carefully evaluate climate-related risks and opportunities attached to any prospective property, consider decarbonizing existing properties to enhance their value, and explore potential new businesses (such as offering emissions reduction services to other property owners).

Careful product design can aid decarbonization efforts. A McKinsey Explainer about design thinking outlines strategies for generating sustainable products. Smart design approaches can reduce emissions from both a product’s manufacturing process and its end use. “Skinny design” can create products that require less material and packaging.

Here are other recent notable findings from McKinsey research:

  • Some rules for growth are more powerful than others. Senior partners Chris Bradley and Jill Zucker and coauthors say that winning market share from competitors and focusing on regional dominance are both highly correlated with growth, while programmatic mergers and acquisitions seem to have less impact.
  • McKinsey’s global director of geopolitical risk Ziad Haider spoke with executives from Intel, Google, and Pfizer about how they build resilience in a continually changing risk environment. Getting perspectives from first-person sources on the ground—while avoiding disinformation—can help bring clarity to risk calculations.
  • Partner Robin Riedel and coauthors say that advanced air mobility (which involves flights as short as a few miles, often in technologically advanced aircraft) will thrive only if the “hassle factor” is eliminated. Companies can consider running more frequent flights even if available seats exceed demand, while looking for ways to ease passengers’ transitions between ground transport and air options.

A recent edition of Author Talks features leadership coach Sally Helgesen speaking about her new book, Rising Together: How We Can Bridge Divides and Create a More Inclusive Workplace (Hachette Book Group, February 2023). The author describes her simple test for identifying inclusive workplaces: do most employees speak about the organization as “we” or as “they”?

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #35, March 2, 2023

A resilience agenda could help leaders weather short-term disruptions while maintaining focus on sustainable, inclusive growth. Our weekly digest of McKinsey insights explores that topic and more.

Organizations are seeking ways to build resilience in a world where they’re confronted with continuous, overlapping disruptions. Maintaining long-term perspective is crucial even amid short-term crises. In conjunction with the World Economic Forum, McKinsey presents a “resilience agenda” to help guide leaders who are attempting to foster sustainable, inclusive growth during a challenging moment. Elsewhere: an article offers guidelines for oil and gas companies looking to invest in the sustainable-power value chain. And McKinsey analysis reveals the value of employing neighborhood-level data in crafting American racial-equity initiatives.

Leaders should avoid being overwhelmed by immediate issues, even as disruptions mount. Choices about how to create a resilient world can translate into trillion-dollar swings in GDP growth—and incalculable differences in the quality of human life. McKinsey global managing partner Bob Sternfels and World Economic Forum president Børge Brende present a resilience agenda that offers a framework for building resilience across dimensions such as climate, healthcare, technology, and geopolitics. A holistic approach, a long-term mindset, and openness to public–private collaborations are all vital enablers of resilience.

Energy markets are changing rapidly, and the traditional business models of oil and gas players are under pressure. Senior partner Humayun Tai and coauthors say that oil and gas companies are strongly positioned—given their global scale, significant resources, and unique capabilities—to play key roles in the energy transition. Among the most promising areas for investment by these companies: offshore project development, hydrogen production and transportation, and electric-vehicle charging infrastructure.

Nationally aggregated data about racial inequity can sometimes miss crucial details that are specific to American cities or neighborhoods. McKinsey research has revealed important microlevel differences relating to issues such as education and food security. McKinsey Global Institute director Kweilin Ellingrud and North America social responsibility leader Ramesh Srinivasan suggest that a greater understanding of equity gaps between neighborhoods could help stakeholders prioritize in a more targeted manner.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features University of Southern California adjunct professors of entrepreneurship Garrett Brown and Colin Coggins speaking about their new book, The Unsold Mindset: Redefining What It Means to Sell (HarperCollins Publishers, February 2023). The authors express their views that manipulation and smarm are ineffective sales techniques and that authenticity and emotional intelligence can help salespeople close deals.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. To learn more about McKinsey’s efforts to create an inclusive economy, visit McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #34, February 23, 2023

Corporate monetary pledges aimed at fighting racial injustice have become more difficult to track. Our weekly digest of McKinsey insights explores that topic and more.

In recent years, many large companies have made monetary pledges to fight racial injustice. This week, the McKinsey Institute for Black Economic Mobility analyzes those pledges. New research reveals, among other insights, that these commitments have become more broadly targeted and more difficult to track. Elsewhere, an article looks at how supply chain snarls can impede renewable-energy projects.

Companies’ monetary commitments in support of racial equity have become less specifically targeted since 2021. Companies increasingly direct monetary pledges toward broad initiatives that don’t always disclose how funds are spent. McKinsey partner Duwain Pinder and coauthors offer suggestions for companies looking to make future pledges. Among them: be transparent and specific about the timelines and targets of pledges, and don’t forget—while making those external pledges—to also make internal commitments to employees.

Supply chain tangles have created difficulties for developers of renewable energy. Labor shortages and the geographic concentration of vital raw materials are among the most pressing obstacles to the construction of new (and in-demand) wind and solar capacity. Senior partner Alberto Bettoli and coauthors say vertical integration could be one solution: renewables companies that can acquire or partner with materials suppliers might be better able to keep projects on track.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features Harvard Medical School psychiatry professor Robert Waldinger speaking about his new book, The Good Life: Lessons From the World’s Longest Scientific Study of Happiness (Simon & Schuster, January 2023). Waldinger, who oversees the Harvard Study of Adult Development, says the 85-year-old longitudinal study reveals that the strongest source of happiness is good relationships, a successful career does not always result in contentment, and no one is happy all the time.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com. 

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #33, February 16, 2023

Banks need better methods for handling data on sustainability. Our weekly digest of McKinsey insights explores that topic and more.

The banking industry faces increasing pressure to disclose data relating to environmental, social, and governance (ESG) issues. Achieving greater transparency will require banks to adapt their IT infrastructure. This week, a McKinsey piece lays out an ESG-data road map for banking’s IT leaders. Separately, an interview with the chief sustainability officer at the Monetary Authority of Singapore looks at approaches to financing the net-zero transition. And McKinsey research reveals that meat consumption trends in China could have environmental implications.

To keep pace with regulatory changes and consumer needs, banks need to integrate ESG-related data into their IT systems and processes. McKinsey partner Henning Soller and coauthors offer banking’s IT leaders best practices on the topic. Among them: give investors real-time visibility into the ESG-related aspects of their portfolios, ensure that ESG data handling is sensitive to both shifting market demands and location-specific regulatory requirements, and encourage cross-functional collaboration to avoid data silos.

Severe weather events resulting from climate change pose a grave threat to Southeast Asia. Gillian Tan, chief sustainability officer at the Monetary Authority of Singapore, spoke with McKinsey partner Bharath Sattanathan about the potential to use a blend of public and private finance to help combat climate change. Tan wonders whether financial institutions could be offered inducements—such as different treatment of loans for green initiatives—to take more action in the fight against carbon emissions.

Results of a McKinsey survey of Chinese consumers identify trends in meat consumption, including attitudes toward sustainability. Senior partners Sheng Hong and Roberto Uchoa de Paula and coauthors note that awareness of food sustainability issues is rising in China but has not yet resulted in increased enthusiasm for alternative meat. Almost 80 percent of survey respondents report that they dislike the taste of alternative meat products. About 20 percent dislike the price.

Here are other recent notable findings from McKinsey research:

A recent edition of Author Talks features University of Pennsylvania Carey Law School professor Tess Wilkinson-Ryan speaking about her new book, Fool Proof: How Fear of Playing the Sucker Shapes Our Selves and the Social Order—and What We Can Do about It (HarperCollins Publishers, February 2023). Wilkinson-Ryan maintains that decision making suffers when people are scared to look foolish but improves when people make themselves cognizant of that fear.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #32, February 9, 2023

Consumers say they care about sustainability—but what do their wallets say? Our weekly digest of McKinsey insights explores that topic and more.

In surveys, American consumers often signal that sustainability matters to them. But are they in fact more likely to buy a product if it’s sustainably produced? This week, McKinsey research investigates whether products that make claims related to environmental, social, and governance (ESG) sell better than products that don’t. Meanwhile, a separate article looks at ways to close the Black tech talent gap. And a piece examines decarbonization efforts in the cement and concrete industry.

Consumer products that made ESG-related claims on their packaging grew faster over a five-year period than products that made no claims, according to a study jointly conducted by McKinsey and NielsenIQ. Among other findings from the study (which analyzed sales data covering 600,000 individual product SKUs representing $400 billion in annual retail revenues): ESG-related claims boosted sales across varied product categories and brand sizes, and less-common claims tended to be associated with larger sales effects. Senior partner Steve Noble and coauthors say that consumer-packaged-goods companies could benefit from ramping up development of environmentally sustainable and ethically produced products.

Black people constitute 12 percent of the US workforce but only 8 percent of tech employees and 3 percent of C-suite tech executives. As a result, Black households could lose out on more than a cumulative $350 billion in tech job wages by 2030. Senior partner Mark McMillan and coauthors suggest several actions that could help close the Black tech talent gap. Among them: develop stronger partnerships between corporations and historically Black colleges and universities and upskill Black tech employees to ease advancement into leadership ranks.

Cement production is a crucial target for decarbonization as it generates 7 percent of global CO2 emissions. Senior partner Jukka Maksimainen and coauthors identify three emissions-reduction levers that could aid the effort: replace clinker (a lumpy substance—often used as a binder in cement products—that accounts for 90 percent of cement production emissions) with alternative materials such as fly ash or metal slag; use electric kilns to cut energy-related emissions; and store and reuse remaining CO2.

Here are other recent notable findings from our research:

A recent edition of Author Talks features father–daughter duo Alex Jadad and Tamen Jadad-Garcia speaking about their new book, Healthy No Matter What: How Humans Are Hardwired to Adapt (Penguin Random House, January 2023). The authors elucidate, among other themes, their concept of “enoughness”: health strategies can err both by doing too much (overtesting, overdiagnosing) and too little (failing to control risk factors such as high blood pressure or high blood sugar).

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #31, February 2, 2023

Executives are navigating a serpentine path to net zero. Our weekly digest of McKinsey insights explores that topic and more.

Getting to net zero will involve trade-offs between long-term goals and short-term realities. It could be a serpentine path, full of setbacks and adjustments. This week, a McKinsey podcast looks at possible next moves for executives trying to balance decarbonization efforts against pragmatic concerns. Meanwhile, a separate article examines the economics of electrifying America’s commercial-vehicle fleets.

Many executives might be wondering how to advance toward a decarbonized future while enduring near-term economic shocks. In an episode of The McKinsey Podcast, Anna Moore and senior partner Humayun Tai discuss this duality and its ramifications. One way to make pragmatic strides toward decarbonization is to search for win–win scenarios in which decarbonization initiatives lead to market share gains.

Operators of American commercial-vehicle fleets have been hesitant to embrace electrification—in part because they have memories of an earlier transition (to engines powered by compressed natural gas) that failed to successfully materialize. But Moritz Rittstieg, Saleem Zafar, and coauthors say shifting economics are making this an appealing moment to make the switch to electric fleets. Facts to consider: electricity is now three to five times cheaper than diesel fuel, and battery electric vehicles might outperform internal-combustion-engine vehicles in terms of total cost of ownership as soon as 2025.

Investments related to environmental, social, and governance (ESG) concerns have attracted increasing levels of interest—and scrutiny—in recent years, and companies have endeavored to solidify their ESG-related policies.

Here are other recent notable findings from our research:

A recent edition of Author Talks features senior partners Venkat Atluri and Miklós Dietz speaking about their new book, The Ecosystem Economy: How to Lead in the New Age of Sectors without Borders (John Wiley & Sons, October 2022). The authors maintain that cross-sectoral ecosystems—bundling a variety of offerings from different industries—are poised to create increasing levels of value while making life easier for consumers.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #30, January 26, 2023

Inadequate broadband access for Black households could factor into lower Black representation rates in the American tech workforce. Our weekly digest of McKinsey insights explores that topic and more.

In the United States, Black households lag behind White households in digital skills, ownership of desktop and laptop computers, and access to high-speed internet. It’s a gap that can be interpreted as both a cause and an effect of inadequate Black representation in the American tech workforce. This week, McKinsey analysis looks at ways to narrow that digital divide. Meanwhile, a separate piece assesses the shortfall of women working at European tech companies—and offers suggestions to redress the imbalance.

Only 69 percent of Black Americans have desktop or laptop computers, compared with 80 percent of White Americans (exhibit). Disparities like this can skew hiring for tech jobs—which often pay better than other occupations—thereby exacerbating income and wealth gaps. Kunal Modi, Todd Wintner, and coauthors posit five steps that could be taken to help promote digital equity and inclusion. Among them: conduct comprehensive surveys of underserved locations to ensure that Black communities receive their fair share of tech-enabling government funding, and partner with local stakeholders to ensure that eligible households then take advantage of these subsidies.

2020The digital divide disproportionately affects Black Americans across adoption, computer ownership, and digital skills.

Women occupy only 22 percent of all tech roles across European companies. The percentage of European women in STEM drops off precipitously during the transition from secondary school to university and again during the transition into the workforce. Senior partner Sven Blumberg and coauthors suggest four interventions that could improve women’s representation in European tech. One potential approach is to retrain and redeploy women to place them in tech fields where hiring is growing fastest.

Here are other recent notable findings from our research:

A recent edition of Author Talks features Ha-Joon Chang, professor of economics at SOAS University of London, speaking about his new book, Edible Economics: A Hungry Economist Explains the World (PublicAffairs, January 2023). Chang explains why he uses stories about food to elucidate economic arguments, while also expressing his belief that countries can benefit from strong, government-led industrial policies.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #29, January 19, 2023

As Davos 2023 continues, sustainable and inclusive growth lies at the center of many discussions. Our weekly digest of McKinsey insights explores that topic and more.

The World Economic Forum (WEF) gathered leaders from around the world this week. As a strategic partner to the WEF, McKinsey is engaging with Davos 2023 participants—including decision makers from government, business, and civil society—to identify opportunities for creating sustainable, inclusive growth across the globe. Our WEF overview page is the place to find McKinsey’s latest Davos-related insights and interviews. Elsewhere: McKinsey analysis points to six areas of action for business leaders and policy makers who hope to enable an orderly transition to renewable energy. And a look at the future of batteries examines strategies for making the industry more sustainable and resilient as battery demand rises.

Sustainability and inclusivity are central discussion topics at Davos 2023. Senior partner and chief marketing officer Tracy Francis and senior partner Daniel Pacthod explain why the WEF matters more than ever as leaders around the world reimagine globalization for a new, uncertain era. In partnership with the WEF’s Centre for the New Economy and Society, senior partners Kweilin Ellingrud and Lareina Yee and coauthors examine best practices for improving diversity, equity, and inclusion (DEI) and suggest ways to make DEI efforts more quantifiable and scalable. For more from Switzerland, check out what young global leaders list as their top Davos agenda items, and—if you need a primer—read the latest McKinsey Explainer, “What is Davos?”

A key element in reducing greenhouse-gas (GHG) emissions in the United States will be decarbonizing the electric sector, which currently accounts for 25 percent of US GHG emissions. Senior partners Hamid Samandari and Humayun Tai and coauthors outline six steps for reducing emissions while maintaining a resilient energy supply. Among them: securing and developing land for renewable energy. To meet some climate goals, a high proportion of the land suitable for generating solar or onshore wind power will need to be used efficiently.

As global demand for lithium-ion batteries grows, the industry will face new opportunities and challenges. In collaboration with the Global Battery Alliance, senior partners Mikael Hanicke and Martin Linder and coauthors suggest ways to scale up effectively and responsibly. Three important components for healthy growth: diversified supply chains, decarbonized operations, and a circular value chain, in which materials are reused, repaired, or recycled.

Here are other recent notable findings from our research:

A recent edition of Author Talks features Myra Strober, founding director of Stanford’s Clayman Institute for Gender Research, speaking about her new book, Money and Love: An Intelligent Roadmap for Life’s Biggest Decisions (HarperCollins Publishers, January 2023), written with Abby Davisson. Strober explains her “5Cs” framework for making decisions about money and love: clarify, communicate, consider a broad range of choices, check in with family and friends, and anticipate likely consequences.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #28, January 12, 2023

Davos 2023 begins next week, with global sustainability and inclusivity expected to be major focal points. Our weekly digest of McKinsey insights explores that topic and more.

The annual meeting of the World Economic Forum (WEF) kicks off next week in Davos, Switzerland. As a strategic partner to the WEF, McKinsey will engage with Davos 2023 participants—including decision makers from government, business, and civil society—to identify opportunities for creating sustainable, inclusive growth across the globe. Our WEF overview page will be the place to find McKinsey’s Davos-related insights and interviews. In the meantime: a McKinsey article offers four strategies for fashion brands looking to become more inclusive by connecting with Black consumers (whose spending on apparel and footwear is expected to reach $70 billion by 2030, with much new business up for grabs in the interim). And a piece examines the rise of virtual healthcare, while suggesting ways to include populations that are getting left behind in the rush to telemedicine.

Davos 2023 will run from January 16–20. Sustainability and inclusivity are poised to be central discussion topics. Chief marketing officer and senior partner Tracy Francis and senior partner Daniel Pacthod have hosted a sneak preview video covering what to expect. And next week, Pacthod will join senior partner Kate Smaje to host an on-site event—that welcomes virtual attendees—providing firsthand accounts of what they’re seeing and hearing on the ground in Switzerland. To prepare for the WEF, check in on what young global leaders view as top Davos agenda items. (If you’re in need of a primer, read McKinsey’s explainer: “What is Davos?”)

When shopping for apparel, Black consumers are 11 percentage points more likely than non-Black consumers to prefer e-commerce options. Senior partners Tiffany Burns and Shelley Stewart III and coauthors analyze data on Black consumers’ buying habits while suggesting four effective strategies for reaching these shoppers: amplify products made by Black creators (and inspired by the needs of Black consumers); employ diverse marketing campaigns (that include user-generated content from Black consumers); make products affordable (and offer flexible payment models); and build digital and physical shopping realms in which Black consumers feel welcome.

Telemedicine represented 1 percent of patient visits prior to the COVID-19 pandemic. It now represents 14–17 percent of visits. But there are emerging gaps in access to virtual healthcare: for instance, though rural areas are often physically farther from in-person health services, they still trail urban areas when it comes to virtual-healthcare adoption. Alex Harris and coauthors suggest that telemedicine’s potential could be bolstered by improving uptake rates for lower-income patients, older patients, and patients with less access to technology.

Here are other recent notable findings from our research:

A recent edition of Author Talks features marketing professor Peter Fader and retail scientist Michael Ross speaking about their new book, The Customer-Base Audit: The First Step on the Journey to Customer Centricity (Warton School Press, November 2022). Fader and Ross maintain that long-term business growth begins with a deep understanding of how customers think and behave—and with an acknowledgment that some customers provide far more value than others.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.




Sustainable and inclusive growth: Briefing note #27, January 5, 2023

A majority of luxury-vehicle owners are ready for the shift to electric vehicles. Our weekly digest of McKinsey insights explores that topic and more.

Luxury-vehicle owners around the world are open to buying electric vehicles (EVs). They also profess very little brand loyalty. This week, McKinsey research examines the global luxury-vehicle sector and the opportunities that could emerge as it transitions to an EV-heavy future. A separate article looks at the entrance of Asian EV brands into the European market—and what European incumbents might learn from it. Meanwhile, a look at the potential benefits of using drone-powered package delivery services finds that drone deliveries could eventually be cheaper and greener than other last-mile delivery options.

A global McKinsey survey of owners of luxury vehicles (retailing for $200,000 or more) finds that 62 percent of respondents who own luxury vehicles with internal-combustion engines are open to switching to EVs or plug-in hybrids. And 95 percent of luxury-vehicle owners say they’d consider switching brands for their next vehicle purchase. Senior partner Jan-Christoph Köstring and coauthors suggest that many luxury-EV customers could soon be up for grabs and that manufacturers might boost brand loyalty by fostering exclusive owners’ communities replete with special events and services.

Asian EV makers are gaining a foothold in the European market. Their strategies have varied widely, ranging from direct-to-consumer approaches to partnerships with local importers. Among the customer frustrations these new players are attempting to address with better solutions: puzzlement at opaque vehicle pricing and disappointment over long delivery wait times. Niels Dau and coauthors suggest that incumbent European brands might seize this unsettled moment amid the ongoing EV transition to make overdue changes—or risk getting left behind by disruptive Asian competitors.

Thousands of commercial drone deliveries already occur every day around the world. Drones could potentially offer lower carbon emissions than other last-mile delivery options such as cars and vans (even electric ones). But, say Robin Riedel and coauthors, labor costs could be a limiting factor: for drones to succeed, regulations and technology will need to permit a single operator to control many drones simultaneously.

Here are other recent notable findings from our research:

A recent edition of Author Talks features Jacob Harold, cofounder of Candid, speaking about his new book, The Toolbox: Strategies for Crafting Social Impact (John Wiley & Sons, December 2022). Among the powerful tools Harold recommends for enacting social change and building a better world: game theory, mathematical modeling, design thinking, and storytelling.

McKinsey is striving to create inclusive growth through collaborations with clients and local communities. By preparing students for the jobs of tomorrow, propelling wealth creation for working families, and supporting racial equity, McKinsey is helping to build an economy that works for everyone. Learn more about McKinsey’s efforts to create an inclusive economy, on McKinsey.com.

This briefing note, based on our latest published insights, was prepared by Seth Stevenson, a senior editor in McKinsey’s New York office.

For McKinsey’s 2022 perspectives on sustainable and inclusive growth, visit our archive of briefing notes that were published throughout the year.

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