McKinsey & Company, together with technology companies, has committed $925 million to fight climate change.
McKinsey & Company’s McKinsey Sustainability, in collaboration with technology companies Stripe, Alphabet (NASDAQ:), Shopify and Meta, has established a platform that will work to accelerate the development of technologies to capture carbon from the atmosphere . Created to buy permanent carbon emissions from companies producing promising new solutions, this initiative called Frontier is a $925 million Advanced Market Commitment (AMC) to be achieved by 2030. An estimated 700,000 lives were saved thanks to the success of the AMC model, which was used 10 years ago to accelerate the development of pneumonia vaccines for low-income countries. With Frontier, the AMC model is applied for the first time to scaling technologies to tackle the climate crisis. With the Frontier platform, it aims to show researchers, entrepreneurs and investors the scale of market demand for reducing the amount of carbon in the atmosphere.
Going to zero carbon takes courage and determination
Bengi Korkmaz, partner at McKinsey & Company, who said this milestone in his statement on Frontier is a turning point for the goal of net zero carbon emissions, said: “As McKinsey, we are trying to lead the way to net zero with our research and reveal the magnitude of the transformation. We covered the issue extensively in the Net Zero Emissions report. Our research and studies clearly show that the fundamental transformation of the global economy and the transition to net zero emissions cannot be delayed to limit global temperature. rise to 1.5°C and end the climate emergency. “The world needs to show courage and determination on this issue. The main objective of the Frontier platform, which we have set up with the world’s leading technology companies, is to encourage entrepreneurs working on capture technologies carbon and help them move forward more decisively.”
McKinsey & Company partner Eren Çetinkaya explained that they were working on a similar version of the net zero transition report prepared globally, focusing on Turkey. “We have started working on a long-term climate change scenario that will reflect Turkey’s climate goals. In light of Turkey’s sustainability goals and current trends, we are looking at more than 50 business areas and more of 150 sustainable technologies in 8 sectors”, continued his remarks.
Murat Gürsoy, partner at McKinsey & Company, said in a statement on the subject: “Research studies of our report on the transition to net zero emissions, in which we focus on Turkey, are progressing rapidly. With this study , we design the most appropriate climate action plans for Turkey to reach the zero emissions goal.” We break down the goal to the sector and business area level, and detail the steps to be taken on this path. and green business opportunities. We sincerely believe that Turkey can solve the net-zero equation problem by showing the necessary determination,” he said.
Removing carbon dioxide from the atmosphere, which is one of the most important causes of global warming, is of great importance to successfully combat climate change. Recent reports from the Intergovernmental Panel on Climate Change (IPCC) reveal that gigatons of carbon must be removed from the atmosphere every year to keep global temperature rise to 1.5°C. Despite significant advances in technologies for capturing carbon from the atmosphere, more is needed to achieve the required scale. By 2021, less than 10,000 tonnes of carbon dioxide have been permanently removed from the atmosphere by these technologies. According to models produced by the IPCC, the amount of carbon dioxide in the atmosphere must be reduced by an average of 6 billion tonnes per year by 2050 to reach the 1.5°C target. It is expected that interest in carbon capture technologies will increase thanks to Frontier AMC, which guarantees the purchase of the technologies developed.
How will Frontier work?
The due diligence platform Frontier will do its work on behalf of companies that want to buy carbon emissions in two ways.
• It will enter into low-volume pre-purchase agreements on behalf of corporate buyers with suppliers working on new and still early-stage carbon capture technologies.
• Frontier will also facilitate agreements with corporate buyers for growth-stage vendors adapting their technologies. Promising to buy tons of carbon emissions in the future, Frontier will provide financing to suppliers to expand their distribution.
Aiming to identify technologies with long-term potential in carbon capture through its surveys, Frontier will regularly provide guidance and support to vendors working on these technologies during their development processes as well as their procurement.
Support will also include paying higher starting prices per tonne to accelerate technologies that meet certain criteria. Among these criteria,
– Permanent carbon storage (> 1000 years)
– Use carbon storage that provides benefits beyond limiting arable land
– Carbon capture costs are affordable when technology evolves (
– Sufficient carbon capture capacity to be an integral part of the climate change solution (> 0.5 gt/yr)
– Deliver meaningful environmental justice outcomes with a robust process and focus on local community engagement
Frontier, a wholly owned subsidiary of Stripe, is expected to be funded by tens of thousands of companies buying carbon emissions through Stripe Climate. This should make Frontier the world’s largest buyers’ coalition, by funding and membership, in collecting carbon from the atmosphere.
Frontier Platform Founders
McKinsey Sustainability is the company’s customer service platform, established within McKinsey & Company to help transform all industry sectors to achieve net zero carbon emissions by 2050 and halve carbon emissions by 2030. This platform, which provides consulting services in the environmental, social and governance (ESG) field, as well as on issues such as sustainability and the energy transition, offers effective recommendations for customers at all levels, from production facilities to the board of directors. McKinsey Sustainability leverages a strong ecosystem of thought leadership, innovative tools and solutions to drive a wave of innovation and economic growth that puts sustainability at its core.
Stripe announced that it would begin its carbon capture acquisition in August 2019 with an initial commitment of $1 million. Today, tens of thousands of Stripe users dedicate a portion of their earnings to purchasing carbon capture through Stripe Climate. To date, Stripe and its users have committed to purchasing $15 million from 14 carbon capture initiatives in North America, Europe and the Middle East.
With a long history of corporate leadership in climate action, Google succeeded in making its operations carbon neutral in 2007. In 2017, it became the first major company to obtain 100% of its electricity consumption from of renewable energies. Alphabet, the parent company of Google, is now aiming to achieve net zero emissions across its operations and value chain by 2030. In order to achieve this goal, it plans to invest in capture solutions nature-based and technology-based carbon solutions to reduce carbon emissions to 2019 baseline data, as well as neutralize remaining emissions.
Shopify launched its Sustainability Fund in 2019 to accelerate its decarbonization solutions. Since the fund’s inception, Shopify has committed $32 million to 22 tech-focused startups. It has also become one of the largest carbon capture buying companies, with 39,380 tonnes purchased to date. In addition to the data centers and offices of Shopify, a carbon-neutral company, 100% renewable energy is used even in the homes of remote workers, which are used as offices. The company also relies on its verified resources to neutralize travel-related carbon emissions, which represent 5 times its operational footprint. Any business powered by Shopify can automatically neutralize shipping emissions with the company’s carbon capture app. Every time a customer places an order using Shop Pay, Shopify funds carbon capture technologies to erase the carbon footprint of that consumption at no additional cost.
Aware of the effects of climate change, Meta has been pursuing its efforts to minimize these effects for more than 10 years. Meta, which has reduced its operational carbon emissions by 94% compared to 2017, has also achieved net zero carbon emissions by meeting all of its energy needs in its global operations with 100% renewable energy since 2020. Meta, which also aims to be water positive by 2030, is committed to collaborating to help develop new solutions to capture carbon from the atmosphere. This includes engineering solutions such as direct carbon capture as well as support for the restoration of forests and green spaces.
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