Weeks before African leaders travelled to Nairobi for the continent’s first climate summit in September, climate justice groups wrote to Kenyan president William Ruto accusing consultancy firm McKinsey of “undue influence” on the summit’s agenda.
The American firm had offered Ruto support in running the summit during a meeting with him and US ambassador to Kenya Meg Whitman in late May, several sources told Climate Home News.
A few days later, in early June, McKinsey wrote the concept note, which set the summit’s structure, and later drafted a paper to frame its outcome.
“For a few weeks, it was their way or the highway,” a source close to the summit’s organisation told Climate Home.
At the time, the Kenyan government said civil society accusations that Mckinsey had captured the summit were “extremely far from the truth”. McKinsey said the claims were “inaccurate”.
But the backlash publicly exposed the influence McKinsey wields on Africa’s climate agenda – a position it would prefer to keep discreet.
Leaked documents
Now, Climate Home has obtained leaked documents and interviewed multiple sources, who have asked to remain anonymous because of the sensitivity of the issue.
They show how McKinsey dominates an ecosystem pushing carbon markets in Africa and processes designed to help governments develop long-term energy plans.
This has been facilitated by McKinsey’s deep-rooted ties with Sustainable Energy For All (SEforAll), which is responsible for delivering on a 2030 sustainable development goal for everyone to have access to affordable, reliable and sustainable energy; and the Global Energy Alliance for People and Planet (GEAPP), which works to accelerate the energy transition.
Climate Home’s investigation reveals that SEforAll staff complained of CEO Damilola Ogunbiyi’s “preferential treatment” of McKinsey in a whistleblower report in 2020.
That year, SEforAll brought in the firm to facilitate a leadership retreat and develop the organisation’s business plan. At the time, SEforAll’s top management dismissed the allegation.
Three years on, documents show how McKinsey has turned initial pro-bono work into lucrative contracts.
A source close to SEforAll told Climate Home that McKinsey encountered hardly any competition and enjoyed “almost unrestricted access to the highest levels of the UN and national governments”.
An SEforAll spokesperson said: “All SEforALL processes are followed at all times in the selection and engagement of any advisory services,” adding that any idea to the contrary was “baseless”.
“Come to take over”
African government insiders say McKinsey’s domination is problematic because it is pushing a top-down tunnel vision and non-Afro-centric view of how to address the continent’s climate and development challenges, which, if unquestioned, could constrain its ambition.
“The role of McKinsey is highly problematic because they don’t come in a capacity support role, they come to take over,” said one source.
There is a role for consultants to help governments and international organisations plug skill and knowledge gaps.
But consultancies should advise “from the sidelines in a transparent way… rather than be allowed to run the show from the centre,” economist Mariana Mazzucato and researcher Rosie Collington write in their book about the consulting industry The Big Con.
Michael Marchant is head of investigations at Open Secrets, an NGO which advocates for private sector accountability and investigated McKinsey’s work in South Africa.
He told Climate Home that despite receiving large amounts of public money, large consultancy firms like McKinsey “operate in secrecy and with almost no public accountability”.
Heart of climate governance
Yet, allowed in by governments, McKinsey has found a place at the heart of critical climate governance processes. France24 recently reported that McKinsey is pushing fossil fuel interests in its advisor role to the UAE, which will preside over the Cop28 climate talks in Dubai starting next week.
The company’s client list includes some of the world’s biggest fossil fuel companies, including Saudi Aramco, Chevron, ExxonMobil, and Shell, according to court filings in the US, where McKinsey is being sued alongside Big Oil. McKinsey rejects the accusations.
In more recent years, McKinsey has advised polluters, including oil and gas companies, on how to use the carbon market to offset their emissions or raise revenue. A 2022 internal McKinsey document, seen by Climate Home, names Chevron and BP among clients of its carbon market business line.
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In Africa, the consultancy is behind a push to significantly grow the continent’s carbon offset offering, working closely with both GEAPP and SEforAll.
In 2021, McKinsey supported the Rockefeller Foundation to design and establish GEAPP, according to a McKinsey document seen by Climate Home. The following year, GEAPP asked SEforAll to hire McKinsey to develop the African Carbon Market Initiative for $1.5 million as part of its grant to the organisation, Climate Home understands.
Launched at Cop27 in Egypt, the initiative aims to scale carbon markets on the continent 19-fold by 2030.
While GEAPP and SEforAll publicly sponsored the initiative, McKinsey described its role in a sustainability report as “shaping and refining the initiative’s ambition” and “developing its strategy”. McKinsey’s concept note for the Africa Climate Summit elevated carbon markets to a core theme.
President Ruto appointed Joseph Ng’ang’a, GEAPP’s vice president of Africa, CEO of the summit.
President William Ruto has appointed Mr Joseph Ng’ang’a, Vice President of Africa at the Global Energy Alliance for People and Planet (GEAPP, as Chief Executive Officer of the inaugural Africa Climate Summit, which will take place in Nairobi from 4- 6 September 2023.… pic.twitter.com/eKtjGri5s8
— Kenyan Wallstreet (@kenyanwalstreet) June 12, 2023
Climate campaigners denounced the focus on carbon markets as “a dangerous distraction” from African climate priorities and accused McKinsey of working to protect the interests of its western corporate clients.
McKinsey has repeatedly dismissed these allegations, arguing there is no way to deliver emissions reductions without working with high-emitting industries and that it has rigorous policies to manage conflict of interests.
A spokesperson for the company said “sustainability is a mission-critical priority for McKinsey”, which has “committed to rapidly scale this work to help clients in all industries reach net zero by 2050”.
A GEAPP spokesperson said it was established “to unite a diverse range of partners” to rapidly facilitate a global shift towards renewable energy. In doing so, it “leverages a spectrum of… experts and consultants”.
A close relationship
McKinsey’s rapidly growing climate work in Africa has been facilitated by a close relationship between its African Sustainability Practice lead Adam Kendall and SEforAll’s CEO Ogunbiyi, who also serves as a UN special representative for sustainable energy.
Before joining SEforAll, Ogunbiyi worked closely with Kendall, who led McKinsey’s natural gas practice in Lagos, Nigeria. He helped build the Nigerian vice president’s advisory power team and worked with the Rural Electrification Agency, which Ogunbiyi both headed.
A McKinsey document describing its previous work for SEforAll said the firm “provided strategic support to Ms. Ogunbiyi during her transition” into her new CEO role, starting in January 2020.
Weeks later, Kendall was invited to co-facilitate an SEforAll leadership retreat in London and subsequently developed the organisation’s 2021-2023 business plan, effectively for free.
Thanks @Shell for hosting our Leadership Team meeting and @RockyMtnInst and @McKinsey for facilitating #SEforALL 3.0 strategy in making. pic.twitter.com/BPue9Fhyez
— Sustainable Energy for All | #SDG7BeBold (@SEforALLorg) January 24, 2020
The same year, McKinsey seconded employee Ugo Nwadiani to SEforAll. An SEforAll recruitment note shows he was directly appointed Ogunbiyi’s special assistant.
Whistleblower report
An anonymous complaint prepared by several SEforAll staff raised concerns about these developments.
A source said the complaint was backed widely among employees and sent to the organisation’s whistleblowing account and to one of its major funders.
It described “a culture of fear” at SEforAll, and accused Ogunbiyi’s leadership of being “marked by favouritism”, including towards McKinsey.
During the business planning process, McKinsey “had direct access to SEforALL financial information and organizational systems and processes” putting the company “in a privileged position” to apply for any future tender, it said.
It raised concerns that McKinsey had been the only firm asked to comment on terms of reference for work to update Nigeria’s integrated energy plan which SEforAll was seeking to contract out. McKinsey had worked with the Nigerian government on the first version of the plan the previous year. It was eventually hired for the job.
Responding to the complaint at the time, SEforAll’s management said it had strengthened procurement oversight and put in place mechanisms to help “create a climate of trust”.
Since then, SEforAll has hired McKinsey to work on at least three of its five core initiatives in Africa: developing energy transition plans, scaling up the carbon market, and boosting renewable energy manufacturing capabilities.
Francesco Starace, chair of SEforAll’s governance board, said the board was satisfied with the outcome of a review process following the complaint. “We are confident with the integrity of the SEforALL procurement process and the leadership demonstrated by the CEO and the executive management team,” he said.
McKinsey’s work in Nigeria
McKinsey’s extensive work for SEforAll in the early days of Ogunbiyi’s leadership set it up for further opportunities.
In Nigeria, McKinsey provided the modelling which underpins the country’s energy transition plan pro bono, working with SEforAll and the former government. A new government, which came into office in May, has warned that it will need a lot more investment to deliver
Chukwumerije Okereke, a Nigerian climate governance expert, said the exercise was a “cautionary tale”. The use of McKinsey-owned tools prevented robust scrutiny of the assumptions in the model, he told Climate Home. And the “closed door” process and lack of consultation may partly explain diminished political momentum to implement it, he added.
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More recently, SEforAll and Kendall’s McKinsey team have sought funding to develop energy transition plans in up to ten developing countries, according to a 2021 joint concept note for funders, obtained by Climate Home.
With support from Bloomberg Philanthropies, the pair has developed a plan for Ghana, and is working to do the same in Kenya and Barbados using a joint open-source model. In Kenya, draft plans, seen by Climate Home, would increase gas power capacity in the 2040s.
SEforAll told Climate Home these plans were procured through an open and transparent process, rigorously peer reviewed and subject to civil society consultations.
For Okereke, international consultants can bring quality and gravitas to energy planning. “But it’s about the way they do it.”
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June Rubis is a steering group committee member for the Cali Fund, from Sarawak in Malaysian Borneo.
At COP16 in Cali, governments made a significant commitment: at least half of the funding from the new Cali Fund should support the self-identified needs of Indigenous Peoples and local communities, including women and youth. It was a watershed moment for multilateral benefit-sharing.
The challenge now is to translate that commitment into access arrangements that recognise the different institutions, priorities and decision-making processes of Indigenous Peoples and local communities.
For generations, biodiversity and traditional Indigenous knowledge have provided significant value to companies who depend on nature’s genetic diversity to discover new drugs that fight diseases, create products that improve health, and grow crops resilient to extreme heat and flooding events. While some compounds are sampled directly from the source country, increasingly the digital blueprints are held in online public databases which are freely accessible to use for innovation and research.
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The Cali Fund was established at COP16 to encourage commercial users of Digital Sequence Information, or DSI, to share benefits arising from its use. Estimates suggest it could generate over $3.5 billion a year – a stark contrast to the modest $10,656 currently committed to the fund from just five SMEs, underlining how much progress must be made at COP17 over the next two weeks.
The COP16 decision that set up the fund offers two routes for money to reach Indigenous Peoples and local communities: through government authorities, and through direct payments to institutions identified by Indigenous Peoples and local communities themselves.
Varied ways of organising
Indigenous Peoples and local communities organise through a wide range of institutions. Some have national or regional organisations experienced in managing international grants. Others work through territorial organisations, customary institutions, community associations, cooperatives or networks. Some have professional finance teams and audited accounts; others have extensive experience governing territories, collective resources or conservation work without having been organised around international funding requirements.
For direct access, some questions are already apparent. Which institutions should be able to receive funds? How should they be identified? What fiduciary standards should apply? How should safeguards and accountability work where institutional capacities differ? What support may be needed where institutions have strong community mandates but less experience with international finance?
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If access is designed mainly around institutions that already meet the expectations of large international finance mechanisms, early funding will tend to favour those already familiar to funders. They will gain further experience and become better positioned for future funding, while institutions with less administrative capacity may remain outside the system despite strong community mandates and long histories of stewardship.
These first decisions matter most, because they set the terms for everyone who follows.
The role of intermediaries requires care. Some Indigenous organisations may want a fiscal host to hold and manage funds on their behalf. Communities may choose to work through an NGO they trust. Government-facilitated arrangements may work well in particular national contexts.
What matters is the function an intermediary performs and the authority that comes with it. Providing administrative support is different from deciding which Indigenous organisations qualify, which priorities can receive support, or how success will be assessed. Direct access means communities keep that decision-making authority.
Decision-making power
The COP16 decision refers to institutions that Indigenous Peoples and local communities identify. But authority among Indigenous Peoples does not sit in one kind of body. It may sit with territorial organisations, customary institutions, community associations or combinations of these. Legal recognition and customary authority do not always align neatly.
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An important feature of the Cali Fund’s governance is that Indigenous Peoples and local communities participate as full members of the Steering Committee, rather than as observers. Seven Indigenous Peoples and local community representatives, one from each of the seven socio-cultural regions, participate in consensus-based decision-making alongside representatives of governments and UN entities. Six additional representatives from civil society, scientific institutions and the private sector participate as observers.
That representation carries responsibility. Institutional legitimacy, access and representation take different forms across the seven socio-cultural regions. Indigenous Peoples and local communities members therefore have an important role in bringing those differences into the Fund’s governance and in ensuring that arrangements developed for one context do not become the assumed model for everyone else.
Safeguards and clear responsibilities
COP17 can establish the core principles and direction, while allowing operational pathways to develop in ways that respond to different regional contexts. The decisions countries take in Yerevan will shape how that flexibility is realised in practice.
The choices made around access will influence which institutions are able to participate, which routes become established and which forms of authority are recognised within the funding architecture. The aim should be an architecture with enough structure to maintain confidence while allowing for different forms of Indigenous and community governance.
A credible direct-access pathway will need safeguards, financial oversight and clear responsibilities. This would give the 50% commitment a stronger institutional foundation.
The Cali Fund’s importance will ultimately depend not only on how much funding reaches Indigenous Peoples and local communities, but on whether they are able to determine how the money is accessed, governed and used. This requires access pathways that recognise their institutions, priorities and decision-making processes, rather than requiring them to conform to a single predetermined model.
The post COP17 must settle who decides how Cali Fund money is disbursed appeared first on Climate Home News.
COP17 must settle who decides how Cali Fund money is disbursed
The UK government has approved extraction at the Jackdaw gas field in the North Sea, despite acknowledging that this decision could make it harder for Britain to convince other countries to move away from fossil fuel production.
UK energy secretary Miatta Fahnbulleh approved the drilling on Wednesday after months of high-profile debate, fuelled in part by interventions from US President Donald Trump. She argued that the project would boost energy security in the wake of the Middle East fossil fuel crisis, protect hundreds of jobs and add £2.9 billion ($3.88bn) to the UK economy.
She said Jackdaw’s gas would be cleaner than imported gas and would not prevent the UK from meeting its legally-binding carbon targets and its goal of net zero by 2050. As the field is already licensed, she said extraction was consistent with the Labour Party’s 2024 manifesto promise not to issue any new oil and gas licenses.
The same morning, the government announced a new Energy Wealth Fund to reinvest oil and gas revenues in the climate transition. It will start with £2 billion ($2.67bn) from the government and be topped up over time with tax revenues from offshore oil and gas production.
Climate campaigners in the UK and abroad were quick to condemn the decision, while a leading legal expert told Climate Home News it goes against the advice of the International Court of Justice. Meanwhile, the government’s own documents reveal that it recognises the drilling could damage the UK’s reputation and its ability to push forward the global transition away from fossil fuels.
“Climate leadership” blow
The 92-page decision document says Fahnbulleh “acknowledges that international standing on climate is important and accepts that a decision to grant consent may not further the UK’s international climate leadership.”
It adds: “She acknowledges concerns about the potential implications for the UK’s credibility and influence – including the difficulty inherent in encouraging other states to move away from fossil fuel production while the UK continues, in a limited and transitional way, to draw on its own domestic resources.”
While noting that Jackdaw has not been issued with a new license – just permission to extract gas – the document says Fahnbulleh “accepts this does not fully resolve the underlying tension in the UK’s position” but “considers this alongside the substance of the UK’s wider record [on emissions reduction], which remains significant”.
It continues that she accepts these concerns are “legitimate” and weigh against approving gas extraction, but only gives this argument a “moderate negative weight” set against the benefits of gas production.
“Huge” wrong signal
In international climate talks, the UK has long supported the transition away from fossil fuels and is one of very few major oil and gas producers to ban new licenses. Across the North Sea, the Norwegian government continues to make offshore areas available for oil and gas exploration through annual licensing rounds.
Climate experts and campaigners shared the concern, acknowledged in the decision document, that approving Jackdaw could set a precedent for fossil fuel production elsewhere. Sam Fankhauser, professor of climate change economics at Oxford University, said the direct climate impact of Jackdaw is “much smaller than the debate around it would suggest” but the “wrong signal it sends, however, is huge”.
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