Materials value chains are complex and span the entire globe, and they represent 20 percent of global greenhouse gas (GHG) emissions. To reach net-zero targets, the world is undergoing a materials transition in tandem with the ongoing energy and mobility transitions.1
Organizations around the world are making net-zero and circularity pledges to support this transition and decarbonize. Increasingly, consumers and governments are championing regulations and policies that promote a circular economy, signaling a paradigm shift in public sentiment toward sustainable practices, which fundamentally strengthens the business case for transitioning to low-carbon, circular materials. However, many companies experience challenges in building integrated perspectives about materials value chains because of, among other factors, the broad scope of materials they use and limited visibility on operational drivers and interdependencies, especially further upstream in the value chain.2
This series aims to shed light on decarbonization and circularity opportunities across materials’ value chains—such as those for plastics, copper, aluminum, rare earth elements, and glass—to help companies navigate the materials transition.
Materials Circularity
This series by McKinsey is a practical resource for leaders looking to build circular value chains.
For the chosen materials, we explore the main sources of emissions, untapped circular materials pools, potential decarbonization pathways and their technical and economic feasibility, and key unlocks to scale decarbonization and circularity. These insights can help downstream companies work with their supply chains to drive change, all with the goal of achieving emission-reduction targets, managing limited resources, and meeting circularity objectives (a key lever to decarbonization) in a cost-efficient way. To create a common fact base for discussion among stakeholders, this article offers a high-level primer on the challenges and opportunities of decarbonization and the creation of circular materials value chains.
Apple and McKinsey unlock low-carbon sourcing
How recycled materials drive greener supply chains
Low-carbon, circular materials are critical to lowering the emissions footprints of complex products. As the momentum behind environmental regulations and public demand for sustainable solutions intensifies, businesses that proactively align with these shifts by embracing low-carbon, circular materials will not only help mitigate climate change but also capture competitive advantages in evolving markets. With respect to the availability and cost of materials, collaboration will be critical to scaling solutions. By highlighting areas in which companies can be most effective in the short term and strategize for the long term, this article series provides a jumping-off point for discussions across value chains.
