Demand for green products is set to reduce over the medium term despite the “resilience” of sustainability as a priority for company boards, a partner at McKinsey has suggested.
Speaking at the LME Week conference on Monday, Alex Kazaglis, a partner at McKinsey & Company, said recent research by the management consultant showed demand for green products increasing in the short-term before declining.
Kazaglis told the conference: “What we found was that demand for green products had gone up in 2025 between 3% and 8% across steel, aluminium and copper but our long-term forecast for demand has actually gone down so by 2030, we’re expecting 30% of materials to be green rather than 40%.”
Speaking to Hugo Brodie, the head of Sustainability and Physical Market Development at LME, Kazaglis said the McKinsey report found a resurgence in demand for green products in Asia while “North America customers are more about security of supply rather than green premia and Europe is actually green”.
Brodie went on to ask if more needs to be done to define sustainability and Kazaglis mentioned “separating carbon out from the other characteristics”.
He continued: “Carbon is increasingly a marketed commodity in and of itself. As we move into that world year-after-year and, as those mechanisms come up, it will be a commodity traded in its own right.”
Kazaglis added: “What I am personally struck by is the resilience of these issues. If you were just to read the papers, you’d think there had been a death of these issues in board rooms but it gets talked about a lot.
“For a lot of these industries because of the long lead-times and the CapEx involved, these commitments are not unwound and put back into place within a 12 month period. These are through-cycle commitments.”
