Making the Green Transition Work for People and the Economy 2025

Foreword The global economy is shifting. Geoeconomic diversification and technological transformations are disrupting established patterns of trade, growth and development. The financial landscape has changed alongside higher inflation and cost of capital, and in some countries, inequality has risen. This evolving global context could have real socioeconomic impacts and, therefore, for climate action to succeed, decision-makers must adapt. A well-executed transition must mitigate risks to competitiveness, minimize potential socioeconomic burdens and amplify co-benefits. Thoughtful consideration is needed to design strategies that align climate action with economic and societal priorities. In an increasingly complex geopolitical, macroeconomic and social environment, advancing the green transition requires closer alignment with national economic security considerations, a stronger focus on local value and employment generation, and a greater emphasis on demonstrating the economic feasibility of climate projects. This collaborative publication furthers the work of the World Economic Forum’s Equitable Transition Initiative and McKinsey Sustainability’s Climate Transition Impact Framework, underscoring the need to meaningfully consider socioeconomic impacts in public and private climate action to accelerate an inclusive green transition. The report examines the changing global context affecting climate action, and competitiveness barriers and socioeconomic risks associated with the green transition across a set of countries and green transition sectors. Finally, the report concludes with considerations for corporate leaders to align their climate strategies with positive social and economic outcomes. Organizations that fail to address the socioeconomic dimensions of their climate transitions may risk undermining their long-term objectives, social license and shareholder value, while those that proactively advance inclusive and resilient outcomes could strengthen competitiveness, unlock new market opportunities and position themselves as leaders in emerging value chains. We thank the Laudes Foundation for their support, and the Global Future Council on Equitable Transition for their guidance. Insights in this report reflect input from a series of high-level dialogues and consultations with organizations engaged with the Equitable Transition Alliance. This publication will inform continued efforts by the World Economic Forum’s Equitable Transition Initiative, which works towards ensuring transition plans, investments and business strategies solve for both people and the economy.Making the Green Transition Work for People and the EconomyNovember 2025 Attilio Di BattistaHead of Economic Growth and Transformation, World Economic Forum Harsh Vijay Singh Head, Equitable Transition Initiative, World Economic ForumCindy LevySenior Partner, McKinsey & Company Hemant AhlawatSenior Partner, McKinsey & Company Making the Green Transition Work for People and the Economy 3