From Poverty to Empowerment – A Sustainable and Inclusive Growth Approach

The McKinsey Global Institute’s report From Poverty to Empowerment examines how economic growth, inclusion, and sustainability are interconnected. The study highlights the importance of lifting people out of extreme poverty while ensuring environmental sustainability, particularly in a decade that will shape global development until 2050. It introduces the concept of an “empowerment line,” set at $12 per day in purchasing power parity (PPP) terms, as a higher benchmark for measuring progress beyond extreme poverty. The report outlines how global efforts in economic growth and investment in sustainability can bridge gaps in living standards while addressing climate challenges.

Key Findings

The report identifies two major global challenges: empowering billions of people to meet their basic needs and transitioning to a net-zero economy. As of 2020, 4.7 billion people were below the empowerment line, with 730 million still living in extreme poverty. The study argues that simply eliminating extreme poverty is insufficient; instead, societies must aim for economic security, where individuals have stable access to essential services like healthcare, education, and housing. Achieving this requires a 40% increase in the spending power of those below the empowerment line by 2030.

The dual goals of economic empowerment and net-zero carbon emissions require substantial financial commitments. The report estimates that bridging the empowerment and sustainability gaps would necessitate an additional $37 trillion in consumer spending and $41 trillion in low-emission investments. These combined spending needs equate to approximately 8% of global GDP annually. Business-led innovation and productivity-driven growth can generate about half of the required resources, but additional public and private investments will be necessary to fully close these gaps.

Despite market-driven solutions, the report warns of remaining financial shortfalls and difficult trade-offs. While economic growth could lift 2.1 billion people above the empowerment line and 600 million out of poverty, climate-related investments will be crucial to ensuring sustainable progress. A disorderly transition to net-zero emissions could disproportionately impact lower-income populations due to rising energy costs. However, inaction on climate change would lead to severe economic and social consequences, particularly for vulnerable populations.

The report highlights that economic empowerment and climate action must be pursued in tandem to achieve long-term global stability. Growth alone cannot fully address the empowerment and net-zero gaps, requiring public-private collaboration, financial mechanisms, and policy innovations to ensure inclusivity and sustainability. Investments in sustainable infrastructure, education, and technological innovation are essential to enabling economic security and environmental resilience. Achieving these goals will require collective global efforts to drive equitable and sustainable economic transitions.

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RESET Foundation is committed with the The Sustainable Development Goals (SDGs). The report highlights that economic empowerment and climate action must be pursued in tandem to achieve long-term global stability. The McKinsey Global Institute’s report is linked to several SDGs:

The SDG'sG's, also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.