The latest Green Economy Report from the London Stock Exchange Group (LSEG) estimates the global green economy is now worth $7.9 trillion, representing 8.6% of listed equity markets. This valuation reinforces a clear message: environmental sustainability is no longer a niche area, but a significant driver of economic activity and investment.
The green economy includes businesses that derive over 50% of their revenue from environmentally beneficial products and services, ranging from clean energy and efficient transport to waste management and sustainable infrastructure. According to the LSEG report, green revenues have surpassed $5 trillion, and the sector’s market capitalisation has grown at a compound annual rate of 15% over the past decade, second only to the technology sector.
If treated as its own sector, the green economy would rank as the fourth largest globally, following technology, industrials, and healthcare. This growth has been supported by strong capital flows into green bonds and rising demand for climate adaptation solutions.
Implications for Businesses
For companies, this valuation is a clear indicator of where markets are heading. It shows sustained investor interest in businesses with strong environmental profiles, even amid broader market volatility. Green equities have consistently outperformed their benchmarks over the long term and are increasingly integrated into mainstream investment strategies.
The takeaway for businesses is straightforward: staying aligned with the transition to a low-carbon economy is becoming a core part of commercial resilience and long-term value creation. This involves not only meeting regulatory and disclosure requirements, but actively identifying opportunities in energy efficiency, sustainable operations, and climate-related risk mitigation.
A Structural Economic Trend
This is not just a short-term investment theme. LSEG’s data highlights that green investment is underpinning a structural shift in global capital markets. The rise of climate adaptation finance, in particular, is opening new pathways for business innovation. In 2024 alone, green bond issuance reached a record $572 billion, with more than a quarter of that directed towards climate resilience projects.
Moving Forward
As governments and institutions commit to climate goals, and as the physical impacts of climate change intensify, the role of the green economy will continue to expand. Businesses should take this valuation as a signal to assess where they sit in the broader transition—and how they can position themselves to remain relevant, competitive, and aligned with global economic trends.
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