Global green economy now worth $7.9tn according to report

Latest research from London Stock Exchange Group (LSEG) hails sustainability sector as one of the fastest growing globally, just a few percentage points behind technology

Despite geo-political challenges and ongoing market volatility, the value of the global green economy has rocketed from $7.2tn in 2024 to a whopping $7.9tn this year.

The data is from the London Stock Exchange Group’s (LSEG) annual report entitled Investing in the Green Economy, which revealed that expansion has been even faster in valuation terms, with market capitalisation of the Green Economy growing at 15 per cent CAGR, compared to the Technology Sector’s 18 per cent.

According to the figures, the global green economy, if considered as a standalone sector, would account for 8.6 per cent of listed equities, with a combined market capitalisation of $7.9tn, making it the fourth largest sector globally behind Technology, Industrial Goods and Services, and Healthcare. It also spans 50 markets globally, the report claimed.

Interestingly, the report explained that while the green economy is a genuinely global one, emerging markets are growing at almost twice the rate of developed ones, with CAGR of 14 per cent. Leading the global field is the Americas, but the report said Asia generates most of the global green revenues, accounting for 44 per cent of the total.

However, the future is positive for the green economy, with the research claiming that addressing climate change will require a cumulative investment of between $109tn and $275tn by 2050.

Four key areas accounting for nearly 75 per cent of the current market: technology, industrial goods and services, automobiles and parts, and utilities.

EVs and battery manufacturing under the ‘automobile and parts’ sector, have seen a significant shift since 2019, growing to 53 per cent in Q1 2025, compared to 16 per cent in 2019.

Technology has been the largest sector in the green economy since 2021 according to the report, generating revenue from cloud computing and semiconductors, plus other areas, and making up 30 per cent of the green economy at a market value of $2.4tn.

Energy Management and Efficiency, which includes green buildings, cloud computing and power electronics, accounts for almost half of the green economy by market capitalisation, now worth a whopping $3.6tn in Q1 2025.

Energy generation (renewable energy) accounts for seven per cent of the green economy, with energy equipment accounting for six per cent.

“The green economy is a key investment theme for many investors who focus on the growth opportunities associated with solutions to environmental issues,” the report said. “To create broader climate and sustainable investment strategies, investors can focus directly on green equities through thematic funds or baskets, or incorporate green revenues alongside other sustainable investment data such as carbon intensity or transition scores.”

The report can be downloaded here.