Green Economy Exceeds $10 Trillion as Revenue Growth Accelerates -

The green economy — which includes the sectors of publicly traded companies dedicated to climate solutions — has achieved an astounding market value of $10 trillion.

This increase aligns with the revenue from environmental products and services reaching $5.5 trillion last year, representing the fastest growth since 2022, as reported by the London Stock Exchange Group Plc on Wednesday.

Investors have reacted favorably to this surge: Companies generating over 20% of their revenue from green initiatives have outperformed the broader equity market, according to LSEG. The S&P Global Clean Energy Transition Index has jumped more than 80% since the end of 2024, significantly outpacing the S&P 500’s growth.

Despite rising geopolitical tensions and some leading economies, especially in the US, scaling back on climate pledges, green sectors have exhibited remarkable resilience. This is partly attributed to the energy transition entering a new phase, spurred by security and economic competitiveness alongside decarbonization efforts, as highlighted by LSEG.

For those investors feeling disillusioned with green stocks, recent sector growth presents “an urgency to reassess” their portfolios, stated Jaakko Kooroshy, the global head of sustainable investment research at LSEG, in an interview.

LSEG defines the green economy as the segment of companies’ revenues generated from environmental solutions, which encompass renewable energy, clean water, energy efficiency, and recycling. The firm assessed the revenue exposure to green business activities for over 21,000 companies worldwide.

Revenue growth was widespread in the past year, with 99 out of 133 categories of green products and services reporting increases. Electric vehicles and advanced batteries were identified as “noteworthy,” adding an additional $62 billion in revenue, according to LSEG.

LSEG also examined mergers and acquisitions, indicating they are “becoming an increasingly vital avenue for expediting the low-carbon transition.” Green-related M&A activity reached $4.1 trillion over the past decade, accounting for nearly 13% of the total global deal value, according to LSEG.

This year has seen ongoing deal-making, highlighted by NextEra Energy Inc.’s agreement to acquire Dominion Energy Inc. for approximately $67 billion in stock. This deal would create “one of the largest green energy giants in North America,” according to Kooroshy. “While it’s not solely a green initiative, it constitutes a major green energy entity.”

Together, NextEra and Dominion would generate over $15.9 billion in green-related revenue from wind, solar, nuclear, and battery storage, LSEG noted, which would comprise about 36% of the newly formed company’s total revenue.

Even with a policy shift emphasizing domestic oil and gas extraction, the US continues to be the leading green economy in terms of market capitalization, encompassing 57% of the global total, as per LSEG.