THE global green economy has surged into a $5 trillion annual market, establishing itself as the world’s second-fastest growing sector, only surpassed by technology.
This massive market is projected to exceed a staggering $7trn within the decade. This is the key finding of a new report, ‘Already a Multi-Trillion-Dollar Market: A CEO Guide to Growth in the Green Economy,’ developed by the World Economic Forum (WEF) in collaboration with the Boston Consulting Group (BCG). WEF’s head of climate and nature economy Pim Valdre said the report shows the green economy is not a “distant opportunity but already a major growth engine of this decade.”
Despite global economic uncertainty and fluctuating environments, investment in green technologies continues to reach record highs. Companies focused on sustainable solutions are seeing significant financial benefits: their green revenues are growing, on average, two times faster than conventional business lines across the market, and the cost of capital for these companies is typically lower.
Furthermore, firms generating more than 50 per cent of their revenues from green markets often enjoy valuation premiums of 12pc-15pc on capital markets, reflecting investor confidence in their long-term resilience and profitability.
Technological innovation and mass production are key drivers of this growth, making low-carbon solutions increasingly cost-competitive. Since 2010, the cost of solar photovoltaics (PV) and lithium batteries has fallen by approximately 90pc, while offshore wind costs have dropped by 50pc over the same period. The report estimates that 55pc of the global emissions reductions required for decarbonisation can now be achieved with solutions that are already cost-competitive. While 20pc of the remaining solutions are addressable at minor cost premiums, a critical 20pc of deep decarbonisation technologies currently face major cost disadvantages and require dedicated policy support to become cost-competitive.
The surge in clean energy investment is increasingly driven by China, which is cementing its role as a global leader in the sector. In 2024, China invested $659 billion in clean energy and is responsible for over 60pc of new global renewable capacity additions projected through 2030. The nation leads the world in patents for solar, electrical vehicles (EV), and battery technologies, a shift that is reshaping global supply chains and moving the centre of green innovation to the East.
BCG’s managing director and senior partner Patrick Herhold concluded that with the market projected to hit $7trn, there will be many opportunities for companies that “act boldly today”. The report includes a CEO playbook and 14 case studies to show how pioneering companies are turning green market participation into a competitive advantage.
avinash@gdnmedia.bh
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