Green economy now generates more than US$5tn of revenue a year for investors

Data shared this week by the London Stock Exchange Group shows that revenue from green products and services has more than doubled over the past 10 years, reaching US$5.1 trillion in 2024.

This is a milestone for the global green economy, which is valued at US$7.9 trillion in Q1 2025. 

In ‘Investing in the green economy 2025’, LSEG suggests that the accelerating energy transition, coupled with growing investment in climate adaptation and resilience, will continue to underpin strong growth in green products and services.

The financial market infrastructure provider defines the green economy as “products and services with environmental benefits” as per its Green Revenues Data Model – which measures the green revenue exposure of more than 20,000 listed companies across 50 developed and emerging markets.

LSEG notes that if considered a standalone sector, the green economy would be the fourth largest global sector, after technology, industrials and healthcare.

Long-term performance, short-term volatility

The report, based on proprietary LSEG data, shows that the green economy tends to demonstrate strong long-term performance, despite being prone to short-term volatility. 

Over the last five years, the FTSE Environmental Opportunities All Share Index (EOAS) – a “representative basket of green equities and a reliable proxy for the green economy” according to LSEG – has outperformed the Global All Cap Index by 5.6% on average. And since 2008, the EOAS has outperformed the benchmark by 59%.

However, the rolling 12-month performance of the index shows more ups and downs. “Green industries (...) tend to exhibit a positive beta to broader markets and typically outperform during market rallies but underperform in downturns. This pattern is influenced by both the cyclical nature of the capital goods sectors, which form an important part of the green economy, and by shifts in government policy. The latter can amplify market swings through changes in subsidies, regulation and trade policy,” LSEG writes.

Green economy: Second-best performing sector

Again if considered a standalone sector, green products and services would be the second-best performer among all industries within the FTSE All World Index over the last 10 years. 

In 2024, the green economy was the fourth best-performing sector after technology, financials and consumer discretionary. It also outperformed the traditional energy sector most of the time since 2022, except for two small stints of underperformance related to short-term oil price spikes.

In fact, LSEG notes that the green economy outperformed the energy industry by 149% over the 10 years to April 15, 2025, despite underperformance in 2021 and 2022