Takeaways

• The green economy has crossed $10 trillion in market capitalization, making it the world's third-largest sector by value.
• Strong growth in green bonds, clean energy investments, and corporate sustainability continues despite changing policy environments.
• Companies generating a higher share of green revenues are delivering stronger financial performance than many of their traditional peers.

The global green economy has reached a major milestone, surpassing $10 trillion in market capitalization, according to the latest LSEG report. If treated as a standalone industry, it would now rank as the world's third-largest sector, overtaking healthcare and trailing only technology and industrials.

The report also found that the green economy now represents 9.9% of all global listed equities, reflecting the continued expansion of businesses focused on environmentally sustainable products and services. Revenue increased across 99 of the 133 green product and service categories tracked by LSEG, highlighting the broad-based growth of the sector.

Despite policy shifts in several countries, including the United States stepping back from international climate commitments and reducing support for certain clean energy incentives, investment in sustainable businesses has remained strong. The United States continues to dominate the global green market, accounting for 57% of worldwide green market capitalization.

Read More: Report: Green Economy Expands Quickly, but Short-Term Risks Remain

Corporate demand for renewable electricity has also accelerated. Technology giants Meta, Amazon, Google, and Microsoft were responsible for nearly half of all corporate clean power purchase agreements (PPAs) signed during 2025, reinforcing the private sector's growing role in expanding clean energy.

Jaakko Kooroshy, Global Head of Sustainable Investment Research at LSEG, said the green transition has entered a new stage where energy security and economic competitiveness are becoming just as important as reducing carbon emissions. This shift suggests that sustainability is increasingly being viewed as a long-term business strategy rather than only an environmental objective.

The report highlights the impressive financial performance of the green economy over the long term. Since 2008, the sector has outperformed global equity markets by 133%, delivering a compound annual growth rate of 18%, compared with 12% for the broader market. Growth has also picked up in recent years, with the green economy nearly doubling its growth rate between 2023 and 2026 compared to the previous three-year period.

Another area showing strong momentum is the green bonds market. Issuance reached a record $605 billion in 2025, a 5.7% increase over the previous year. Corporate issuers accounted for more than two-thirds of total green bond issuance, while projects related to energy management and efficiency represented the largest share of the $3.3 trillion in outstanding green bonds recorded during the first quarter of the year.

The report also suggests that sustainability is becoming a financial advantage. Among approximately 4,000 FTSE-listed companies, businesses earning more than half of their revenue from green activities reported stronger operating profitability than comparable firms with limited green exposure. Companies still in the early stages of transitioning to greener business models, however, often experienced lower returns as they absorbed the costs of transformation.

Green mergers and acquisitions are also becoming larger in scale. Between 2023 and 2025, the average green transaction reached $257 million, significantly exceeding the average value of non-green deals. Industrial and utility companies accounted for more than half of the total value of green acquisitions, with utilities emerging as one of the most active sectors driving sustainable investment.

Also Read: Sustainable Finance Market Size Set to Double by 2031, Green Bonds Dominate

The findings indicate that the green economy is not only expanding rapidly but is also becoming a major force shaping global investment, corporate strategy, and long-term economic growth.

Follow more news and views via our Sustainable Finance & Technology and Featured Articles sections, and stay updated on the top ESG events to attend in 2026 for industry insights and networking.

If you're looking for suitable ESG and Sustainability providers to share customized solutions specific to your business needs, you can check out KnowESG's Solutions page.

If you are an ESG provider looking to get your organization listed on our portal, visit this page.

Source: ESGDIVE