The green economy has reached $5-trillion a year and is on track to exceed $7-trillion within the decade, a new report, ‘Already a Multi-Trillion-Dollar Market: A CEO Guide to Growth in the Green Economy’, shows.

The World Economic Forum (WEF) report, developed in collaboration with the Boston Consulting Group (BCG), indicates that, despite economic uncertainty and diverging environments, investment in green technologies continues to reach record highs.

The report identifies the green economy as one of the world’s fastest growing sectors, outpaced only by tech, and highlights the advantages companies can benefit from by embracing green solutions.

“Two years ago, in the WEF’s ‘Winning in Green Markets: Scaling Products for a Net Zero World’ report, we argued that pioneering in green markets is a bet that would pay off and that large-scale green markets would become a reality proving the business case.

“Despite the current headwinds for global climate action, this report shows that the green economy is not a distant opportunity but already a major growth engine of this decade,” WEF climate and nature economy head Pim Valdre explains.

The research shows that companies with green revenues often outperform across multiple financial metrics.

On average, green revenues grow two times faster than conventional business lines across the market, while the cost of capital for companies with green revenues is typically lower.

Firms generating more than 50% of their revenues from green markets often enjoy valuation premiums of 12% to 15% on capital markets, reflecting investor confidence in their long-term resilience and profitability, the report avers.

Technological cost declines have accelerated this trend, although solutions are moving at different speeds across markets.

Since 2010, the cost of solar PV and lithium batteries has fallen by about 90% and offshore wind by 50%, making low-carbon solutions increasingly cost competitive, the report highlights.

It estimates that 55% of global emissions reductions needed to decarbonise can now be achieved with solutions that are already cost competitive, with another 20% addressable at minor cost premiums and 5% requiring a behavioural change.

However, an additional 20% of critical deep decarbonisation technologies currently face major cost disadvantages and will require dedicated policy and industry support to achieve cost competitiveness, the report points out.

The cost declines follow considerably investment in clean energy, increasingly led by China.

The report finds that in 2024, China invested $659-billion in clean energy and is responsible for over 60% of new global renewable capacity additions through 2030.

It leads the world in patents for solar, electrical vehicles and battery technologies, reshaping global supply chains and shifting the centre of green innovation to the East.

The report features 14 case studies from members of the WEF’s Alliance of CEO Climate Leaders, showcasing how pioneering companies have turned participation in green markets into a competitive advantage.

The report concludes with a CEO playbook, which shows how leading companies leverage growth accelerators – scaling technologies to cost maturity, shaping regulatory ecosystems and unlocking diversified finance – to capitalise on the green economy.

“Three things are striking: the resilience of the green economy, with investments in green technologies jumping from record to record against a change in public headlines and sentiments; China's leadership in manufacturing, innovation and deployment of green technologies; and the opportunity for companies operating in green markets to outperform and earn a premium in capital markets,” BCG MD and senior partner Patrick Herhold highlights.

“With projections to become a $7-trillion market, there will be many more opportunities for companies that act boldly today,” he adds.