Investing in the green economy 2023

Detalles

After a slowdown in 2022, the global green economy took shape again in 2023. Green stocks struggled in 2022 due to a combination of factors, including high inflation, rising interest rates, and geopolitical tensions. However, by the end of the second quarter of 2023, the market capitalization of green companies had recovered to its 2021 average of more than 9%.

Despite financial volatility, the green economy has continued to expand steadily. The green revenues of publicly traded companies are on track to exceed US$5 trillion by 2025, and the market capitalization of the green economy will approach 10% of the stock market.

The green economy is maturing and diversifying: green companies are getting bigger and more susceptible to investment. The average market capitalization of pure companies (companies with 100% green revenues) reached more than $7 billion in June 2023, a more than six-fold increase from 2016.

There has been strong government support for accelerating clean energy development, such as the U.S. Inflation Reduction Act and the EU's Net-Zero Industry Act. However, attempts to decouple global supply chains and secure key raw materials may introduce structural inefficiencies that threaten to slow the growth of the global green economy.

This report provides the fourth annual update on the global green economy. Based on the unique and highly granular data of FTSE Russell Green Revenues, this report offers a detailed analysis of the global green economy with a wide universe of listed stocks and for the first time analyses new geopolitics related to the green economy.

This report highlights how to use green benefits data to identify and analyse investment opportunities in the green economy and measure portfolio exposure to climate and environmental solutions.