TEMP - Investing In The Green Economy 2023 - Entering The Next Phase Of Growth

2023-10-10 11:20:00 ET

Summary

• After a downturn in 2022, the global green economy has returned to form in 2023.
• Green revenues for listed companies are on track to exceed US$5 trillion by 2025, with market capitalisation of the green economy approaching 10% of the equity market.
• The green economy is maturing and diversifying: green companies are becoming larger and more investable.
• This report highlights how to use FTSE Russell's Green Revenues data to identify and analyse investment opportunities in the green economy and measure portfolio exposure to climate and environmental solutions.

After a downturn in 2022, the global green economy has returned to form in 2023. Green equities struggled in 2022 due to a combination of factors, including high inflation, rising interest rates and geopolitical tensions. However, by the end of Q2 2023, market capitalisation of green companies had recovered to its 2021 average of over 9%.

Despite financial volatility, the green economy has continued to expand steadily. Green revenues for listed companies are on track to exceed US$5 trillion by 2025, with market capitalisation of the green economy approaching 10% of the equity market.

The green economy is maturing and diversifying: green companies are becoming larger and more investable. The average market capitalisation of pure plays (companies with 100% green revenues) reached over US$7 billion by June 2023 - a more than six-fold increase since 2016.

There has been strong government support to accelerate clean energy development, such as the US Inflation Reduction Act and the EU 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.

• Our flagship report provides the 4th annual update on the global green economy.
• Building on the unique and highly granular FTSE Russell Green Revenues data , this report provides detailed analysis on the global green economy with a broad listed equities universe and for the first time discusses new geopolitics related to the green economy.
• This report highlights how to use our Green Revenues data to identify and analyse investment opportunities in the green economy and measure portfolio exposure to climate and environmental solutions.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

For further details see: