Investing in the green economy: Tracking growth and performance in green equities

Channeling more capital towards the low carbon transition, meeting new regulatory requirements of green taxonomies and capturing green thematic investment opportunities requires better and more granular data on the green economy.

This report discusses key trends and insights in the global green economy based on the FTSE Russell Green Revenue data – a unique source providing granular, bottom-up information on corporate revenues from green products and services. We find that the global green economy remains large, diversified and is expanding rapidly. It saw strong equity market performance over the longer term and particularly in 2020 and 2021. In 2022 its performance to date has lagged global equity markets.

We attribute this to extended valuation premiums and weakness in certain green subsectors, such as renewable energy. However, the long-term growth drivers of the green economy remain intact – in particular the need for delivering solutions to global challenges, none less significant than climate change.

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