A $10 trillion industry sprang up when we weren’t looking

An old knock on renewable energy and other planet-friendly endeavors is that they can’t stand on their own without financial props from the government. Ironically, it took the second presidency of Donald Trump, in which those supports have turned to mule kicks, to kill this trope once and for all. Not only can the green economy sustain itself, but it trounces many other sectors.
A recent report from the London Stock Exchange Group Plc (LSEG) found that “green economy” companies, or those that derive a significant portion of their revenue from stuff like clean energy, efficiency and water management, now have a total stock market value of $10 trillion. If this were a standalone sector, it would be bigger than healthcare and third in the world only to technology and industrials.

Since 2008, valuations for these companies have grown by 18% a year, compared with 12% for the broader market, the report found. Their stocks have outperformed global equities by 133%. A representative sample of these companies, the FTSE Environmental Opportunities All Share Index, topped the FTSE Global All-Cap Index by 12% last year.


In fact, this stealth sector just had one of its best years on record despite many of the world’s governments and the corporate sector abandoning their pre-Trump pledges to zero out carbon emissions to stave off the worst of global heating. Green revenues grew 5.3% last year, the fastest since 2022, the year of President Joe Biden’s Inflation Reduction Act (IRA).

Evidence keeps mounting that the green economy has entered a new phase, one where its rapidly improving economics give it lasting immunity from fickle political sentiments. Even as the dreams of the 2015 Paris Agreement, net zero, the IRA and more have crumbled, the technology with the power to make some of those dreams come true has only gained momentum.

“What the LSEG data shows us is that the green economy’s resilience is no longer dependent on politics,” Matthew Roling, assistant professor and founding executive director of the Abrams Climate Academy at the Kellogg School of Management at Northwestern University, said in a statement. “Energy security, grid reliability and supply chain security are now the primary drivers. Those are arguments that resonate in boardrooms. That’s a materially more durable foundation than Paris Agreement consensus ever was.”

To be sure, the past year’s stellar market performance was due in part to the Iran war, when everybody relying on fuel that must be transported through war zones realized they might need a Plan B. The green-economy index has been volatile, the LSEG report warns, and there might be a brief but unpleasant snapback.

But that 5.3% revenue growth happened before the Iran war during a year when Trump adopted a whole-of-government approach to squashing clean energy and efficiency and boosting rival fossil fuels. At the same time, green stocks have also reached a maturity level that suggests some staying power. Their price-earnings ratio premium over the broader market has fallen from a somewhat lofty 26% in 2022 to just 13% at the end of 2025, according to the LSEG report.

More important, green business has a mature industry’s profitability, too. Companies whose revenue is more than 50% green have earnings before interest, taxes, depreciation and amortization, or ebitda, margins that are 2 to 4 percentage points higher than those of non-green companies, the LSEG report found.

And there is still plenty of room to grow. Take data centers. (Please.) Their hunger for power will likely double by 2027, Goldman Sachs has estimated, accounting for 8.5% of the country’s total peak summer demand, up from 4.1% in 2025. More than half of these things are still being powered by fossil gas and coal, which is far too many. But new gas power could take five years to build, Roling told me in a Zoom call, compared with 18 months for a new solar farm. Projects that want to start churning out hallucinations quickly should favor renewables.

Meanwhile, though battery storage costs have tumbled by about 20% a year over the past decade, according to the research group Ember, they still have much further to fall. The cheaper they get, the cheaper it will be for entire nations and industries to switch to combined solar-and-battery power that can be as responsive to demand as fossil gas.

The LSEG report is only the latest proof that green money is smart money. A climate-related disaster-industrial complex was a $1 trillion business in the year through June 2025, Bloomberg Intelligence has estimated. Green-debt issuance set a record last year, and banks made more money arranging financing for clean energy than for fossil fuels for the fourth consecutive year. The S&P Global Clean Energy Transition Index thumped the broader market in 2025, up 45% compared with 16% for the S&P 500.

The data-center boom, unfavorable political winds and the supply-chain disruptions of the Iran war have conspired to keep coal and other dirty fuels afloat temporarily. Global carbon emissions are still rising. The green economy doesn’t yet have the power to overcome all that. But its relentlessly falling costs are bringing that day closer. Any investor who keeps dismissing green investments as fragile niche products, good for nothing more than virtue signaling, will be left behind.