Green Bond Issuance Hits $540 Billion in 2023, Corporate Sector Leads with 64% Share: LSEG Green Economy 2024 Report

Key Report Statistics

  1. Market capitalization:The market capitalization of the global green economy reached $7.2 trillion in the first quarter of 2024.
  2. Speed ​​of growthThe green economy is characterized by a 10-year compound annual growth rate (CAGR) of 13.8%.
  3. Revenue Pool:If the green economy were treated as a standalone sector, its annual revenues would reach almost $5 trillion in 2023.
  4. Energy efficiency sector:Energy efficiency is the largest green sector, accounting for 46% of the green economy and including efficient IT equipment and green buildings.
  5. Green Bond Issue:Green bond issuance reached around $540 billion in 2023, with corporate issuers accounting for 64% of new green bond offerings.
  6. Outstanding Green Bonds:The value of green bonds issued globally amounted to $2.5 trillion at the end of the first quarter of 2024, representing 2% of the total bond market.
  7. Technology SectorThe technology sector in the green economy is the largest, with a market capitalization of $2.3 trillion in 2024.
  8. Automotive sector:The automotive sector has the highest green energy penetration rate at 42%.
  9. American market:The United States will be the largest market for the green economy in 2024, followed by Taiwan and China.
  10. Renewable Energy Installations:Solar and wind installations increased by 85% and 60%, respectively, in 2023 compared to 2022.

The London Stock Exchange Group’s Investing in the Green Economy 2024 report provides a comprehensive analysis of the growth, composition and financial performance of the global green economy across asset classes. The report highlights significant developments and emerging trends that define the current state and future trajectory of green investing.

Market capitalization and growth rate

The global green economy has achieved extraordinary growth, with its market capitalization increasing to $7.2 trillion in Q1 2024. This impressive figure underscores the growing value and influence of green sectors in global financial markets. The green economy’s solid 10-year CAGR of 13.8% further reinforces its status as a leading investment opportunity, outpacing the broader listed equity market.

Revenue Pool and Sectoral Composition

If considered as a standalone sector, the green economy could boast annual revenues of nearly $5 trillion in 2023, making it one of the largest sectors in the world. Within this economy, the energy efficiency sector stands out as the largest, accounting for 46% of the green economy. This sector includes efficient IT equipment and green buildings, underscoring the key role of energy efficiency in driving sustainable growth.

Green Bond Market

The green bond market has shown resilience and growth, with issuance reaching around $540 billion in 2023. Corporate issuers dominate the market, accounting for 64% of new green bond offerings. The total value of green bonds in circulation globally stood at $2.5 trillion at the end of Q1 2024, representing 2% of the total bond market. These figures reflect growing investor interest and confidence in green bonds as a viable investment vehicle.

The most important sector events

The technology sector in the green economy is particularly noteworthy, with a market capitalization of $2.3 trillion in 2024, making it the largest sector. The automotive sector also shows significant green penetration, with 42% of its market attributed to green activities, largely driven by the rapid adoption of electric vehicles (EVs).

Geographical distribution

Geographically, the United States is the market leader in the green economy, followed by Taiwan and China. The dominance of the U.S. market is attributed to its significant stock market and large green companies such as Tesla. Taiwan’s position as the second largest market is driven by its semiconductor industry, while China remains a key player despite recent market volatility.

Growth of renewable energy

Renewable energy installations have increased dramatically, with solar and wind installations increasing by 85% and 60% respectively in 2023 compared to 2022. This growth highlights the growing role of renewables in the global energy mix and their contribution to the green economy.

Challenges and opportunities

Despite these positive trends, the report points to several challenges, including market volatility, geopolitical risks and overcapacity issues in the renewable energy and electric vehicle sectors. However, the long-term growth prospects for the green economy remain strong, driven by technological advances and a growing global commitment to sustainability.

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The London Stock Exchange Group’s 2024 report paints a promising picture of the global green economy. With significant market capitalization, impressive growth rates, and expanding investment opportunities across sectors, the green economy continues to emerge as a key part of global financial markets. Both investors and policymakers are poised to benefit from the ongoing transformation towards a more sustainable and resilient economic system.