BCG-WEF Project: CEO Climate Leaders

Already a Multitrillion-Dollar Market: CEO Guide to Growth in the Green Economy

In 2024, the global green economy surpassed $5 trillion in annual value, making it one of the most dynamic growth sectors in the world, second only to technology. Recent geopolitical developments, energy security considerations, and short-term economic pressures have shifted the conversation on climate action. But investments in the green economy continue to increase, and the annual value of this market is projected to exceed $7 trillion by 2030.

Low-emission technologies and adaptation solutions are here to stay. But momentum and speed vary significantly across technologies and regions. Proven and economic solutions such as solar, wind, batteries, and electric vehicles will continue to grow across most geographies, albeit at different paces. Less mature and more costly technologies such as low-carbon hydrogen and carbon capture, utilization, and storage (CCUS) may not, as they still require favorable and often much more local regulation. Geographically, the low-carbon economy is increasingly led by China, which is consistently outspending, outproducing, and outdeploying other countries.

Adaptation and resilience solutions now account for more than one-fifth of all climate-related investments. The resulting market extends beyond the Global South, long the frontline of climate impacts, into the Global North, where risks are mounting rapidly. Early-stage solutions are gaining traction in areas such as immersion cooling, microgrids for data centers, nanoparticles for heat-reflective windows, and climate analytics.

For those making bold moves in the green economy, the bet seems to be paying off. Companies in the green economy often outperform financially. On average, green revenues increase two times faster than conventional revenues, and companies in these markets typically get access to cheaper capital, build competitiveness for the future, and accordingly are often valued at a premium on capital markets.

Nonetheless, winning in the green economy is not always easy. Growing in this market requires the same business fundamentals as any successful venture: a clear purpose and strategy, a compelling value proposition, and an agile operating model built for rapid scale. But often, it needs more. Winning companies leverage growth accelerators to rigorously push for technology maturity and bring down the costs of nascent technologies. They are often able to shape regulation and mobilize early adopters. And they are able to unlock smart capital in support of a viable business case for their green offering.

Investments in decarbonization and resilience are not just essential for communities around the world. In many cases, they are a winning business strategy. The green market is already a massive opportunity, and there is plenty of unmet future demand for companies to serve. But leaders cannot afford to wait. Building green businesses takes time, and those who delay run the growing risk of falling behind as the market accelerates.

The Cost of Inaction: A CEO Guide to Navigating Climate Risk

Climate change is already straining economies globally as it disrupts livelihoods, supply chains, and infrastructure. In the face of escalating operational costs and risks to business continuity, the need for immediate action has never been greater. Since 2000, climate-related disasters have caused over $3.6 trillion in economic damages, and without urgent action, global GDP could take a cumulative hit of 16% to 22% by the end of the century.

Climate change presents a dual threat to businesses: physical risks from extreme weather, and transition risks from the necessary global shift to a low-carbon economy:

• Physical Risks. Extreme weather events such as storms, floods, and wildfires damage assets, disrupt supply chains, and reduce productivity, especially in utilities, agriculture, and communications, and other sectors that that rely heavily on vulnerable physical infrastructure. Weather-related risks expose up to 25% of EBITDA to potential loss in these sectors. Addressing these challenges requires the adoption of robust resilience measures across operations and supply chains. (See Exhibit 1.)

• Transition Risks. As governments ramp up carbon pricing and introduce stricter emissions regulations, companies that lag in decarbonization efforts put themselves in jeopardy not only of having to pay compliance costs but also of seeing their asset values diminish and their market position erode, especially in high-emission sectors. (See Exhibit 2.) Transition risks extend beyond compliance costs, as shifting investor and consumer expectations reshape demand.

Meeting these risks requires the formulation of proactive climate strategies to protect margins and market position:

• Businesses have a clear case for investing in adaptation: companies that comprehensively assess their risk exposure have reported to CDP that their current adaptation and resilience investments could yield returns of from $2 to $19 for every $1 invested.
• Transitioning to low-carbon operations can economically abate up to 60% of emissions in a fast-transition scenario, thereby reducing exposure to carbon pricing and regulatory costs, particularly in emission-intensive sectors.

Growing demand for climate-resilient infrastructure and supply chains is creating new opportunities for companies to expand adaptation solutions and services. For example, Schneider Electric partnered with AiDash to help utilities build climate-resilient electrical grids, using AI to forecast storm- and wildfire-related outages. Meanwhile, in construction, Vetrotech by Saint-Gobain has developed hurricane- and fire-resistant glass to enhance the resilience of buildings exposed to extreme weather conditions.

The green economy is projected to soar from $5 trillion in 2024 to over $14 trillion by 2030. Early movers in renewable energy, sustainable transport, and green consumer products stand to gain substantial competitive and regulatory advantages, positioning themselves as leaders in rapidly expanding markets.

For CEOs, this report’s guidebook provides essential tools to address climate risks, secure long-term resilience, and capitalize on growth opportunities. (See Exhibit 3.) Drawing on insights and case studies from 20 CEOs and senior executives, it offers a structured approach to embedding climate strategy into corporate decision making and to transforming risk into lasting value.