As climate risks threaten corporate profits, addressing such risks can unlock growth in the $14-trillion market for green technologies by 2030, according to a report released by the World Economic Forum (WEF).
Developed by the WEF’s Alliance of CEO Climate Leaders in collaboration with Boston Consulting Group (BCG), the report said the climate transition presents one of the most significant long-term opportunities for growth in modern history.
“Much like the internet revolution, which created a wave of winners and losers, this transition promises even greater change. Companies that lead the charge are not only opening new growth opportunities, but also creating lasting competitive advantages, disrupting legacy business models in the process,” it said.
BCG estimates the market for green technologies and solutions at over $5 trillion in 2024, and headed for nearly $14 trillion by 2030.
The market spans sectors and value chains, with the largest segments being alternative energy (49 percent), sustainable transport (16 percent) and sustainable consumer products (13 percent).
These are all growing well above gross domestic product, at annual rates ranging from 10 percent in consumer products to 20 percent for alternative energy, the WEF report said.
“Companies are seeing successes and setbacks — no surprise given the landscape of regulatory change and uncertainties, technology competition and evolving consumer preferences,” added the report.
It also said firms that delay in action risk not only falling behind more proactive competitors but also miss out on economic opportunities tied to climate leadership.
It said sustainability frontrunners are positioned to create clear advantages in a range of areas including deeper talent pools, top-line growth, saving cash and carbon, reduced regulatory risk and lower cost of capital.
However, the WEF report said the pace and scale at which opportunities develop will vary significantly in different scenarios and industries, particularly where legacy grey assets and infrastructure are deeply embedded.
“Companies transitioning from grey assets to greener technologies must carefully navigate this balance, ensuring that investments in green technologies and assets are aligned with the scale and timing of future risks and policy shifts across various climate scenarios,” it said.
The report further said climate risks are unfolding now, disrupting industries worldwide. Climate-related disasters have inflicted over $3.6 trillion in damage since 2000, with risks accelerating.
“Climate risks and opportunities are no longer a peripheral concern; addressing them is a critical component of a company’s overall corporate strategy. Physical and transition risks and opportunities increasingly impact all aspects of corporate strategy,” it added.