Last year, Forrester declared that money — not ethics — will fuel the green market revolution. There’s unprecedented opportunity for businesses that offer innovative products and services across six major categories: how we get (us and goods) around, how we plug in, how we make products, how we heat and cool our environments, how we adapt, and what we eat. But just how big is that opportunity?
According to Forrester’s new forecast, cumulative global green market revolution spend will total $326 trillion from 2023 to 2050. Yes, that’s $326 trillion. If you’re surprised, consider that only 23% of US online adults, 14% of Europe-7 online adults, and 19% of Australian online adults are “non-greens,” or those who do not consider themselves environmentally conscious. By 2050 — after consumers experience worse wildfires, storms, floods, pollution, and energy costs in their daily lives — eco-friendliness will be a mandate. And that doesn’t even account for the pull of environmentally sustainable offerings that make products better, such as electric vehicles that are more reliable, have no engine noise, and have better acceleration. In the intervening time, companies will either partake and profit in the opportunity or perish as they pander to an ever-shrinking share of consumers.
For 2023–2050, Forrester forecasts that the green market revolution will be driven by:
- A growing focus on how we get (us and goods) around. This is the category with the largest cumulative spend, and its share of annual green market spend will grow the fastest of any category — rising from 17% in 2022 to 35% in 2050. Most of the opportunity derives from electric car sales, with more than one in three new cars sold in 2030 expected to be electric. Other areas of focus include electrifying other modes of transportation, electric vehicle charging, and low-emission fuels.
- A total transformation of how we make products. Twenty-eight percent of category spend will go toward improved building design, engineering, and materials. A further 19% of spend will be devoted to both bettering green packaging and redesigning textiles’ circular economy, with the latter improving reliability and reducing supply chain risks. For example, H&M has announced plans to halve its use of raw material by 2030.
- Greater spend on adapting to already irreversible climate changes. Governments (countries, states, and cities), businesses, and individuals are on the hook to mitigate the effects. Of the cumulative spend, more than half will come from a portfolio of investments in negative emissions technologies, including carbon capture and storage, afforestation-reforestation, and soil carbon sequestration in cropland, grassland, and coastal ecosystems. Many of these technologies are still in development and will be adopted as their costs decline.
- Intergovernmental competition to control business opportunities. It’s not just companies that will be competing to dominate the green economy. Governments are beginning to realize that winning in the green economy is crucial to their countries’ future successes and will enact policies to help their businesses. For example, the Inflation Reduction Act’s $375 billion in benefits for renewable industries is partly aimed at luring European clean tech companies to the US.
To find out the full range of opportunities that exist in the six categories and green finance, as well as the numbers behind them, read our new report, Green Market Revolution Forecast, 2023 To 2050 (Global). And if you want to learn more, schedule an inquiry or guidance session with me or one of Forrester’s many analysts who cover the green market revolution.