Already a Multi-Trillion-Dollar Market 2025

3.3 Companies in the green economy often benefit from higher valuations Companies that show meaningful green revenues often outperform on revenue-focused valuations, reflecting positive investor sentiment. This premium exists across time, across regions and in a number of different industries. Analysis covering 2016 to 2024 found that companies with a share of green revenues over 10% achieved higher price-to-revenue (P/R) and enterprise-value-to-revenue (EV/R) multiples in capital markets (see Box 3). The P/R metric serves as a quick gauge of short-term shifts in investor sentiment, while EV/R captures overall capital structure and long-term market value. What is more, this premium correlates with the share of green revenues that companies achieve. For example, companies with around 20% of green revenue enjoyed 6% P/R and 6% EV/R multiple expansion (see Figure 16). For companies with around 60-70% of green revenue, this premium was more than twice as high. These effects were robust across time, persisting beyond one year and across pre- and post-COVID periods. It’s not “environment vs. economy” – it’s the same playbook. Sustainability and competitiveness are intertwined. For too long, the myth persisted that climate action was a feel-good add-on or a drag on the balance sheet. The truth? When you lean into decarbonization, you’re solving for business fundamentals – cutting operating costs, preserving capital and hardening resilience. Katie McGinty, Vice President, Chief Sustainability and External Officer, Johnson Controls Companies with over 50% green revenues attracted valuations 12-15% higher than non-green competitors Average impact of green revenue on P/R, by share of green revenue (2016 to 2024)Average impact of green revenue on EV/R, by share of green revenue (2016 to 2024) <10% 10%4%6%7%9%12%13% 13% 11% 6%7%10%13%14%15% 15% 20% 30% 40% 50% Share of green revenueHigh statistical significanceNo significance 60% 70% 80% <10% 10% 20% 30% 40% 50% Share of green revenueHigh statistical significanceNo significance 60% 70% 80%Valuations for companies, by share of green revenues (2016-24) FIGURE 16 Notes: P/R = price-to-revenue, EV/R = enterprise-value-to-revenue. Sources: see endnote.65 Already a Multi-Trillion-Dollar Market: CEO Guide to Growth in the Green Economy 27