PUBLISHER: The Business Research Company | PRODUCT CODE: 1877558
PUBLISHER: The Business Research Company | PRODUCT CODE: 1877558
Carbon-smart investment portfolio refers to an investment approach that prioritizes minimizing carbon exposure by directing capital toward low-carbon, sustainable, and climate-resilient assets. It seeks to deliver competitive financial performance while contributing to the global shift toward a low-carbon economy.
The key investment types of a carbon-smart investment portfolio include equities, fixed income, mutual funds, exchange-traded funds, and others. Equities represent ownership stakes in companies, providing investors with potential returns through capital appreciation and dividends. Investment strategies encompass negative screening, positive screening, environmental, social, and governance integration, impact investing, and others. These portfolios are utilized in areas such as wealth management, retirement planning, corporate investment, and others, serving end-users including institutional investors, retail investors, asset managers, pension funds, and others.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.
The carbon-smart investment portfolio market research report is one of a series of new reports from The Business Research Company that provides carbon-smart investment portfolio market statistics, including carbon-smart investment portfolio industry global market size, regional shares, competitors with a carbon-smart investment portfolio market share, detailed carbon-smart investment portfolio market segments, market trends and opportunities, and any further data you may need to thrive in the carbon-smart investment portfolio industry. This carbon-smart investment portfolio market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The carbon-smart investment portfolio market size has grown rapidly in recent years. It will grow from $28.18 billion in 2024 to $33.35 billion in 2025 at a compound annual growth rate (CAGR) of 18.4%. The growth in the historic period can be attributed to the growing focus on climate-related financial risks, increasing issuance of green bonds, rising performance of renewable energy assets, expanding use of climate stress testing, and increasing availability of carbon-offset projects.
The carbon-smart investment portfolio market size is expected to see rapid growth in the next few years. It will grow to $64.67 billion in 2029 at a compound annual growth rate (CAGR) of 18.0%. The growth in the forecast period can be attributed to increasing demand for sustainable investments, rising awareness of climate change impacts, growing government incentives for low-carbon projects, increasing interest in net-zero aligned portfolios, and rising transparency in carbon reporting. Major trends in the forecast period include advancements in carbon accounting tools, integration of blockchain technology, innovation in offset verification, development of climate risk models, and advancements in portfolio optimization algorithms.
The growing prevalence of green building certifications is expected to drive the growth of the carbon-smart investment portfolio market going forward. Green building certifications refer to formal recognition that a building meets specific environmental, energy efficiency, and sustainability standards throughout its design, construction, and operation. The rise in green building certifications is driven by increasing environmental awareness, as governments, businesses, and occupants prioritize energy-efficient and sustainable buildings to reduce carbon emissions and operational costs. A carbon-smart investment portfolio supports green building certifications by funding projects that meet sustainability standards, providing capital for energy-efficient construction, and incentivizing developers to adopt certified green practices, thereby accelerating the adoption of environmentally responsible buildings. For instance, in July 2024, according to the U.S. Green Building Council, a U.S.-based non-profit organization, in 2024, they were part of over 46,000 residential projects certified under the LEED green building rating system, with 2023 seeing nearly a 5% rise in new LEED residential project registrations. Therefore, the growing prevalence of green building certifications is driving the growth of the carbon-smart investment portfolio market.
Key companies operating in the carbon-smart investment portfolio market are focusing on developing innovative solutions such as environmental plantings to enhance carbon sequestration, promote biodiversity, and attract environmentally conscious investors. Environmental plantings refer to the deliberate establishment of vegetation to reduce carbon emissions, enhance ecological health, and contribute to climate change mitigation. For instance, in September 2025, the Caisse de depot et placement du Quebec, a Canada-based pension fund company, partnered with Clean Energy Finance Corporation, an Australia-based investment company, to launch Meldora, a $165 million (AUD $250 million) sustainable agriculture platform in Australia to support climate-smart farming and renewable energy adoption. This combines large-scale farming with environmental plantings to generate high-quality Australian carbon credits. It delivers both economic and environmental benefits by enabling productive agriculture alongside native vegetation restoration for long-term carbon sequestration and biodiversity. Meldora sets a new standard for climate-smart, resilient agricultural investment in Australia.
In April 2025, Meta Platforms Inc., a U.S.-based technology company, partnered with EFM Investments & Advisory LLC to promote climate-smart forestry in Washington State. This partnership aims to generate 676,000 forest carbon credits by 2035 by transitioning 68,000 acres of forestland on Washington's Olympic Peninsula to climate-smart management that boosts carbon storage, biodiversity, and community benefits while supporting Meta's objective to reach net-zero emissions by 2030. EFM Investments & Advisory LLC is a U.S.-based investment company offering a carbon-smart investment portfolio.
Major players in the carbon-smart investment portfolio market are Allianz Global Investors GmbH, Morgan Stanley Investment Management Inc., Legal & General Investment Management Ltd., UBS Asset Management AG, Fidelity Investments, State Street Corporation, BlackRock Inc., Northern Trust Asset Management Inc., Amundi Asset Management S.A., Invesco Ltd., JP Morgan Chase & Co., Schroders plc, DWS Group GmbH & Co. KGaA, Wellington Management, AXA Investment Managers Paris, Pacific Investment Management Company LLC, Goldman Sachs Asset Management L.P., BNP Paribas Asset Management S.A., Robeco Groep N.V., Carbon Equity B.V.
Europe was the largest region in the carbon-smart investment portfolio market in 2024. Asia Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in carbon-smart investment portfolio report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the carbon-smart investment portfolio market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The carbon-smart investment portfolio market includes revenues earned by entities through sustainable asset allocation, carbon footprint analysis, and impact reporting. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Carbon-Smart Investment Portfolio Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on carbon-smart investment portfolio market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for carbon-smart investment portfolio ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The carbon-smart investment portfolio market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.