What is green technology?

Does climate change worry you? Do you actively look for ways to reduce your carbon footprint? Then you might also like to support companies that help reduce the impact of human activity on our environment. Green tech is rapidly becoming a popular investment option. This is apparent from the stock performance of companies like Vestas Wind Systems, which rose almost 16% in the six months to August 2025. So, what is green technology, and should you invest in green tech?

Green technology refers to any technology that is environmentally friendly. It aims to create a more sustainable future by conserving natural resources and reducing pollution. Those involved in developing such technology focus on innovating how we generate energy, manage waste, and use resources. Ultimately, this will help preserve the environment for our future generations.

In this guide, we help you learn more about what green technology is and how to invest in green tech so that you can make an informed investment decision.

What is green technology?

Green technology is a category of technologies that focus on reducing the negative effects of human activities on the environment. Its primary purpose is to be sustainable, meaning it meets the needs of the present without compromising the ability of future generations to meet their own needs. It’s not just about being ‘less bad.’ It's about being actively beneficial. This could be anything from developing a new solar panel to designing a more efficient recycling process.

Sustainable practices like using a reusable water bottle or a canvas bag are important. But green technology goes a step further. It creates new products, systems, and processes that change how we interact with the environment on a larger scale. For example, while a reusable bottle reduces waste, a green tech solution might be a new water filtration system that makes polluted water drinkable.

Examples of green technology

The applications of green technology are immense and growing, touching almost every aspect of our lives. One of the biggest examples of green tech is renewable energy, which harnesses power from natural, replenished sources to produce energy. For instance, solar energy cells convert sunlight into electricity while wind energy turbines turn kinetic energy of wind into power.

The introduction of electric vehicles (EVs) is a major part of green tech. Companies like Tesla and Rivian are leading the change, creating vehicles with zero carbon emissions. Plus, innovations in public transportation and urban design, which prioritises cycling and walking, also fall into this category. Explore how to trade Tesla in our guide.

Another area is energy-efficient solutions. These technologies focus on using less energy to achieve the same result. For example, smart grids use advanced tech to manage electricity distribution more efficiently. LED bulbs consume much less energy than traditional incandescent bulbs, and energy storage technologies, like advanced batteries, store renewable energy for later use.

Moreover, modern waste management goes beyond simply sorting trash. Green tech in this area includes waste-to-energy systems that convert waste into power, and advanced recycling facilities that can more efficiently process materials like plastics and e-waste.

Top companies leading the green tech revolution

Many major corporations are heavily investing in green tech, spurring innovation and shaping the market. Some of the top companies among them are:

NextEra Energy, a leading producer of wind and solar power.
Tesla, known for its electric vehicles, is also a big player in battery storage and solar energy solutions.
Ørsted shifted from a fossil fuel company to a global leader in offshore wind energy.
Vestas Wind Systems, one of the world’s largest manufacturers of wind turbines.
Iberdrola, a global giant in renewable energy, focussed on wind and solar.

These companies and many others are not only building the infrastructure for a sustainable future but are also creating an exciting market for investors.

Learn more about trading stocks, indices, and ETFs with market guides.

Clean tech vs. environmental tech

The terms clean tech and environmental tech are often used interchangeably with green tech, but there are subtle distinctions.

Clean tech generally refers to technologies that improve performance, productivity, and efficiency while reducing costs, energy consumption, waste, or pollution. It is a business-focused term that is often associated with venture capital and startups. Examples include energy efficiency software and advanced battery storage.

Environmental tech is a broader term that encompasses any technology that monitors, protects, or restores the natural environment. This can include technologies for water purification, soil remediation, and air quality monitoring. While there’s overlap, environmental tech can sometimes focus on cleaning up past damage rather than just preventing future harm.

So, clean tech and environmental tech can be considered forms of green tech. The distinction basically lies in their specific application and business context.

How to adopt green technology

Individuals and businesses can embrace green technology to make a positive impact. For individuals, adopting green tech can be as simple as switching to energy-efficient appliances and LED light bulbs or installing a smart thermostat. For bigger steps, you could consider installing solar panels on your home or purchasing an electric vehicle.

Businesses can integrate green tech by transitioning to renewable energy sources for their operations, optimising their supply chains for efficiency, and implementing advanced waste management systems. Businesses can reap multiple benefits of switching to green technology, such as reduced operating costs, better brand reputation, customer loyalty, compliance with environmental regulations, and the creation of new revenue streams from sustainable products and services.

Investing in green technology

The green tech sector is one of the fastest-growing investment areas globally. Investors are attracted by the potential for high returns and the ability to align their investments with their values. You can invest in green tech by directly buying and selling shares of leading companies in the sector. Green tech exchange-traded funds (ETFs) are a more diversified approach, giving you exposure to multiple stocks from the sector in one go.

The green tech market is expected to grow from $20.90 billion in 2024 to $105.26 billion by 2032, expanding at a CAGR of 22.4%. However, as in any type of investing, it is important to be aware of and manage risks. Many green technology companies are still in the early stages of development, and their stocks can be volatile. Regulatory changes and shifts in government policy can also impact market trends.

Learn more about risk management before investing your hard-earned money.

Exploring trading accounts and demo accounts

If you’re new to the world of investing, a demo account can help you practice trading with virtual money. This way, you can learn how the green tech market moves without any financial risk. You can also test different trading strategies and get hands-on experience of the trading platform and your chosen assets.

Once you are confident, create a live account to start your green tech investing journey.

FAQs

What is green technology?

Any technology designed to be environmentally friendly and reduce the negative impact of human activities on the planet is called green technology.

What are examples of green technology?

Examples include solar panels, wind turbines, electric vehicles, energy-efficient smart grids, and advanced recycling systems.

How does green technology benefit the environment?

It helps reduce greenhouse gas emissions, conserve natural resources, decrease pollution, and promote a society where waste is minimised.

What are the top companies in green tech?

Major players include NextEra Energy, Tesla, Ørsted, Vestas, and Iberdrola, among many others focused on renewable energy, transportation, and sustainability solutions.

How to invest in green tech?

You can invest by buying stocks of individual green tech companies or ETFs that track the performance of the entire sector.