John D. Rockefeller became the richest person in history revolutionizing the oil industry. A century and a half later, Elon Musk is in the running for that same title by eliminating demand for Rockefeller's chief product.
As the planet's climate crisis accelerates, the fastest-growing fortunes in the world are now green thanks to a new generation of tycoons amassing wealth in the clean energy boom. Topping the list is the chief executive officer of Tesla Inc., whose fortune soared 622% in the past year, to $199.2 billion. Musk's riches have recently come the closest of any modern fortune to matching the estimated, inflation-adjusted value of Rockefeller's Standard Oil empire.
The 15 billionaires on Bloomberg Green's new ranking showcase the explosive growth of electric vehicles, batteries, and solar power. Not every dollar in these fortunes is derived from climate-aligned businesses whose core products reduce greenhouse gas emissions. With Musk, for example, his green net worth, or the portion of his fortune tied to cars and solar, is $180.7 billion—91% of his overall wealth—but it excludes his interests in other businesses such as space rockets.
What links Tesla's stunning rally in 2020 to the other rising fortunes on this list is investors' growing acknowledgement of the dire risks posed by global warming and the necessity of technology to slow it. Nine of the 10 biggest economies will have net-zero emissions goals now that President Biden is expected to strengthen US climate commitments. Hundreds of companies worldwide have also pledged to neutralize their carbon output by midcentury or sooner, prodded by mega-shareholders such as BlackRock Inc.
That momentum has boosted shares in makers of solar film, wind turbines, and e-bikes. Since April the S&P Global Clean Energy Index has soared 231% vs. a 53% jump for the S&P 500. And that in turn has generated a hefty windfall for a select group of new-wave green industrialists. The 15 biggest fortunes derived from the climate-solutions industry total $355 billion, more than twice the market capitalization of Royal Dutch Shell Plc and quadruple that of BP Plc.
Musk's green fortune is almost three times the combined wealth of the four Chinese billionaires ranked second. Zeng Yuqun, Huang Shilin, Pei Zhenhua, and Li Ping have a green net worth of $60.7 billion thanks to their stake in Contemporary Amperex Technology Co., the world's biggest supplier of batteries to electric-car makers. CATL's customers include Tesla.
The foursome behind CATL are more characteristic of the prototypical green billionaire than is Musk: 80% of the billionaires in this ranking are from China, a sign of that nation's role as a manufacturing hub for clean technologies such as solar components and the biggest market by far for electric cars.
China's already booming green industries are expected to be turbocharged after President Xi Jinping's vow in September to achieve carbon neutrality by 2060. And the European Union is developing a Green Deal requiring hundreds of billions of euros in annual investment. In the US, meanwhile, Biden in his early days has rejoined the Paris climate agreement and proposed a $2 trillion clean energy plan. That could boost demand for lithium-powered energy storage and electric cars nearly sevenfold over the next five years, according to Bloomberg Intelligence research.
"It's a new generation of growth in the clean energy sector, and it has just started," says Andy Wong, chief investment strategist of LW Asset Management. "With the technology upgrades in smart grid and energy storage, the rollout of new products—no matter whether it's for solar panels or electric vehicles—is faster than before and consumers are also adapting to the upgrades quickly."
More than half the list is made up of tycoons who make either electric vehicles or the batteries that power them. Sales of passenger electric cars reached almost 3 million last year, with Chinese buyers responsible for more than a third of that, according to BloombergNEF data. That's enriched Chinese billionaires such as Wang Chuanfu, Lv Xiangyang, and Xia Zuoquan, the top shareholders of battery and electric automaker BYD Co., as well as Liu Jincheng, chairman of lithium-battery company Eve Energy Co.
Billionaires in solar, an industry that's experienced multiple booms and busts in its relatively short history, are reaping the benefits of a sustained surge in demand that not even Covid-19 could dent. The world saw a record 137 gigawatts of new solar installation last year, according to BNEF's latest estimates. Solar billionaires including Li Zhenguo, Li Chunan, and Li Xiyan, the top shareholders of Longi Green Energy Technology—the world's biggest manufacturer of solar-panel components—make up the next-largest group on the list.
There are two outliers whose green fortunes are unrelated to cars, batteries, or sunshine: A German wind-turbine manufacturing magnate and an Australian with a US paper-recycling empire round out the list.
As with all industries, surging valuations are bringing out the skeptics and leading some to call renewables a bubble. Jagdeep Singh, CEO of QuantumScape Corp., lost $2.4 billion in December after shares of the electric-vehicle battery maker plunged more than 60%, knocking him from a possible place in this ranking. The net worth of Nikola Corp. founder Trevor Milton has tumbled 38% since a short seller accused the electric-truck startup of fraud last year, an allegation Milton denied before resigning.
Two other fortunes on last year's list of the 10 wealthiest green billionaires—Jose Manuel Entrecanales and Somphote Ahunai—dropped below the cutoff for this year's top 15, in a sign of volatility. Green titans may stand to lose some of their billions if the frenzy abates as renewable energy becomes the baseline option. Still, there's no dispute that the transformation heralded by these billionaires is well under way.
There's also the chance that the greenest billionaires will get less green as their fortunes grow. Musk has invested in some decidedly un-green industries. The core product of Space Exploration Technologies Corp., or SpaceX, is rockets that spew thousands of tons of carbon into the atmosphere every year. The company—Musk's second-largest asset—has revealed it plans to drill for natural gas near its Texas headquarters.
Then again, the Tesla co-founder is also pointing the way to new technologies that might one day produce billionaires for this list. Musk said last month that he's looking to give a $100 million prize for breakthrough carbon-capture technology. That nascent industry of sucking CO₂ from the air is tiny right now, but the International Energy Agency expects carbon capture to grow as much as 200-fold to meet the world's climate goals.
Net-worth figures are as of Jan. 28, 2021, and are based on calculations by the Bloomberg Billionaires Index. To qualify, the individuals must derive a significant portion of their wealth from businesses that reduce greenhouse gas emissions, such as renewable energy or electric vehicles. Fortunes derived from the same company are grouped together. The green net-worth figure excludes any portion of the fortunes not derived from such activities. The value of pledged shares is excluded from the calculation.
Disclaimer: This opinion first appeared on bloomberg.com, and is published by special syndication arrangement.