Industrialisation has historically been synonymous with progress, fuelling economic development, technological advancement and widespread job creation. Yet the dominant fossil-fuel-driven model is increasingly incompatible with the goals of sustainable development. Today’s industrial strategies must align economic growth (Sustainable Development Goal [SDG] 8); industry, innovation and infrastructure (SDG 9); and the reduction of inequalities (SDG 10). The global community, particularly the G20, must lead the shift toward a model of green industrialisation that delivers inclusive, long-term prosperity.

Unsustainable industrial practices are already imposing significant costs. Climate change, once considered a distant environmental concern, has become a present-day economic disruptor. Disrupted supply chains, increased operational costs and diminished competitiveness are the direct consequences of inaction. Industrial emissions remain a major contributor to global greenhouse gases, with manufacturing alone responsible for nearly 30% of total emissions.

The continued dependence on coal, oil and gas in countries with weak regulatory frameworks deepens the challenge. High upfront investment requirements, limited technological access and inadequate environmental oversight further constrain the global transition toward clean production. These burdens fall disproportionately on low-income communities, where pollution and environmental degradation exacerbate health risks and socio-economic disparities.

G20 leadership: Responsibility and opportunity

With over 85% of global GDP and 75% of international trade, the G20 holds considerable sway in shaping the future of industrial development. Without deliberate and coordinated action, the divide between advanced and emerging economies will widen. While some G20 members such as China, the EU and India have begun making significant green investments, their progress remains uneven and insufficient to address systemic disparities.

Developed economies often benefit from mature financial systems, advanced technologies and policy coherence that support green innovation. Conversely, developing nations, particularly in sub-Saharan Africa and parts of Latin America, face persistent barriers to industrial modernisation. These countries are frequently relegated to low-value segments of global value chains, operating under weak environmental safeguards and limited labour protections.

Green finance as a catalyst for transformation

One of the key barriers to sustainable industrialisation is access to green finance. Currently, the bulk of green investment flows to developed markets. Emerging economies struggle to attract capital due to underdeveloped financial systems and higher investment risks. Bridging this gap requires the G20 to scale up green bond markets, strengthen public–private partnerships and support risk-mitigation mechanisms that unlock capital for renewable energy and sustainable manufacturing. Establishing standardised carbon pricing across G20 nations is also essential. This would internalise environmental costs and create incentives for cleaner production, ensuring fairer competition globally.

Accelerating technology transfers

Technology is vital to green industrialisation, yet many developing countries remain excluded from global innovation networks. Fragmented, voluntary tech-sharing efforts fall short. A G20-led, structured framework for technology transfer, paired with investments in digital infrastructure, is urgently needed to support smart and sustainable industry.

Capacity building is equally critical. Without a skilled workforce, advanced technologies alone cannot drive transformation. Targeted training and institutional support are essential to prepare workers in developing economies for green industry roles.

Trade policy for inclusive growth

The G20 must reform trade policies to ensure fairer participation in global industrial value chains. Many developing countries remain confined to raw material exports, lacking the infrastructure for value-added production. Trade agreements should enable their integration into sustainable systems, with enforced labour and environmental standards. Supporting small and medium-sized enterprises through targeted financial and technical assistance is also vital to help them meet international trade requirements and participate more equitably.

Regulatory harmonisation and enforcement

Regulatory inconsistency poses a major barrier to green industrialisation. While some G20 nations enforce strong sustainability standards, others attract polluting industries through weaker oversight, undermining global efforts. A harmonised G20 framework, with carbon pricing, mandatory sustainability reporting and strict enforcement, is essential to ensure accountability and prevent the outsourcing of environmental harm.

A new model of global industrial progress

A well-coordinated G20-led green industrialisation strategy can usher in a new era of economic resilience, innovation and environmental stewardship. By advancing financial inclusion, equitable technology access and fair trade, it can help close global development gaps. Yet this transition demands sustained commitment. Market imbalances, policy fragmentation and capacity constraints pose significant risks. Overcoming them will require inclusive strategies, strong diplomacy and multilateral cooperation to align diverse national priorities.

Green industrialisation is not just a climate necessity; it is an economic and social imperative. The G20 is uniquely positioned to set the pace and direction of this transformation. By connecting the objectives of SDG 8, SDG 9 and SDG 10, the G20 can lead a truly inclusive industrial revolution.