While traditional inflation narratives center on cost-push, demand-pull, and structural supply shocks, 2025 introduced a fourth paradigm: Greenflation. The rapid transition to a low-carbon economy has driven prices higher in specific sectors, particularly those reliant on rare earths, energy storage, and carbon credit markets.

Buglocon analysts forecasted this inflection in early 2024 and began positioning multi-asset portfolios accordingly. The sharp rise in ESG-linked demand, combined with regulatory pressure and limited renewable infrastructure, caused significant asset repricing across equities, commodities, and even corporate debt.

Our “Greenflation Portfolio Basket” includes exposure to clean tech, green sovereign bonds, and firms with verifiable emissions reduction strategies. Quantitative risk models show that integrating Greenflation as a fourth inflation type improves portfolio diversification, particularly during stagflationary periods.

We urge asset allocators to view sustainability not merely as a virtue signal, but as a pricing factor that requires active rebalancing in modern portfolios.