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Investors Ditch Climate for Health: A New ESG Priority
16 Apr
Summary
- Climate change fell to 5th place in ESG investor priorities, replaced by health.
- Funding for health-tech accelerated, while clean and climate tech saw a decline.
- Climate action's political toxicity has led to 'greenhushing' even in major institutions.
Investor priorities have significantly shifted, with health now eclipsing climate change as a primary ESG concern. Berenberg Bank's recent survey revealed climate change fell to fifth place among institutional investors, a notable decline from its previous top rankings. This pivot towards health is further evidenced by PitchBook's analysis, which showed a decrease in clean and climate tech venture capital deals in 2025, contrasted with a substantial acceleration in health-tech funding.
The surge in health-tech investment is fueled by the profitability of sectors like GLP-1 weight loss drugs and the growing wellness industry, which offers services such as precautionary body scans. Conversely, climate action has faced considerable headwinds, including US government policy shifts and funding cuts, making the issue politically contentious. This environment has even led to 'greenhushing,' where institutions self-censor climate references to avoid scrutiny.
Despite the investor pivot, climate change poses significant health risks. Rising temperatures exacerbate heat-related illnesses, increase the spread of vector-borne diseases like dengue and Lyme disease, and negatively impact mental health and chronic conditions. Sea-level rise contributes to health issues through saltwater intrusion and sanitation system failures. Electrifying heat and transport, while reducing emissions, also cuts air pollution, which causes millions of premature deaths annually.
