ESG flux: Do-gooder investors may be shifting to health but mustn’t let climate action trail off

In an April report, Berenberg Bank asked 200 institutional investors which ESG—environmental, social and governance—issues were most important to their funds. Climate change, which had been ranked either No. 1 or No. 2 for the past three years, slipped to 5th place.

The anonymous poll also asked investors about which United Nations Sustainable Development Goals (SDGs), if any, their company targets. Just half said climate action (SDG 13), down from 70% last year.

So, what’s replaced climate at the top of ESG investors’ priority lists? Health. Berenberg isn’t the first to spot this shift. PitchBook’s February analysis of venture capital trends shows deal activity in clean and climate tech declining in 2025, while global VC activity in health-tech accelerated. The private market data provider reported that funding for health-tech was up 26.1% last year over 2024.

There are no prizes for guessing why this might be. Health is a growing and profitable sector. Sales of GLP-1 weight loss drugs have been on the rise, with demand expected to boom as oral formulations are launched and affordability improves.

Meanwhile, an obsession with longevity and wellness has launched a swathe of startups offering services such as precautionary body scans and blood tests.

Climate, on the other hand, has suffered from a barrage of attacks from the US government. The Trump administration has slashed funding, torn up environmental regulations and turned a once-bipartisan issue into something politically toxic—with global implications.

One of the priorities for the International Monetary Fund and World Bank Group spring meetings, for example, is to set a new climate action plan for the World Bank. But reporting in the Guardian suggests that, in a bid to not poke US President Donald Trump, senior staff of multiple international finance and development institutions were “self-censoring” by removing climate references from reports and projects.

If even the IMF and World Bank are greenhushing, then it’s no wonder that institutional investors are shying away from climate too.

In 2024 and 2025, more than 70% of respondents to Berenberg’s survey said they measured the impact of their funds in terms of “emissions avoided.” This year’s poll saw that share drop to little over half, while “resources saved” became the most popular metric.

That speaks to a world in which GLP-1s are reducing food and medical-care needs—and where the benefits of climate-related investment are likely to be framed in other terms: renewables are a means to energy security rather than cleaner skies. Biochar, product of a novel method of carbon removal, boosts agricultural yields rather than removing CO2 from the atmosphere.

But if investors really want to make the greatest impact on our well-being, there’s no more important target than climate change. It’s not just that heatwaves kill. Hot weather increases adverse pregnancy outcomes, negatively impacts mental health and exacerbates chronic conditions like asthma. It ruins our sleep and studies suggest that the hotter it is, the higher the risk of injuries and work-related accidents.

Rising temperatures are also aiding the spread of vector-borne diseases such as dengue and chikungunya. The disease-spreading creepy-crawlies are finding more areas agreeable to their climatic needs, while the pathogens themselves often replicate better at higher temperatures.

A study published in Nature in January projected that climate change would lead to an additional 123 million malaria cases in Africa over the next 25 years. There are also fears that fungi will adapt to a hotter world, leading to new fungal diseases or enabling existing species to infect us more readily.

And temperature itself isn’t the only threat. The Lancet has just launched a commission which will explore how sea-level rise reshapes health. Christiana Figueres, former UN climate secretary and co-chair of the commission, wrote in The Guardian: “When saltwater intrudes into freshwater supplies, health suffers. When floods overwhelm sanitation systems, diseases spread. When farmland is inundated by king tides, nutrition deteriorates.”

On the other hand, climate action is good for our health. Consider efforts to electrify heat and transport, which not only reduce emissions but also cut air pollution—responsible for an estimated 7 million premature deaths per year.

ESG-focused investors could still do a lot of good, no matter how their focus shifts. But if our health is really their top priority, they’re bound to fail if they don’t factor in the climate. ©Bloomberg

The author is a Bloomberg Opinion columnist covering climate change.