Asia stands at the fault line of two escalating crises: climate change and persistent health inequities. The impacts, ranging from air pollution and heat stress to vector-borne diseases, are already defining the lives of billions, reveals a new report titled ‘Unlocking Capital For Climate x Health: The Investment Landscape in Asia’ prepared by social investor network AVPN and Prudence Foundation, in partnership with Catalyst Management Services (CMS).
Data confirms the severity of this convergence: the World Meteorological Organisation reported that Asia experienced the highest number of climate-related disasters in 2023, with storms and floods driving significant casualties and economic losses.
Also Read: Climate tech’s shift from doing good to doing well
In 2021 alone, climate-driven disasters resulted in US$253 billion in damages globally, largely uninsured in low-income regions, and 470 billion work hours were lost due to heat-related impacts. Climate disruption is now considered Asia’s most urgent public health crisis.
Despite this alarming confluence of risk, capital flows remain critically misaligned. The region requires an estimated US$1.1 trillion annually for climate adaptation and mitigation efforts. However, only around 30 per cent of this figure is currently mobilised.
Crucially, only 5 per cent of the global climate finance, which totals US$1.46 trillion, reached adaptation efforts, and only an even smaller fraction was directed towards health.
Health adaptation specifically attracts a meagre 0.5 per cent of global climate finance and just 2 per cent of adaptation funding. This significant mismatch means that frontline solutions required to redesign systems to withstand climate shocks are starved of necessary capital.
The adaptation investment lag
The focus of climate finance has historically leaned heavily towards mitigation, meaning cutting emissions, rather than adaptation, which involves strengthening resilience to endure future risks. While institutional investors in Asia Pacific show significant appetite, with 74 per cent citing climate transition as a strategic priority, fewer than 40 per cent feel confident in their progress.
This gap underscores the structural barriers preventing private capital, especially venture capital (VC) and impact funds, from flowing at the required scale into climate x health solutions.
The adaptation finance landscape in Asia is primarily dominated by public sector entities, with development finance institutions (DFIs) contributing approximately 68 per cent of tracked public climate flows in the region.
Even though the Green Climate Fund (GCF) directed US$976 million to Asia-Pacific between 2019 and 2020 for water, sanitation, and hygiene (WASH) projects, these efforts are insufficient to drive the systemic transformation needed at the climate x health nexus. In fact, between 2018 and 2019, merely 8 per cent of Asia’s climate finance was allocated to adaptation, with an even smaller share targeting health.
Building a cohesive financing architecture
To address this challenge, investors and ecosystem builders are being called upon to shift the narrative around climate x health from a mere co-benefit to a core investment strategy. The convergence of health equity, planetary boundaries, and the just transition provides a compelling frame for Environmental, Social, and Governance (ESG)-aligned capital.
Also Read: Asia’s role in climate change: Risks, rewards, and the road to net-zero
There is early momentum visible in innovations like AI-driven disease surveillance, cooling technologies, and clean air technologies. To truly unlock the necessary private capital, the challenge lies in structuring capital stacks, navigating complex public procurement systems, and proving product-market fit in environments where traditional VC logic often falls short. The overall goal is a long-term reallocation of capital towards adaptation and resilience solutions that can recover from and thrive in the face of climate stressors.
—
The SAFE STEPS D-Tech (Disaster Tech) initiative is a regional programme by Prudence Foundation that supports the development and deployment of innovative technology solutions to improve disaster preparedness, response, and resilience. Through the annual SAFE STEPS D-Tech Awards and Community Hub, the initiative brings together startups, NGOs, governments, investors, and humanitarian actors to co-create impactful solutions that save lives before, during, and after disaster events. By catalysing partnerships and enabling scale, D-Tech serves as a platform to turn promising ideas into real-world systems that strengthen communities across Asia and beyond.
The post Asia’s climate-health crisis deepens amid massive funding gaps appeared first on e27.