Financing transformation

Healthcare systems are increasingly positioned on the frontline of the climate crisis, as climate-related hazards threaten hospital functionality and service continuity while health systems remain essential to societal resilience and recovery (Fallah-Aliabadi et al., 2020;Moitinho de Almeida et al., 2021;Or & Seppänen, 2024;UNDRR, 2025). Healthcare systems are increasingly positioned on the frontline of the climate crisis, as climate-related hazards threaten hospital functionality and service continuity while health systems remain essential to societal resilience and recovery (Fallah-Aliabadi et al., 2020;Moitinho de Almeida et al., 2021;Or & Seppänen, 2024;UNDRR, 2025). As critical infrastructure, hospitals face increasing exposure to extreme weather events, energy insecurity, and supply chain disruptions, risks that directly threaten the continuity of essential health services (UNDRR, 2019; Matsuoka & Rocha, 2020). Paradoxically, healthcare systems account for approximately 4-5% of global greenhouse gas emissions, driven by energy-intensive operations, waste generation, and carbon-intensive procurement chains (Lenzen et al., 2020;Karliner et al., 2020). Crucially, climate impacts on hospitals are not only a health or environmental concern but also a financial and macroeconomic one. Disruptions to hospital services during climate-related disasters generate cascading costs, including emergency service rerouting, delayed elective care, excess morbidity and mortality, damage to high-value assets, and prolonged recovery expenditures, with particularly severe consequences in resource-constrained settings (Moitinho de Almeida et al., 2021;UNDRR, 2025).The economic costs of service interruption often exceed the upfront costs of anticipatory resilience investments; at present they remain largely invisible in prevailing climate finance debates. Global evidence reinforces this economic rationale. The UN Office for Disaster Risk Reduction's Global Assessment Report 2025 demonstrates that underinvestment in disaster risk reduction generates self-reinforcing macroeconomic "loss spirals," characterised by repeated service disruption, rising debt, and declining fiscal space, particularly in low-and middle-income countries (UNDRR, 2025). Critically, the report shows that proactive resilience investments yield a "triple dividend" reduced loss, improved economic stability, and increased long-term investability reinforcing the financial logic of safeguarding critical public infrastructure such as hospitals. Health service continuity, therefore, represents one of the strongest, least articulated, economic rationales for financing climate resilience.Empirical evidence from post-disaster settings shows that when hospitals fail to maintain functional continuity, the impacts extend beyond health outcomes to prolonged system disruption, staff attrition, and delayed recovery, particularly in low-and middle-income countries (Moitinho de Almeida et al., 2021). This perspective aligns with established hospital resilience frameworks, which conceptualise resilience not only as physical robustness but as the capacity to maintain core functions, absorb shocks, and adapt operations under extreme stress (Fallah-Aliabadi et al., 2020). It also aligns closely with the Sendai Framework for Disaster Risk Reduction, which recognises health facilities as critical infrastructure whose failure amplifies disaster losses across sectors and emphasises governance, preparedness, and continuity of essential services through an all-of-society approach (Matsuoka & Rocha, 2020). Hospitals' dual role as climate-vulnerable infrastructure and high-emitting institutions therefore positions them as a compelling test case for climate finance.Recent developments in Loss and Damage (L&D) financing under the United Nations Framework Convention on Climate Change (UNFCCC) reflect growing recognition that essential public institutions, not only communities, require dedicated resources to withstand, absorb, and recover from climate impacts (UNFCCC Secretariat, 2023). In this context, green hospitals are defined not narrowly as carbon-reduction initiatives, but as health facilities that integrate mitigation, adaptation, and operational resilience, including energy and water security, waste management, supply chain robustness, and continuity of care under climate stress (Karliner et al., 2020;Eckelman et al., 2018). Systemic climate resilience is conceptualised as the capacity of health systems to absorb shocks, adapt to evolving risks, and sustain essential services over time, consistent with emerging hospital resilience frameworks (Fallah-Aliabadi et al., 2020). However, as in broader climate finance, hospital greening initiatives have often remained fragmented, voluntary, and carbon centric. Without embedding resilience into governance, accreditation, and financing frameworks, progress risks remaining symbolic rather than transformative, highlighting a central challenge for L&D finance: shifting from compensatory, post-disaster responses toward anticipatory, system-level investments that safeguard service continuity across critical public systems (Weikmans & Roberts, 2019;OECD, 2021).The establishment of the Loss and Damage (L&D) Fund under the UNFCCC marked a significant shift in international climate governance, recognising that climate harms already exceed adaptation limits and require dedicated financing grounded in climate justice (Roberts & Huq, 2015;Dafermos, 2025;Kumar, 2024). Early L&D-related instruments provide an important proof of concept for anticipatory and risk-based finance. Parametric insurance schemes in the Caribbean have demonstrated rapid, rules-based payouts following extreme events, while debt-for-climate swaps in small island states have created fiscal space for longer-term resilience investments beyond immediate recovery (Essers et al., 2021;Bhandary et al., 2021). Although limited in scale and unevenly distributed, these mechanisms illustrate how climate finance can prioritise speed, predictability, and risk reduction rather than reactive compensation alone (Mechler & Deubelli, 2021). The health sector, particularly hospitals, mirror this trajectory. The green hospital movement demonstrates that financing sustainability is technically feasible and can generate measurable benefits. Investments in energy efficiency, renewable energy, and waste management have been shown to reduce operational costs while lowering emissions, especially in high-income health systems with stronger capital access and technical capacity (Eckelman et al., 2018;Chen-Xu et al., 2024). Furthermore, waste management and procurement reforms can embed hospitals within circular economy models when supported by enabling regulatory frameworks and governance capacity (Mortimer et al., 2018;Janik-Karpinska et al., 2023;Or & Seppänen, 2024). Telemedicine similarly illustrates emissions reduction potential, though benefits remain contingent on digital infrastructure, regulatory acceptance, and equitable access (Rodler et al., 2023). However, empirical evidence on cost recovery, resilience co-benefits, and scalability in low-and middle-income country hospital settings remains limited.Beyond technical feasibility, both L&D finance and green hospital initiatives have generated important symbolic visibility. Climate-vulnerable countries have succeeded in elevating Loss and Damage within global climate negotiations, while hospitals, highly trusted public institutions, have helped legitimise sustainability agendas within health systems and local communities (Weikmans & Roberts, 2019;UNFCCC Secretariat, 2023). However, this proof of concept remains partial. Without embedding financing mechanisms into governance, accountability, and resilience-oriented performance frameworks, early achievements risk remaining fragmented and fragile, insufficient to drive the structural transformation required to sustain health services under escalating climate stress (Lenzen et al., 2020).Fragmentation, inequity, and symbolic visibility in climate and health systems Despite advances in L and D finance and green hospital initiatives, both domains face structural constraints that risk confining progress to symbolic rather than systemic change. Fragmentation remains a central limitation. In climate finance, the proliferation of funds and mechanisms has created overlapping architectures that generate duplication, competition, and administrative bottlenecks, delaying resources to those most in need (Weikmans & Roberts, 2019;Bhandary et al., 2021). The health sector mirrors this pattern: green hospital initiatives are often implemented as stand-alone projects, such as energy retrofits or recycling schemes, without integration into regulatory, accreditation, or financing frameworks, leaving them vulnerable to shifting political priorities (Mortimer et al., 2018). Inequity in access and capacity, further constrains impact. Climate finance eligibility and reporting requirements continue to disadvantage low-and middle-income countries with limited institutional capacity (Dafermos, 2025;Kumar, 2024). Similarly, while high-income health systems can invest in renewable energy and sustainable procurement, many resource-constrained hospitals struggle to secure basic infrastructure such as reliable electricity and water supply (McGain & Naylor, 2014;Chen-Xu et al., 2024). This uneven distribution risks entrenching a two-tier model of resilience, in which sustainability becomes a feature of affluent systems rather than a universal health system requirement. Carbon tunnel vision compounds these challenges, climate finance negotiations remain shaped by power asymmetries between donor and recipient countries, influencing which risks are prioritised and which costs are deemed financeable (Weikmans & Roberts, 2019;Dafermos, 2025). Within health systems, sustainability mandates frequently encounter institutional resistance when perceived as competing with immediate clinical demands or unfunded operational pressures (Mortimer et al., 2018;Karliner et al., 2020). In resource-constrained settings, hospital leaders face persistent trade-offs between short-term service delivery and longer-term resilience investments, reinforcing reactive rather than anticipatory decision-making (McGain & Naylor, 2014;Moitinho de Almeida et al., 2021). These constraints are often intensified by private sector lock-in, as long-term energy, infrastructure, and procurement contracts limit flexibility and inadvertently reinforce carbon-intensive pathways, even where sustainability goals are formally endorsed (Or & Seppänen, 2024;Eckelman et al., 2018). Without mechanisms that explicitly link financing to continuity of care and risk reduction, progress risks becoming performative, visible but shallow. Taken together, these limitations highlight a shared dilemma: fragmented, inequitable, and symbolic finance can stall deeper reform by creating the appearance of action without altering underlying incentives or power relations.The establishment of the Loss and Damage (L&D) Fund and the growing visibility of green hospital initiatives expose a shared tension in climate and health financing: important political and institutional breakthroughs risk remaining largely symbolic when they are not embedded within governance, financing, and accountability systems. Across both domains, progress has demonstrated feasibility, however, feasibility alone has not translated into durable protection of essential services under accelerating climate stress (Weikmans & Roberts, 2019;OECD, 2021;Lenzen et al., 2020). In the health sector, this is particularly consequential: hospitals are not only sites of care delivery but critical public infrastructure whose failure amplifies social, economic, and health losses during climate-related shocks (UNDRR, 2025;Moitinho de Almeida et al., 2021).Moving beyond this impasse requires reframing climate and health financing around transformation rather than compensation. Transformation, in this context, does not imply technological novelty, but institutional change, embedding resilience as a core fiscal and governance objective rather than a discretionary add-on. For climate finance, this entails integrating L&D resources into national development planning, disaster risk reduction strategies, and public financial management systems, ensuring complementarity with adaptation, health, and social protection budgets (Dafermos, 2025;UNFCCC Secretariat, 2023). For hospitals, it requires embedding sustainability and resilience into accreditation standards, capital investment approvals, and procurement frameworks, thereby linking environmental accountability directly to service continuity and system performance (Mortimer et al., 2018;Or & Seppänen, 2024).Financing instruments can support this shift when they are explicitly designed to reward risk reduction and continuity rather than recovery alone. Evidence from parametric insurance schemes and debt-for-climate swaps illustrates how anticipatory, rules-based financing can reduce fiscal volatility and protect essential services by enabling rapid response and sustained investment in resilience (Essers et al., 2021;Bhandary et al., 2021;Mechler & Deubelli, 2021).Equity considerations are central to this transformation. Climate finance architectures, including L&D, remain shaped by power asymmetries that influence which risks are prioritised and which institutions are deemed financeable (Kumar, 2024;Dafermos, 2025). In health systems, these asymmetries manifest in stark disparities between hospitals with access to capital, technical expertise, and stable infrastructure, and those operating under chronic resource constraints. In low-and middle-income settings, investments in basic resilience, such as energy security, water reliability, and supply chain continuity, often yield disproportionately high returns by preventing prolonged service disruption and institutional degradation (McGain & Naylor, 2014;Chen-Xu et al., 2024;Moitinho de Almeida et al., 2021).Accountability mechanisms ultimately determine whether financing catalyses transformation or reproduces performative action. Climate finance commitments have frequently fallen short of delivery, while monitoring frameworks often prioritise financial inputs over outcomes related to risk reduction and service continuity (OECD, 2021;Weikmans & Roberts, 2019). Similarly, in health systems, sustainability certifications and awards tend to emphasise process compliance rather than measurable resilience outcomes, such as avoided service interruptions or recovery time following climate shocks (Eckelman et al., 2018;Janik-Karpinska et al., 2023). Without metrics that link financing to continuity of care, institutional learning, and protection of vulnerable populations, symbolic progress risks obscuring persistent systemic vulnerability.Taken together, these findings suggest that the future relevance of L&D finance, and of hospital sustainability agendas, will depend less on the scale of pledged resources than on the degree to which resilience is institutionalised within governance, financing, and accountability structures. Hospitals illustrate how critical public institutions can serve as practical entry points for this shift: when resilience is embedded into decision-making systems, investments move from visibility toward viability.This manuscript examines the intersection of climate finance and health systems by positioning hospitals as a test case for financing climate resilience. It analyzes the establishment of the UNFCCC Loss and Damage Fund alongside the evolution of the green hospital movement, identifying shared challenges of fragmentation, inequity, and symbolic visibility. By embedding hospitals within global climate finance debates, the article advances scholarship and policy discussions in both climate governance and health system sustainability. The focus on transformative financing, governance integration, and equity aligns directly with the journal's specialty in climate policy, health system resilience, and sustainable development, ensuring relevance for readers across global health, environmental policy, and financing disciplines

Climate change · Extreme weather · Greenhouse gas · Health care · Healthcare system · Procurement · Resilience (materials science · Service (business · Supply chain · Climate Change and Health Impacts · Disaster Response and Management · Global Health and Surgery

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