On Monday, LHV announced it would be closing its green investment pension fund.

Vahur Vallistu, fund manager at LHV Asset Management, said the world has changed. "In the world's largest stock market — the U.S. — the focus has shifted, at least for now, away from everything green or sustainable," Vallistu said.

He noted that in Europe as well, attention has moved away from green technology toward other sectors, such as the defense industry. "Investments have been withdrawn because the outlook has become more uncertain. The very companies that were expected to see significant future growth — well, that growth has largely failed to materialize," Vallistu said.

Earlier this year, the Sunly green fund shut down without making a single investment. The fund's former manager, Erki Ani, said that while he still sees a future for green investments, the sector is currently in a slump. At the same time, he sees opportunities for a rebound.

"Defense and artificial intelligence emerged, which somewhat cast a shadow over green technology and the investor community as well. But green technology is definitely evolving, meaning we're moving from the digital world more into the industrial world," Ani said.

Venture capitalist Margus Uudam noted that booms and subsequent downturns in sectors are a normal part of the cycle.

"Usually, from the peak of investment, a wave of disillusionment follows, where not everything that glittered turned out to be gold. That leads to a decline, but from that low point comes clarity about where capital is actually worth investing," said Uudam, founder of Karma Ventures. "This current cycle has produced quite a few big winners, but overinvestment has also led to significant losses."

Even so, Uudam added that global priorities have shifted.

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