Independent Practitioner's Report

We have undertaken a limited assurance engagement in respect of the Selected Portfolio Emissions Metrics, contained in the Temasek Review 2024 (the “TR 2024”), for the financial year ended 31 March 2024.

Selected Portfolio Emissions Metrics

The basis of preparation for the above Selected Portfolio Emissions Metrics is set out in Appendix I (the “Reporting Criteria”).

Our assurance engagement was with respect to the financial year ended 31 March 2024. We have not performed any procedures with respect to (i) earlier periods and (ii) any other elements included in the TR 2024, and therefore do not express any conclusion thereon.

Management’s Responsibility

Management is responsible for establishing suitable criteria for preparing the Selected Portfolio Emissions Metrics and for the preparation of the Selected Portfolio Emissions Metrics in accordance with the Reporting Criteria.

Management is also responsible for designing, implementing and maintaining internal control over information relevant to the preparation of the Selected Portfolio Emissions Metrics that is free from material misstatement, whether due to fraud or error.

The Selected Portfolio Emissions Metrics have been prepared to assist management to report the Selected Portfolio Emissions Metrics to Temasek’s Board of Directors and for inclusion in the TR 2024 using the Reporting Criteria designed for this purpose. As a result, the Selected Portfolio Emissions Metrics may not be suitable for another purpose.

Practitioner’s Independence and Quality Management

We have complied with the independence and other ethical requirements of the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Singapore Standard on Quality Management 1 which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

A limited assurance engagement involves assessing the suitability in the circumstances of Temasek’s use of the Reporting Criteria as the basis for the preparation of the Selected Portfolio Emissions Metrics, assessing the risks of material misstatement of the Selected Portfolio Emissions Metrics whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the Selected Portfolio Emissions Metrics. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks.

The procedures we performed included inquiries, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records. Given the circumstances of the engagement, in performing the procedures listed above we:

• Evaluated the suitability of the Reporting Criteria as a basis to prepare the Selected Portfolio Emissions Metrics;
• Through inquiries, obtained an understanding of Temasek’s control environment and the information systems relevant to the preparation of the Selected Portfolio Emissions Metrics. However, we did not evaluate the design of control activities, obtain evidence about their implementation or test their operating effectiveness;
• Evaluated whether Temasek’s methods for developing estimates are appropriate and had been consistently applied. However, our procedures did not include testing the data on which the estimates are based or separately developing our own estimates against which to evaluate Temasek’s estimates;
• For a limited sample of assets, reconciled the emissions data back to the underlying records. However, our procedures did not include the corroboration of the underlying greenhouse gas emissions and financial data; and
• Considered the presentation and disclosure of the Selected Portfolio Emissions Metrics.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Accordingly, we do not express a reasonable assurance opinion about whether Temasek’s Selected Portfolio Emissions Metrics have been prepared, in all material respects, in accordance with the Reporting Criteria.

Inherent Limitations

In designing these procedures, we considered the system of internal controls in relation to the Selected Portfolio Emissions Metrics and reliance has been placed on internal controls where appropriate. Because of the inherent limitations in any accounting and internal control system, errors and irregularities may nevertheless occur and not be detected.

The absence of a commonly used generally accepted reporting framework or a significant body of established practice on which to draw to evaluate and measure subject matter allows for different, but acceptable, measurement techniques that can affect comparability between entities and over time. As there are currently no legislative requirements or regulation prescribing the preparation, disclosure and verification of Temasek’s portfolio emissions, the Selected Portfolio Emissions Metrics need to be read and understood together with the Reporting Criteria.

The quantification of the greenhouse gas emissions data underlying the Selected Portfolio Emissions Metrics is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases, and the estimation uncertainty from the measurement and calculation processes used to quantify emissions within the bounds of existing scientific knowledge. This can affect the ability to draw meaningful comparison of Temasek’s portfolio emissions over time.

Conclusion

Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the Selected Portfolio Emissions Metrics for the financial year ended 31 March 2024 are not prepared, in all material respects, in accordance with the Reporting Criteria.

Purpose and Restriction on Distribution and Use

This report, including our conclusion, has been prepared solely for Temasek in accordance with the letter of engagement between us. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Temasek for our work or this report.

Yours faithfully

PricewaterhouseCoopers LLP

Public Accountants and Chartered Accountants
Singapore

1 July 2024

Appendix I — Reporting Criteria

Portfolio Emissions Metrics: Explanatory Notes on Definitions and Methodology Used

We report the following portfolio emissions metrics with reference to the Greenhouse Gas (GHG) Protocol, as well as recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) for Asset Owners:

Our portfolio emissions encompass Temasek’s direct investments in public and private equities. Our investment positions in private equity funds, credit, and other assets are excluded.

The portfolio emissions reported include Scope 1 and Scope 2 emissions of the underlying companies based on the latest available data sets.

We use a combination of company-reported emissions data and modelling approaches to establish our portfolio emissions based on our proportionate shares (i.e., ownership interests) in the assets.

We adopt the following hierarchy in data sources as we establish our portfolio emissions, taking into account availability and timeliness of reported data:

1. Company-reported data: GHG emissions data that is reported by the company, either directly to Temasek or made available through S&P Global Sustainable1.
2. Company-specific estimates: GHG emissions for each company modelled or estimated by Temasek or S&P Global Sustainable1 using relevant industry level carbon intensity or carbon efficiency averages as proxies (GHG emissions normalised by revenue / market capitalisation / other relevant operational unit of measurement). In case industry averages do not provide a meaningful proxy for the company, carbon intensity or efficiency data of comparable peers may be used instead.