Sustainability
Our commitment to sustainability is integral to building a thriving and resilient portfolio that enables us to deliver sustainable returns over the long term.
Sustainability is at the core of everything we do — from our mandate to deliver sustainable returns over the long term, to our strategy of how we operate as an institution, shape our portfolio, and engage our portfolio companies to build sustainable businesses.
Our long-term success is contingent on the presence of vibrant businesses and economies, cohesive societies and communities, and a resilient planet.
We have been advancing our net zero efforts through decarbonising our existing portfolio, making new investments, forging partnerships, and building platforms.
With an increasing recognition of the interconnectedness between climate change, the natural environment, and social impact, we have also started to take an integrated approach in how we systematically strengthen our contribution to nature positive and inclusive growth. We do so through our Nature and Social Roadmaps, which are multi-year initiatives to advance social and nature positive practices within our portfolio.
Find out more about our sustainability strategy
Find out more about our approach to sustainability governance
Sustainability Milestones
In recent years, we achieved several milestones in our sustainability journey.
We took part in the International Sustainability Standards Board's (ISSB) COP28 Declaration of Support, joining close to 400 organisations across 64 jurisdictions in committing to advance the ISSB's global baseline for consistent and comparable climate-related disclosures.
We launched our inaugural Sustainability Report, which brings together our disclosures and tracks our progress. Our report takes into consideration the disclosure requirements issued by the ISSB.
Our internal carbon price was raised from US$50 per tCO2e17 to US$65 per tCO2e on 1 April 2024. We expect to progressively increase this to US$100 per tCO2e by 2030.
Any initiative addressing the climate crisis cannot be undertaken without collaboration. We continue to forge partnerships and work with like-minded partners. In doing so, we harness the collective strengths of our networks to catalyse and scale positive impact.
Our efforts have included partnerships to scale climate tech innovations, such as the establishment of Breakthrough Energy Fellows - Southeast Asia with Breakthrough Energy and Enterprise Singapore.
We also collaborate to deploy innovative financing solutions that enable a just and inclusive climate transition in emerging markets and developing economies. For example, we are partnering the Monetary Authority of Singapore (MAS) on several initiatives, such as the Green Investments Partnership, which is part of MAS' Financing Asia's Transition Partnership, a blended finance mechanism to accelerate a sustainable transition in the region.
This year, we convened Ecosperity Week 2024, a milestone edition as we marked the platform's 10th anniversary. The need to protect and restore nature featured high on the agenda, alongside the role of philanthropic capital and blended finance in bridging the climate finance gap.
Find out more about our sustainability strategic partnerships and platforms
As an investor and owner, we strive to build a portfolio of companies that contribute to the resilience and progress of our environment and society.
Sustainable Living, one of the four structural trends that guides our portfolio construction, is a megatrend which has pervasive impact across all sectors and business models. We have stepped up the deployment of capital to enable the transition to a more sustainable future.
As at 31 March 2024, our investments that are aligned with the Sustainable Living trend represented 12% of net portfolio value. This comprises sustainability-focused investments and climate transition investments, which include established businesses as well as companies with disruptive ideas in key focus areas such as food, water, waste, energy, materials, clean transportation, and the built environment.
Pathways Towards Our Climate Targets
Our target is to reduce the net carbon emissions attributable to our portfolio to half of its 2010 levels by 2030, with the ambition to achieve net zero by 2050. This requires determined and sustained action.
In recent years, we have accelerated efforts to achieve our climate targets through three pathways:
Investing for a Low-Carbon Economy
We continue to step up investments that support the transition towards a low-carbon economy. These include solutions that seek to accelerate energy transition and decarbonisation across key sectors, be it through the advancement of hydrogen technologies, energy-efficient solutions, or alternative production processes in hard-to-abate sectors.
Encouraging Decarbonisation Efforts in Our Portfolio Companies
Our long-term investment horizon, which can span decades, puts us in a unique position to engage our portfolio companies on their business transformation and adoption of carbon mitigation actions.
Find out more about our efforts to engage portfolio companies
Enabling Carbon Markets Solutions
We continue to explore approaches that support decarbonisation while conserving or restoring natural systems. We view voluntary carbon markets as an important lever in enabling nature-based and technology-based solutions. Through GenZero, we continue to invest in strengthening the carbon markets infrastructure and ecosystem.
Advancing Sustainability Through Strategic Partnerships and Platforms
We have stepped up efforts through our strategic partnerships and platforms to accelerate industry transitions, further diversify and augment the financing toolbox, and grow the green economy.
One such partnership is Decarbonization Partners, our joint venture with BlackRock. It recently closed its inaugural late-stage venture and early-growth private equity investment fund, Decarbonization Partners Fund I, at US$1.4 billion in committed capital. The Fund has invested in more than five companies covering areas such as carbon capture, utilisation, and storage; next-generation energy; and carbon management services.
GenZero has built up a diversified portfolio by actively deploying capital across nature-based solutions, technology-based solutions, and carbon ecosystem enablers. Examples of GenZero's investments include a land restoration project in Ghana; sustainable aviation fuel-related technology companies such as Velocys; and a carbon marketplace and exchange, Climate Impact X (CIX). GenZero has also seen further validation of its investment in CIX with Mizuho Financial Group coming on board as an additional lead investor to scale the voluntary carbon credits market in Asia.
Our ability to deploy capital flexibly has enabled us to look beyond traditional financing approaches. Alongside other partners, we strive to address climate financing gaps with varied and innovative solutions. These include blended and/or transition finance mechanisms that can better support the development and scaling of sustainable infrastructure.
Clifford Capital Holdings is one of our platform companies providing debt financing solutions for the infrastructure and maritime sectors. It has structured and issued three project and infrastructure debt securitisation transactions for eligible green and social loans since its first issuance in 2018, with its most recent issuance in September 2023.
Pentagreen Capital, our joint venture with HSBC, has started to catalyse financing for sustainable infrastructure projects in Asia. It signed its first transaction with Philippines-based solar development company Citicore Solar Energy Corporation, structuring a US$100 million mezzanine construction green loan with an initial tranche of US$30 million. The initial tranche supports a portfolio of six solar projects in the Philippines and is expected to enable more than US$300 million in total project capital value. The transaction reflects Pentagreen's potential as a specialised lender to remove barriers to bankability.
Emissions Associated with Our Portfolio
We have been disclosing the carbon emissions attributable to our investment portfolio as part of our annual reporting18 and we are tracking the progress towards our climate targets.
Total Portfolio Emissions19 have decreased from 27 million tonnes of carbon dioxide equivalent (tCO2e) for the financial year ended 31 March 2023 to 21 million tCO2e for the financial year ended 31 March 2024. The reported Total Portfolio Emissions encompass 77%20 of the portfolio as at 31 March 2024.
Portfolio Weighted Average Carbon Intensity21 has also decreased from 116 tCO2e/S$M revenue for the financial year ended 31 March 2023 to 92 tCO2e/S$M revenue for the financial year ended 31 March 2024.
(for year ending 31 March)
Towards Net Zero
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Historical Total Portfolio Emissions2
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Total Portfolio Emissions2 (Illustrative)
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Negative Emissions3 (Illustrative)
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Pathway for Net Portfolio Emissions (Illustrative)
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Calendar year emissions data and targets are reported in the subsequent financial year
1 tCO2e refers to tonnes of carbon dioxide equivalent, a standard unit of measurement used in greenhouse gas emissions accounting and reporting.
2 Total Portfolio Emissions reflect the absolute emissions (Scope 1 and Scope 2) associated with our investment portfolio, expressed in tCO2e. Our investment positions in private equity funds, credit, and other assets are excluded.
3 Negative emissions acquired through investments and high-quality carbon offsets.
Find a more detailed breakdown of our portfolio metrics and targets
Broader Engagement with Portfolio Companies
Beyond engaging with portfolio companies on their decarbonisation journeys, we also work with them on opportunities to drive value creation by stepping up Environmental, Social, and Governance (ESG) practices. This includes engaging them through our ESG value creation playbook.
We proactively promote good governance, ethical business practices, and compliance with applicable laws. We also support our portfolio companies in building capacity for sustainability leadership and carbon emissions management.
Find out more about how we engage our portfolio companies on sustainability
Our focus on sustainability extends from portfolio to planet to people.
At Temasek, we strive to foster a company culture that embraces sustainability.
Reducing Environmental Impact Arising from Our Operations
We continue to uphold our commitment to carbon neutrality in our operations by harnessing all levers to reduce emissions, and are making strides through various initiatives and programmes.
Over the year, we saw an increase in our overall indirect emissions from our operations, mainly due to the resumption of business travel post-pandemic.
However, we remain judicious on the need for business travel and have introduced several measures to promote sustainable and disciplined travel practices. These include the introduction of a carbon charge for business travel, pegged to our internal carbon price.
Our efforts to procure electricity from renewable sources for our UK and India offices, as well as the Renewable Energy Certificates obtained for our Singapore office, have resulted in a decrease in emissions in relation to electricity consumption.
In 2023, our Singapore office received the Green Mark Award (Platinum) from the Singapore Building and Construction Authority, recognising our efforts to create a more sustainable and resource-efficient office environment.
To compensate for residual emissions from our operations, we purchase carbon credits through Climate Impact X. We prioritise carbon credits with higher ratings and more recent vintages for our purchases.
We remained carbon neutral in our operations for the fifth year running, as at 31 March 2024.
Read more about how we are reducing the overall environmental impact arising from our operations
Developing a Diverse, Equitable, and Inclusive Institution
We value diversity, equity, and inclusion. We foster an inclusive environment for our employees, one that respects and embraces differences across a wide range of dimensions, regardless of gender, age, religion, sexual orientation, nationality, ethnicity, physical ability, or neurodiversity. Guided by our MERITT values, we forge a culture where everyone feels respected, empowered, and is treated fairly.
Our Inclusivity@Temasek initiatives continue to strengthen our diversity practices and reinforce our culture of belonging. One such initiative, Temasek Women’s Network, supports and inspires our female staff in their career journeys.
Today, our staff encompass 34 nationalities with a gender mix of 54% male and 46% female. We continue to embrace and work towards diversity while ensuring a fair, meritocratic, and inclusive workplace.
Capacity Building and Knowledge Sharing
Our employees are critical to advancing a more sustainable organisation. We continuously upskill and equip them with diverse skill sets and competencies to navigate an increasingly complex world, and to remain relevant for the future.
We have also expanded our mandatory learning programmes to include topics such as our approach to sustainability, as well as diversity and inclusivity.
For the year ended 31 March 2024, every staff underwent an average of 35 hours of training.
Developing a Culture of Sustainability
More than 90% of our staff took part in sustainability-focused initiatives for the year ended 31 March 2024. These included a self-paced learning programme on our sustainability efforts, and activities such as a shoe recycling drive, upcycling workshops, as well as mangrove monitoring to assess the carbon abatement potential of urban mangrove habitats.
Find out more about how we are fostering a company culture that embraces sustainability