Temasek Review 2021
Pathways to Sustainability

Investing for Impact and Returns

We have stepped up our efforts to invest in carbon avoidance opportunities, such as renewable energy and plant-based proteins. We look for carbon negative solutions, such as Carbon Capture, Utilisation and Storage (CCUS), as and when these become feasible.

Investing for impact
Sunseap’s first offshore floating photovoltaic system in Woodlands, which transmits generated solar power to the national grid

On the climate and carbon front, we have a three-pronged approach:

  • Investing in climate-aligned opportunities;
  • Enabling carbon negative solutions; and
  • Encouraging decarbonisation efforts in businesses.

Investing in Climate-Aligned Opportunities

We actively sought investments with track records of better carbon intensity and efficiency. For example, we invested in Eavor Technologies, a company that develops technology to harvest geothermal energy; and Svante which specialises in low cost carbon capture technology.

More importantly, however, we are also prepared to work with companies to support their own decarbonisation journeys. These mitigate climate change with clear transition pathways.

Our partnership with BlackRock, Decarbonization Partners, aims to advance decarbonisation for a net zero carbon economy by 2050. An initial funding of US$600 million from BlackRock and Temasek will help launch a series of late stage venture capital and early growth private equity investment funds to crowd in investments for companies and technologies that will reduce or eliminate carbon emissions.

Enabling Carbon Negative Solutions

As a member of the Taskforce on Scaling Voluntary Carbon Markets, a multi-national private sector initiative, we work to enable a more transparent and liquid carbon offset trading market at scale. This is one critical infrastructure to facilitate more investments in robust emissions abatement projects for a net zero world.

Climate Impact X (CIX) is our joint venture with DBS, Standard Chartered and the Singapore Exchange (SGX), a global exchange and marketplace for high quality carbon credits. Announced in May 2021, CIX will focus initially on catalysing the market for nature-based solutions, such as the protection and restoration of forests, wetlands and mangroves. Technologies such as satellite monitoring, machine learning and blockchain technology, will enhance the transparency, integrity and quality of such carbon credits.

To complement this initiative, we have partnered DBS, Google, National University of Singapore (NUS), Verra and the World Bank, to launch the Sustaintech Xcelerator. This supports climate innovators who are developing solutions to improve monitoring and verification of the environmental, social, and economic impacts for evidence-based nature solutions.

We funded research led by the NUS Centre for Nature-based Climate Solutions to understand how blue carbon can mitigate climate change in Southeast Asia. This research will develop a knowledge database of blue carbon stocks in the region and a toolkit for better monitoring, reporting and verification.

Encouraging Decarbonisation Efforts in Businesses

Businesses are a key driver for decarbonisation. We continue to learn and add tools for an evidence-based approach to encourage carbon abatement.

Over the year, we have advanced our dialogue with companies on their climate strategies and emissions reduction plans. We compare notes on knowledge and tools for carbon measurement, physical climate risk assessments, and climate-related disclosures according to international standards.

The Memorandum of Understanding (MOU) with Schneider Electric, a global leader in energy, aims to provide practical solutions for businesses to reduce carbon emissions, lower energy costs and reduce upfront investment needed.

In hard-to-abate sectors such as aviation and transport, we are working proactively to catalyse new solutions or accelerate industry-wide decarbonisation. For example, Temasek and the Maritime and Port Authority of Singapore signed an MOU during the annual Singapore Maritime Week in April 2021, to explore measures such as cleaner ship fuels, and decarbonisation solutions for port operations and maritime supply chains.

We continue to learn and add tools for an evidence-based approach to encourage carbon abatement.

Elsewhere, we harnessed our network to support projects that improved the efficiency of resource management in Singapore's public housing estates; and entered an MOU with Sentosa Development Corporation to lower the carbon footprint of Sentosa Island.

Beyond Carbon Impact

Beyond carbon goals, we believe impact investing has potential, including in underserved markets.

Earlier this year, we partnered LeapFrog Investments, a global impact investment group. This US$500 million strategic partnership aims to provide growth capital to expand the capabilities and resources of the LeapFrog team to uplift communities across Asia and Africa.

This partnership complements our earlier 2019 investment in ABC World Asia, a private equity firm dedicated to impact investing in Asia. Over the past year, ABC World Asia has made strides in building a diverse portfolio of companies across Asia, highlighted in its inaugural impact report.

Environmental, social and governance (ESG) factors are part of our investment framework, alongside our climate and carbon goals. We advocate best practices and encourage businesses to embrace sustainable ways of doing business. One initiative was the Temasek Portfolio Companies (TPC) Sustainability Council, set up last year. This brings together the CEOs and Sustainability Leads of our major TPCs, to share experiences on sustainability strategies, and foster collaboration on common ESG goals.

Beyond carbon goals, we believe impact investing has potential, including in underserved markets.

Members of our Ecosperity Advisory Group and our Clean Energy Advisory Group provided us with valuable guidance and insights. Our Ecosperity Advisory Group focused on Sustainable Living as one of our key investment trends. The dialogues with our Clean Energy Advisory Group helped us to identify new trends, developments, and opportunities to invest in emerging technologies and build ecosystem capabilities. These thought-provoking online discussions during the pandemic shape our transition into a global low carbon energy future, which includes hydrogen, CCUS, advanced biofuels, and fusion.

We advocate best practices and encourage businesses to embrace sustainable ways of doing business.

We have appointed a Chief Sustainability Officer (CSO) to accelerate and amplify our sustainability strategy. Our CSO will engage our portfolio companies and the wider ecosystem to address sustainability challenges and advocate a clear transition to a net zero world.