Temasek has been pushing the sustainability agenda aggressively, mainly through its annual Ecosperity Week conference, with the most recent edition held in June.
The state-owned investor has also lifted its internal carbon price from US$42 ($58) per tonne of carbon dioxide equivalent (tCO2e) to US$50. It expects to increase this price progressively to US$100 by the end of this decade.
By 2030, Temasek aims to halve net carbon emissions by its portfolio from 2010 levels to 11 million tCO2e, with plans to reach net-zero carbon emissions by 2050.
But the path to sustainability will not be smooth, admits Temasek’s chief investment officer Rohit Sipahimalani.
While their critics would argue that Temasek’s investment decisions may appear hypocritical at times, Sipahimalani argues: “We also want to invest in some sectors or companies which may be carbon emitters today, but are working on a transition to be low-carbon emitters … We may invest in a carbon emitter today, which could see the emissions go up with the idea of reducing it further because we see not only just being good for the world, but also that’s where a lot of value can be created.”
See also: Temasek launches investment subsidiary GenZero, focused on decarbonisation
Temasek launched GenZero on June 6, a wholly-owned investment platform company dedicated to accelerating decarbonisation globally. It has also committed an initial amount of $5 billion into the subsidiary.
GenZero will invest globally across three focus areas: Technology-based solutions, nature-based solutions and carbon ecosystem enablers.
Frederick Teo, formerly the managing director of sustainable solutions at Temasek International, became GenZero CEO on July 1. He also held various leadership positions in sustainability, portfolio management and business continuity management in his 12 years at Temasek International.
See also: Temasek's portfolio crosses $400 bil mark, leans on unlisted assets with stock markets down
At a media briefing on June 6, Teo said there is no fixed allocation of the $5 billion sum among the three target areas. He also said GenZero employed some 20 staff, and are looking “to build to perhaps about 30 or 40 within a year or two”.
Frederick Teo, CEO-designate, GenZero and managing director, sustainable solutions, Temasek International, and Steve Howard, chief sustainability officer, Temasek International. Photo: Temasek
GenZero’s board of directors is chaired by Sunny Verghese, co-founder and group CEO of Olam. Verghese was formerly the chairman of the World Business Council for Sustainable Development. Members of the board include president of the Global Compact Network Singapore Goh Swee Chen, Temasek International chief sustainability officer Steve Howard, Proforest group director Ruth Nussbaum and Temasek International’s operating partner Alan Thompson.
Temasek has come under scrutiny for backing firms with large carbon footprints even as it pledges to reduce net carbon emissions, reports Bloomberg.
Temasek’s holdings include national carrier Singapore Airlines (SIA), along with a port operator and an offshore oil rig company. The Civil Aviation Authority of Singapore (CAAS), SIA and Temasek will also launch the sale of Sustainable Aviation Fuel credits this month.
Sembcorp Industries also targets that its sustainable solutions portfolio will contribute 70% of the group’s net profit by 2025.
Infographic: Temasek
