Temasek may get 'more aggressive' on green goals

It pledges to become carbon neutral by year end, with eye on halving emissions of portfolio firms by 2030

There has been a significant increase in the number of plant-based options in Singapore in recent years.
There has been a significant increase in the number of plant-based options in Singapore in recent years.PHOTO: TEMASEK HOLDINGS

LONDON • Temasek International may accelerate its climate change goals as the company puts environmental, social and governance principles at the heart of its strategies.

Temasek International is the management and investment arm of Singapore investment firm Temasek.

Temasek has pledged to become carbon neutral by the end of the year and aims to halve the emissions of its portfolio companies by 2030. Environmental concerns are understood to be part of the reason it chose not to participate in Saudi Aramco's initial public offering last year.

"We may have to be more aggressive," Temasek International chief executive Dilhan Pillay said in a Bloomberg Television interview on the sidelines of the World Economic Forum in Davos, Switzerland.

"We are thinking about how we can expand a number of sustainability investments."

The firm's climate-conscious investments include a US$500 million (S$675 million) joint venture with Swedish private equity firm EQT to acquire renewable energy generators in India.

Temasek, however, has struggled to balance its new green goals with legacy assets and the need to generate a decent rate of return.

Last October, it announced a $4 billion plan to buy a majority stake in Keppel, which many analysts believe is a prelude to a broader consolidation of Singapore's shipyard and servicing sector.

It also owns a majority stake in Olam International, an agricultural supplier whose interests include palm oil, and national carrier Singapore Airlines, all of which make its carbon emissions goals a challenge to hit.

Temasek reports its results annually and boasted a net portfolio value of $313 billion as of March 31 last year. About 42 per cent of its assets are held in unlisted businesses, ranging from alternative meat-maker Impossible Foods to WeWork's Chinese operations.

"We are thinking about how we can get our companies to work with us on sustainable solutions," said Mr Pillay.

"We are thinking about how we can bring sustainable financing to bring sustainable solutions to emerging markets in particular."

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A version of this article appeared in the print edition of The Straits Times on January 25, 2020, with the headline 'Temasek may get 'more aggressive' on green goals'. Subscribe