A year ago, Eliza Foo was on a dusty road to Parinche village in central India’s Maharashtra state, on her way to meet Kamal Khumbar, known locally as “nani” (grandma).

“She’s a force of power,” says the Director of Impact Investing at Temasek. “Not only has she grown the family’s provision shop business and expanded their dairy farm, she has empowered other women by hiring them, and put her children into school.”

The Khumbar family is one of 97,000 rural households across India that have received loans of up to US$5000 from Temasek-backed company, SarvaGram,  which provides financial and productivity solutions to rural India. Temasek’s 2022 investment extends SarvaGram’s reach and impact, and brings it closer to its ambition of uplifting a million households and five million lives.

For Eliza, Kamal’s success reaffirms the impetus behind the investment: that doing well and doing good can go hand-in-hand. “You really see the multiplier effect of capital. When you invest in impact funds and businesses, it flows down, and you see tangible outcomes not just financially, but in communities and families.”  

As Temasek’s impact spreads further into emerging markets, including India, Indonesia and Africa, the rural roads and landscapes of these countries have become familiar terrain for Eliza. “Meeting the families, you see the difference you make. It’s a powerful reminder that our work matters.” 

A Move to impact

An investment banker and private equity professional, Eliza moved to Temasek in 2018 to lead its new sustainability investing and financing team.

“It was a bold move by the leadership,” she says. “Targeting net zero carbon emissions attributable to our portfolio by 2050 was very ambitious. Many wondered how we would achieve this target, but Ho Ching, who was CEO then, and Dilhan Pillay, our current CEO were clear that this was important, and that we had to lead the way.”

“To me, that is true leadership. Today, sustainability is embedded in everything we do.”

It was the same bold spirit that led to the creation of a dedicated Impact Investing team in 2020, to focus on investments that generate measurable social and environmental impact alongside financial returns. Eliza views this as an extension of Temasek's sustainability pillar, which integrates environmental, social and governance factors into investment decisions. “If you want true sustainability, then building community resilience must be part of it,” she argues. A passion for impact investing saw her jump at the opportunity to be part of the then three-person team tasked with getting the initiative off the ground.

“For the first year, I was still in my sustainability investing role and was double-hatting. We just worked on this whenever we could,” she recalls. As COVID-19 spread across the globe, and much-needed capital left emerging markets, it became clear where the team needed to focus its efforts. “We wanted to support the underserved in emerging markets. This included investing in leading impact funds and companies, while simultaneously building our own capabilities and leadership in the space.”

There were significant challenges, from gaps in impact data and benchmarks and the lack of impact capabilities to scepticism – was it actually possible to achieve financial returns

Temasek’s extensive network played a crucial role. “It opened doors for collaboration,” Eliza says. “We connected with the leading players in the impact space – we probably met around 200 impact funds – to benchmark best practices.”

The team gained insights into the companies that impact funds invested in, how they differentiated themselves, measured their impact, and achieved their outcomes. “There was a lot of learning from speaking to others and looking at what they were doing,” she says.

By investing in strategic partners like LeapFrog Investments and ABC Impact, and through direct and co-investments, like SarvaGram, Temasek’s Impact Investing team is driving positive impact in emerging markets.

“Some investors may see these spaces as risky,” Eliza says, “but we’re familiar with these geographies. It allows us to identify strong partners, opportunities and business models, and puts us in a unique position to catalyse positive change,” she says.

The team also looks to catalyse the impact investing ecosystem through thought leadership and capability-building initiatives.

As focused as she was on the impact she was having thousands of miles away, Eliza was taken by surprise by the impact she was having closer to home.

“My daughter’s teacher asked her class what they wanted to be when they grew up – and she said she wanted to be an impact investor,” she laughs. “I’m not sure she knows exactly what I do, but she knows it makes a difference, and that inspires her.”

Purpose, realised

Four years after it launched, Temasek’s Impact Investing team remains a lean, six-member unit, but it is already gaining recognition for its achievements. Most recently, Temasek was voted Limited Partner of the Year (Climate) at the New Private Markets Awards 2023.

“It was strong validation, and confirmed our efforts were being directed in the right way,” says Eliza. She acknowledges that there is still more to be done to demonstrate through real-life cases that returns and impact do not have to be mutually exclusive.

To do this, the team, like Eliza, spends considerable time on the ground, gathering data and insights. It’s a job not only intrinsically linked to Temasek’s purpose – ensuring that every generation prospers – but also to the personal purpose of those in the small, tightly-knit group.

“We all feel very strongly about impact investing, and there’s a lot of energy that comes with that,” she says. “I can confidently say that we have one of the most passionate teams in Temasek.”