Portfolio Metrics and Targets

As a long-term asset owner, we set ourselves a portfolio emissions target to guide our portfolio engagement and to track our progress on emissions reduction over time. In 2019¹, taking reference from the Intergovernmental Panel on Climate Change Special Report on Global Warming of 1.5°C (IPCC SR1.5), we set our ambition to achieve net zero portfolio emissions by 2050, with an interim climate target of halving net emissions attributable to our portfolio by 2030 from 2010 levels².

When we set our climate ambition in 2019¹, the global momentum on climate action was building. The Paris Agreement had taken root, capital was relatively abundant, interest rates were low, and global supply chains were largely stable.

Since then, the operating environment has shifted materially. The energy transition has entered a more complex and uncertain phase, shaped by evolving geopolitical dynamics, tighter fiscal conditions, and less predictable policy signals. At the same time, rapid advances in generative AI are driving a structural increase in energy demand and attracting significant pools of capital — including capital that might otherwise have supported climate transition opportunities.

Today, we are navigating a more challenging intersection between long-term ambition and near-term constraints. Market volatility and higher financing costs are increasing the cost of capital and slowing the pace of long-term investments. Fossil fuels remain deeply entrenched in hard-to-abate sectors such as steel, cement, power, aviation, and shipping, while global energy demand continues to rise. As a result, the transition will be more uneven, contested, and non-linear than previously anticipated. In many respects, our portfolio reflects the realities of the broader global economy — with exposure to hard-to-abate sectors where the technologies and solutions required for decarbonisation are still not commercially scaled or economically viable.

Under current conditions — and given our portfolio exposure to hard-to-abate sectors — we are unlikely to meet our interim 2030 target of halving net portfolio emissions from 2010 levels. This does not reflect a step back from our long‑term net zero ambition. Our 2030 target continues to serve as an important directional marker, befitting our ambition. We will continue to press forward across all available levers, while recognising that the pace of progress must reflect today’s realities.
 

We have embarked on a review of our target to ensure that our 2050 net zero ambition remains current, credible, and actionable. The review takes into consideration evolving methodologies and best practices in target-setting so that the ambition and assumptions underpinning our net zero commitment remain relevant and viable.

¹ Refers to calendar year 2019 (for year ended 31 March 2020).

² The target is based on Total Carbon Emissions as defined in the Task Force on Climate-related Financial Disclosures (TCFD) Supplemental Guidance for the Financial Sector. This metric represents the absolute GHG emissions (Scope 1 and Scope 2) associated with our investment portfolio, expressed in tonnes of carbon dioxide equivalent (tCO₂e). Our investment positions in private equity funds, credit, and other assets are excluded. Given our role as an asset owner and the diversified nature of our portfolio, the emissions target is not disaggregated by individual greenhouse gases; instead, all emissions are quantified on a tCO_₂e basis.

In reporting progress towards our net zero portfolio emissions by 2050 ambition, we draw on metrics that track both our absolute and intensity-based emissions.

Metrics that capture the absolute emissions of our portfolio companies provide us with a clear and consistent way to track our emissions reduction across our investment portfolio. In addition, they help us understand our overall climate impact.

However, we recognise that absolute emissions alone may not fully reflect the breadth and effectiveness of our decarbonisation efforts across our diverse and growing portfolio.

For this reason, we also use intensity-based metrics, which measure emissions relative to a unit of output or economic value.

Intensity-based metrics allow us to:

• account for changes in portfolio size and composition;
• assess efficiency improvements across assets in different sectors and industries;
• have a complementary lens to absolute emissions in evaluating decarbonisation progress; and
• facilitate more meaningful comparisons between companies of different scales or at different stages of growth.

Together, the two types of metrics provide a more balanced and nuanced assessment of our portfolio-level climate performance to support disciplined stewardship and the delivery of meaningful decarbonisation outcomes.

Annually, we measure and disclose both absolute and intensity-based metrics, with reference to the GHG Protocol and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations for Asset Owners.

Total Portfolio Emissions encompass emissions from our direct investments in public and private equities, which account for 79% of our investment portfolio as at 31 March 2026. Our investment positions in private equity funds, credit, and other assets are excluded, given current limitations in the availability of data. The emissions include Scope 1 and Scope 2 emissions of the underlying companies based on the latest available data sets.

We estimate Total Portfolio Emissions using a combination of company‑reported emissions data and modelling approaches, based on our proportionate shares reflecting our ownership interests in the assets.

We adopt the following hierarchy in data sources, taking into account the availability and timeliness of data:

• Company-reported Data (Primary level): This refers to GHG emissions data reported by the company either directly to Temasek or made available through S&P Global Sustainable1.
• Company-specific Estimates (Secondary level): These are estimated GHG emissions for each company arrived at by either Temasek or S&P Global Sustainable1 using relevant industry-level carbon intensity or carbon efficiency averages as proxies (with GHG emissions normalised by revenue, market capitalisation, or other relevant operational unit of measurement). In cases where industry averages do not provide a meaningful proxy for the company, carbon intensity or efficiency data of comparable peers may be used instead.

There has been no change in our measurement approach since the last reporting period.

¹ This metric is also known as Total Carbon Emissions (tCO₂e) within the TCFD Supplemental Guidance for the Financial Sector.

² This metric is also known as Carbon Footprint (tCO₂e/$M invested) within the TCFD Supplemental Guidance for the Financial Sector.

³ This metric is also known as Weighted Average Carbon Intensity (tCO₂e/$M revenue) within the TCFD Supplemental Guidance for the Financial Sector.

Total Portfolio Emissions remained at 21 million tCO₂e for the year ended 31 March 2026. Meanwhile, Portfolio Carbon Intensity and Portfolio Weighted Average Carbon Intensity fell to 50 tCO₂e/S$M portfolio value and 83 tCO₂e/S$M revenue respectively, from 57 tCO₂e/S$M portfolio value and 89 tCO₂e/S$M revenue a year ago¹.

The movements in Total Portfolio Emissions during the year were driven mainly by lower emissions from Sembcorp Industries (SCI) following its divestment of the Chongqing Songzao coal‑fired power plant in December 2024. Emissions also decreased due to a lower proportionate share of Singapore Airlines’ (SIA) emissions, reflecting a dilution of our ownership interest, even as SIA’s underlying emissions increased on the back of resilient air travel demand. These reductions were counterbalanced by increases arising from changes in portfolio composition, as well as refinements and expansions to the emissions reporting boundaries of several portfolio companies.

Towards Net Zero

(for year ending 31 March)

Companies in high-emitting sectors, including power generation (such as SCI) and aviation (such as SIA), continue to face systems‑level constraints that impede progress in emissions reduction. These include regional operating considerations, such as rising energy demand and the time required to diversify baseload energy sources, alongside infrastructure gaps, technology readiness, and broader policy and market factors. To better reflect the near-term systems‑level constraints, we updated our pathway towards net zero during the year, taking into account the extended decarbonisation timeline required by SCI and SIA.

To date, we have not used carbon credits to offset Total Portfolio Emissions.

Total Portfolio Emissions by Portfolio Segments

(for year ended 31 March 2026)

Our portfolio comprises three segments: Singapore-based Temasek Portfolio Companies (TPCs), Global Direct Investments (GDIs), and Partnerships, Funds, and Asset Management Companies (PFAs).

Our TPCs are stalwarts of our portfolio that deliver stable and good sustainable returns over the long term. As at 31 March 2026, they accounted for 43% of our portfolio value and, in aggregate, contributed 89% of Total Portfolio Emissions, with SCI and SIA accounting for the majority of these emissions.

Our GDIs primarily consist of public and private equity investments in emerging and established market leaders. As at 31 March 2026, they made up 38% of our portfolio value and contributed 11% of Total Portfolio Emissions.

Our PFAs comprise partnerships with other investors, investments in private equity funds, private credit, and impact investments, as well as our asset management companies. As at 31 March 2026, they represented 19% of our portfolio value and contributed to less than 1% of Total Portfolio Emissions. This reflects current data limitations and reporting complexities associated with measuring emissions from private equity funds and private credit, which are therefore excluded.

GHG emissions reporting is an evolving area, shaped by ongoing developments in market practices, methodologies, and data availability. As industry approaches continue to mature, the quality, consistency, and comparability of reported emissions data are expected to improve over time.

Our Total Portfolio Emissions currently comprise Scope 1 and Scope 2 emissions from our public and private equity investments. In parallel, we have begun tracking material Scope 3 emissions for our in‑scope investments. Given the breadth of value chains involved and the diversity of reporting practices across companies and industries, comprehensive measurement across all 15 Scope 3 categories remains an ongoing effort. At this stage, we have not publicly disclosed Scope 3 emissions for these investments, as available data is largely based on proxy estimates and may not yet provide sufficiently robust or decision‑useful insights into underlying emissions performance.

To support continued improvements in data quality and coverage, we engage our portfolio companies to encourage more comprehensive, consistent, and reliable disclosure of material Scope 3 emissions over time.

Emissions reporting for our investments in private equity funds involves additional complexities, including challenges in attributing emissions to underlying companies, differences in reporting standards across funds, potential double‑counting arising from complex ownership structures and value chains, time lags in data availability, and variability in the quality and completeness of disclosures across underlying assets.

Notwithstanding these considerations, we remain committed to strengthening the transparency and robustness of our emissions disclosures. We will continue to review and refine our methodologies and approaches as market practices evolve, aligning our reporting with relevant international standards and frameworks.