Dear Stakeholders,
The world around us is being reshaped by a new set of intersecting forces — geopolitical fragmentation, shifting policy environments, and tighter capital conditions. At the same time, Artificial Intelligence (AI) and energy security are emerging as two of the most significant and converging forces of disruption. Both have profound implications for business, environmental, and social outcomes. Yet they also represent structural tailwinds. In this regard, AI will accelerate the commercialisation of nascent climate technologies, opening up new pathways for innovation, productivity, resilience, and long-term value creation.
In this more complex and unpredictable environment, we must remain responsive to near-term realities while continuing to invest with conviction for the long term.
External headwinds have made decarbonisation pathways slower and more disorderly, while energy security and affordability have risen to the forefront. But the longer-term pathway is clear: we need to transition to a cleaner, more resilient energy future, with renewables — and increasingly, storage — emerging as cost-effective and geopolitically resilient solutions.
This is why we believe it is important to stay committed to net zero portfolio emissions by 2050 even though we are unlikely to meet our interim climate target of halving net portfolio emissions from 2010 levels by 2030, given our portfolio concentration in hard-to-abate sectors and the need for a just transition.
Under volatile operating conditions, progressing towards net zero requires a deliberate approach to capital allocation, portfolio resilience, and institutional enablement.
We will continue to invest in the energy transition and support the development of solutions for hard-to-abate sectors, where sustained effort, innovation, and patient capital are needed to drive progress.
We will pursue the energy transition in a balanced and pragmatic way. This recognises that parts of today’s energy mix will remain necessary over the longer term to support energy security and a just transition, alongside a credible commitment to lowering emissions. Accordingly, this is not a zero-tolerance approach to fossil fuels. Rather, it reflects a disciplined assessment of opportunities where the forward trajectory points towards a greener generation mix over time — recognising that this transition cannot and will not be linear.
We will also continue to support emerging solutions in harder-to-abate sectors, where progress will take time but is essential to long-term resilience. More broadly, across our portfolio, we remain focused on lower-carbon business models and on businesses where we can help influence the trajectory towards lower emissions.
Workforce transformation will be equally important to long-term resilience. As industries evolve under the combined forces of decarbonisation and AI disruption, businesses must equip their people with the skills, adaptability, and support needed to navigate change. A just and orderly transition depends not only on capital and technology, but also on workforce resilience, so that employees and communities can participate in and benefit from the opportunities created. Thus, workforce transformation is integral to strengthening competitiveness, supporting inclusive growth, and positioning businesses for the future.
In this era of transactionalism, Temasek believes that the path forward lies in building and strengthening networks and partnerships. We hold steadfast to our belief that by staying united and harnessing our collective strengths, Temasek will continue to thrive. So every generation prospers.
