Dear Stakeholders,
Over the year, the global operating environment has become even more volatile — shaped by geopolitics, energy security, and technology disruption — while the multilateral systems that underpin global stability are under strain. Yet the signals from the physical world are becoming clearer. Climate change and biodiversity loss are already impacting economies, communities, and businesses. Social pressures are also rising with a widening K-shaped economy affecting cohesion, workforce resilience, and affordability.
Against this backdrop, decarbonisation — and ensuring an inclusive transition — has become harder. This is particularly true for capital-intensive, early-stage technologies for hard-to-abate sectors, and capital for underserved markets. With fragmenting global supply chains and competing capital priorities such as Artificial Intelligence and defence, the transition is becoming more uneven, contested, and disorderly.
At the same time, this moment presents a critical opportunity to accelerate the scale-up of renewables and storage — solutions that are not only cleaner, but increasingly economic and resilient. It also calls for deeper regional and bilateral collaboration to unlock complementary strengths and strengthen shared resilience, including through more integrated grids and supply chains.
As a long-term asset owner, we must stay front-footed in separating signal from noise — identifying the durable structural trends we need to lean into, while managing the systemic risks to long-term resilience and returns. This requires not only clarity of conviction but also pragmatic ambition, leaning in where we can influence outcomes.
To that end, we are sharpening our approach across our three portfolio segments to strengthen accountability and better align our efforts. For Singapore-based Temasek Portfolio Companies, we continue to work with them on their climate transition journeys, adaptation, and workforce readiness to enhance their long-term competitiveness. For Global Direct Investments, we deploy capital to Sustainable Living trend-aligned investments while focusing on material environmental, social, and governance (ESG) risks and opportunities across our investment process. For Partnerships, Funds, and Asset Management Companies, we are engaging our core group of general partners on ESG risk management and value creation, while partnering them on systems-level solutions.
As we do so, we are advancing pragmatic ambition across three interrelated areas. First, we are taking a systems approach to the energy transition — investing in sustainable infrastructure to accelerate renewables and storage, diversify baseload solutions such as nuclear, and optimise grids. The transition from brown to green, alongside a disciplined framework for the responsible use of gas to avoid lock-ins and methane leakage, is also critical.
Second, we are stepping up efforts in adaptation and resilience by exploring investments in nature-based solutions and water resilience, and by working to strengthen adaptation practices across our portfolio.
Third, helping to address inclusive growth through impact investing in emerging markets, increasing the bankability of sustainable projects and the energy transition in Asia, and strengthening workforce resilience.
The road ahead will be more complex, and progress may be uneven. But that only reinforces our resolve to take disciplined, long-term action. Our focus remains on building a more resilient sustainable portfolio.
