Sustainability Strategy and Governance
Sustainability Strategy
We are in a critical decade. Climate change is arguably the biggest crisis of our lifetime. We are seeing more frequent weather events, backed by now non-incontrovertible data painting a dire picture of what the world would look like if we don’t address it. We must therefore work together to solve the climate challenge, reverse nature loss and build a more inclusive society.
As an active investor and shareholder
Temasek evaluates sustainability-related risks and identifies opportunities in investments through our Environment, Social and Governance (ESG) framework. We incorporate sustainability-related assessments when evaluating all investment opportunities.
As a shareholder, Temasek works to understand issues that may impact our portfolio companies and how they might navigate them. We also engage our major portfolio companies regularly on their carbon transition plans, as part of our efforts to achieve a decarbonised and carbon-efficient portfolio.
As a forward looking
institution
Temasek is committed to reducing carbon emissions and our overall environmental impact. Since 2020, we have delivered on our pledge to achieve carbon neutrality in our operations.
Temasek views its staff as its most important asset, and values diversity and the cross-fertilisation of experiences and ideas. We seek to create an inclusive and cohesive work environment that celebrates and values unique personalities, diverse perspectives, skill sets and experiences.
As a trusted
steward
Temasek fosters community partnerships and provides philanthropic gifts to Temasek Trust that seek to uplift lives and build resilience in communities. Temasek supports the sharing of insights and best practices on sustainable development, with the aim of building a sustainable ecosystem across our portfolio with partners from business, government and civil society.
The transition towards low-carbon economies and sustainable lifestyles is not only an imperative, but also presents us with new investment opportunities. We have increased our focus on businesses with innovative products, services and business models that drive decarbonisation, resource efficiencies, and material and process innovation. We have also forged partnerships with like-minded investors who are committed to achieving a net zero world to scale feasible and novel solutions in energy, mobility, built environment and manufacturing.
Over the year, we stepped up our investments into companies developing sustainable solutions. We invested in Ambercycle, a circular economy company which uses novel molecular separation technologies to recycle textiles into virgin-grade polyester. We also invested in several deep tech start-ups that aim to enable the transition to net zero such as Form Energy, an energy storage company that is developing a low cost and multi-day duration battery for grid applications; Fortera, which aims to enable the production of low carbon cement at scale; and H2Pro, a company that produces affordable green hydrogen fuel. We formed Sydrogen Energy, a joint venture with Nanofilm Technologies, which provides nanotechnology capabilities and solutions that enable mass adoption of hydrogen fuel systems. We also made a follow-on investment in Solugen, a specialty chemicals manufacturing platform that aims to decarbonise the chemicals industry. Post 31 March 2022, we invested in Perennial, an early stage start-up that uses remote sensing and Artificial Intelligence (AI) to accurately quantify soil carbon on farmland.
Sustainability Governance
Board Oversight
We operate in a complex global environment influenced by multiple geopolitical and socio-economic forces. Our Risk & Sustainability Committee (RSC) was established in January 2022 to enhance focus on opportunities and risks arising from sustainability trends, including climate change, and other financial, reputational, operational and cyber risks.
The RSC supports the Board in its oversight responsibilities by reviewing, among other things, our portfolio risk appetite and profile, material ESG matters, risk management and sustainability frameworks and policies, as well as key public statements relating to risk, sustainability and ESG. The RSC coordinates with other standing Committees of the Board, such as the Audit Committee (AC) and the Leadership Development & Compensation Committee (LDCC), in its oversight of risk and sustainability matters, where relevant.
Senior Management Oversight
The senior management sets the tone and culture of our institution, leading the delivery of Temasek’s vision and mission. They oversee our team and portfolio with the support of the Senior Management Committee (SMC), Senior Divestment and Investment Committee (SDIC) and Strategy, Portfolio and Risk Committee (SPRC).
- The SMC reviews and sets overall management and organisational policies. They also developed the Temasek Code of Ethics and Conduct (T-Code) and constituted the Ethics Committee to assist in its implementation. All employees are required to observe and comply with the T-Code.
- The SDIC takes into account climate-related risks and opportunities as they decide on investments and divestments and make other decisions to manage and shape our portfolio.
- The SPRC oversees our ESG policy and the integration of ESG considerations, including climate change, in the firm’s strategy, investment, risk and operational management processes.