Temasek invests in firms with clear green plans for long-term profits

Strategy vital for it to realise sustainability goals and help future generations prosper

- Sue-Ann Tan

Singapore investment company Temasek is steering its strategy towards companies with clear decarbonisation plans and sustainable business models, with a goal to secure long-term profits.

Temasek's managing director for sustainability Park Kyung-ah said in an exclusive interview with The Straits Times: “The success of our portfolio companies is effectively our success... them being resilient and them creating sustainable value ultimately comes back to our returns.

“Our remit is so every generation prospers, so when we do well, that helps Singapore's future generations as well.”

While Temasek does not directly interfere with company decisions on a daily basis, it exercises voting rights as a shareholder, and uses those rights to nudge companies in more sustainable directions.

It also engages company boards and sets expectations for companies it has invested in, said Ms Park.

That strategy is vital for Temasek to realise its sustainability goals, as five major companies currently contribute around 80 per cent of the total emissions from its portfolio.

They are Singapore Airlines, energy group Sembcorp Industries, commodities manager Olam Group, port operator PSA International, and ST Telemedia.

Ms Park brought up the example of Sembcorp, which demerged from its rig-building unit Sembcorp Marine in 2020.

The rig builder then merged with its rival Keppel Offshore and Marine, eventually forming offshore and marine engineering company Seatrium.