SINGAPORE: A Pledge for Environmental Sustainability

In a significant move for environmental sustainability, Temasek Holdings announced on September 23 that it will allocate S$100 million (approximately US$77.5 million) in concessional capital aimed at facilitating climate action projects. This announcement was made by Chairman Lim Boon Heng during the firm's 50th anniversary celebration at the Shangri-La Hotel.

Mr. Lim explained that the main goal of this initiative is to 'crowd in capital' to support projects that can be considered marginally bankable. By leveraging its own resources, Temasek hopes to encourage other sources of funding, including public, private, and philanthropic capital, to join the fight against climate change. “We believe our philanthropic contributions can significantly amplify the amount of funding directed toward climate action,” he emphasized.

Inaugural Contribution and Goals

This is Temasek's inaugural contribution of concessional capital—capital that can bear greater risks or accept lower returns—to foster the green transition. The company's portfolio already includes a “sustainable living” segment with a remarkable value of S$44 billion; however, it acknowledged the pressing need for concessional capital to stimulate financing in emerging markets and developing economies, particularly in Southeast Asia, where the path to decarbonization poses unique challenges.

Temasek's concessional capital initiative intends to offer “more flexible, patient, and favorable financing” to tackle issues like emerging market risks and elevated financing costs. The success of this endeavor will be evaluated based on its capacity to produce positive climate outcomes, such as mitigating and adapting to climate change impacts, enhancing biodiversity, and promoting sustainable lifestyles.

Additional Initiatives and Celebrations

As Temasek prepares for its 50th anniversary next year, it has also introduced additional initiatives, including a S$150 million fund dedicated to skills training and talent development within Singapore.

In line with its anniversary celebrations, Temasek unveiled a commemorative book titled "By Generations, For Generations: Fifty Years of Temasek As Told By The People Who Shaped It." Authored by Ong Soh Chin, the book features insights from about 90 employees, alumni, and business partners, documenting pivotal moments in Temasek's history.

Reflections on Temasek's Journey

Reflecting on the journey of Temasek since its establishment in 1974, Mr. Lim recounted the numerous challenges faced by the organization but highlighted its resilience and determination to thrive. He noted that the firm has transformed from a modest government holding company to a global investment powerhouse with a portfolio value soaring to S$389 billion.

Mr. Lim delineated three core principles that have shaped Temasek’s evolution: resilience, purpose, and growth. Resilience showcases their ability to adapt to market fluctuations, while purpose underscores the firm’s commitment to societal benefits beyond mere financial metrics. Since 2003, Temasek has earmarked part of its net gains for community initiatives promoting connectivity, community upliftment, and environmental protection. Currently, their efforts have positively impacted about 3.7 million lives in Singapore and beyond.

Strategic Growth and Challenges

Notably, Temasek's strategic growth has led to remarkable diversification—expanding its investments from Southeast Asia to emerging economies in Asia, the US, and Europe, significantly enhancing its portfolio and employee base from five to over 1,000 across 13 offices worldwide.

However, growth comes with risks. Temasek faced backlash in November 2022 when it wrote off a US$275 million investment in the now-defunct cryptocurrency exchange FTX. Following this incident, the leadership took accountability, resulting in a reduction of their compensation.

A Bold Future Ahead

In conclusion, Mr. Lim emphasized Temasek's ongoing readiness to meet future challenges with boldness, stating, “Temasek is no ordinary company. Just like Singapore, our survival lies in being bold and extraordinary.” This commitment not only reinforces Temasek's role as a key player in the global investment landscape but also highlights its dedication to addressing climate change, making it a lead steward of sustainability in the region.