Catalysing Climate Action

The need for decisive action was reinforced by the Intergovernmental Panel on Climate Change Sixth Assessment Report, which made it clear that without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C is beyond reach. Even as geopolitical events trigger price shocks in commodities, we must remain steadfast in our resolve to advance the decarbonisation of the global economy.

The science, alongside relevant policy and technology roadmaps, informs our climate strategy. We measure and manage our portfolio carbon emissions, integrate climate risks and opportunities into the way we originate and evaluate investments, and work to pilot, invest in and scale decarbonisation platforms and solutions.

Three years ago, we shared our target to reduce the net carbon emissions attributable to our portfolio to half the 2010 levels by 2030 and have the ambition to achieve net zero by 2050. We have identified three pathways towards our climate targets:

To account for progress made on our targets, we have been measuring and disclosing the carbon emissions attributable to our investment portfolio as part of our annual reporting. Our portfolio emissions currently encompass Temasek’s direct investments in listed and unlisted equities, which represent 76% of our portfolio as at 31 March 2022.

The portfolio emissions reported include Scope 1 direct emissions and Scope 2 indirect emissions of the underlying companies based on the latest available data sets. We use a combination of company-reported emissions data and modelling approaches to establish our portfolio emissions based on our proportionate shares (i.e. ownership interests) in the assets. We have also engaged consultants and auditors to support our approach and to provide limited assurance.

We adopt the following hierarchy in data sources as we establish our portfolio emissions. The hierarchy takes into account availability and timeliness of reported data, using company-reported data where available:

1. Company-reported data: GHG emissions data that is reported by the company, either directly to Temasek or made available through S&P Global Sustainable1.
2. Company-specific estimates: GHG emissions for each company modelled or estimated by Temasek or S&P Global Sustainable1 using relevant industry level carbon intensity or carbon efficiency averages as proxies (GHG emissions normalised by revenue/market capitalisation/other relevant operational unit of measurement). In case industry averages do not provide a meaningful proxy for the company, carbon intensity or efficiency data of the company or its comparable peers may be used instead.