It is such an important tenet that sustainable living is among the four structural trends Temasek is using to guide its portfolio construction. The others are digitisation, longer lifespans and the future of consumption. A third of the portfolio is based on exposure to these trends, up from 13 per cent in 2016.
These trends are shaping the overall portfolio. The aim is, by 2030, for the portfolio to have a 60 per cent to 70 per cent resilient component, held for the long term to provide stable and sustainable returns, and a 30 per cent to 40 per cent dynamic component, where investments are held for a shorter duration.
To achieve such stable and sustainable returns, addressing the sustainability issue is key.
"Being a long-term investor, if we don't account for sustainability or climate change, the value of our assets may be lower going forward," said Mr Chia. "So it makes business sense to pay attention to sustainability." Temasek will evaluate, before investing, if the asset has the potential to retain its value in the face of climate and other challenges.
Given these considerations, investing in a company that is a large carbon emitter but offering substantial returns is not a definite "no", but not a definite "yes" either. If Temasek is able to help the company on its carbon-neutral journey, the investment case would be stronger.
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Denne historien er fra February 05, 2024-utgaven av The Straits Times.
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