Temasek Holdings is set to see an increase in its carbon emissions in the near future, as the firm faces complexities in cutting emissions from tough sectors like aviation and power generation. Although it has lowered emissions by 30% since 2019, meeting its interim 2030 climate target has become more challenging amid a shifting global landscape.
- Temasek's near-term emissions expected to rise due to aviation and energy sector exposure.
- The firm has cut emissions by 30% since 2019 but 2030 interim target is increasingly difficult.
- Long-term 2050 net-zero ambition remains firm with a focus on real-world impact investments.
What happened
Temasek Holdings, Singapore’s state investment company, has revealed in its 2026 sustainability report that its portfolio carbon emissions, steady at 21 million tonnes of CO2 equivalent over the past three years, are expected to increase in the near term. This shift challenges the company’s interim target to reduce emissions to 11 million tonnes by 2030. Despite having cut emissions by 30% since 2019, the complex realities of sectors like aviation and power generation have slowed progress toward this goal.
The company attributes these challenges to several major global changes since it set its climate targets in 2019. Geopolitical fragmentation, evolving policies, tighter capital markets, and AI-driven technological shifts have made decarbonisation more complicated. Temasek’s leadership acknowledges these factors as impacting their ability to hit medium-term climate ambitions while continuing to pursue their long-term sustainability objectives.
Why it feels good
Despite the near-term setbacks, Temasek’s commitment to a net-zero portfolio by 2050 remains unwavering, reflecting both ambition and realism. The firm’s approach balances long-term climate ambition with practical economic and technological constraints, demonstrating a thoughtful, adaptive mindset in the face of changing global circumstances.
Temasek is prioritizing effective portfolio engagement and investment in innovations that deliver tangible environmental benefits rather than relying on divestment alone. This strategy underscores a proactive stance on sustainability, emphasizing real-world impact and collaboration with portfolio companies, which offers a hopeful path forward amidst global decarbonisation challenges.
What to enjoy or watch next
Moving forward, Temasek plans to sharpen its climate approach across its diverse portfolio categories, focusing on Singapore-based firms, global investments, and partnerships with asset managers. The company intends to ramp up investments in renewable energy and storage, accelerate the energy transition, and strengthen resilience to climate risks as part of these efforts.
Observers and stakeholders can watch how Temasek adjusts its climate roadmap and risk assessments, including adopting a new climate scenario reflecting a 'fragmented world' with a higher temperature rise pathway. The firm’s evolving strategy and continued climate engagement represent key developments to follow as it seeks to maintain momentum toward meaningful sustainability outcomes.