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Temasek Integrates ESG Framework Across Investment Processes to Enhance Long-term Resilience and Sustainability

Temasek Integrates ESG Framework Across Investment Processes to Enhance Long-term Resilience and Sustainability

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  • ESG Integration: Temasek incorporates ESG from pre-investment to post-investment, enhancing long-term portfolio resilience.
  • Risk Management: Evaluates sustainability-related risks and opportunities, targeting net portfolio carbon emissions.
  • Continuous Improvement: Uses frameworks and tools to promote ESG practices and avoid high-risk sectors.

Temasek integrates an Environmental, Social, and Governance (ESG) framework throughout its investment processes, from pre-investment due diligence to post-investment engagement. This approach enables better management of material risks and advances ESG practices to strengthen portfolio resilience and align with sustainability objectives.

At Temasek, we integrate ESG into the core of our investments, from pre-investment due diligence to post-investment engagement. As a long-term investor, this goes hand in hand with ensuring the long-term resiliency and future-proofing of our portfolio.” – Kyung-Ah Park, Head, ESG Investment Management, Managing Director, Sustainability, Temasek

Temasek believes that companies recognizing and managing ESG factors effectively are better positioned to navigate risks and generate sustainable value. The ESG framework evaluates sustainability-related risks and opportunities, incorporating climate change considerations and supporting the net portfolio carbon emissions target.

The framework emphasizes continuous improvement, helping identify material issues affecting company performance, the environment, and society. This approach aims to expand opportunities in businesses generating positive impacts, advance ESG practices, manage exposure to potentially harmful companies, and avoid restricted industries.

The governance model holds boards and management accountable without directing day-to-day operations. Shareholder rights are exercised, including voting at meetings, to protect interests.

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Various tools support decision-making, such as a restricted industries list that aligns with Singapore laws, international treaties, and UN sanctions. Internal guidelines safeguard investments in high-risk sectors.

Temasek leverages tools like the Climate Transition Readiness Framework and ESG Value Creation Playbook for post-investment engagement, encouraging companies to manage sustainability-related risks and improve operational practices. Opportunities are seized to build competitive advantages through sustainability-focused products or services.

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