In the hopes of cutting the net carbon emissions of its portfolio, Temasek, Singapore’s state investment company, will lift its internal carbon price from US$42 to US$50 per tonne of carbon dioxide this year, with plans to further raise it to US$100 by the end of the decade.
Russell Tham, Temasek’s joint head of enterprise development group and head of strategic development, stated that the group has established environmental, social, and governance (ESG) frameworks as part of its investment strategy and will have sustainably-linked incentives for its internal carbon price in the near future.
Carbon pricing is an approach by which a company evaluates the potential cost of greenhouse gas emissions from its investments. The scheme helps firms manage climate-related business risks and prepares the country for its low-carbon transition.
Temasek plans to cut its portfolio’s net carbon emissions in half by 2030, or around 11 million tonnes of carbon dioxide equivalent. In addition, it also intends to achieve net-zero carbon emissions by 2050.
Temasek stated that its expected overall portfolio emissions decreased moderately for the fiscal year ending March 31, while the carbon intensity of its equities portfolio decreased from 103 tonnes of carbon dioxide equivalent per US$1 million portfolio value to 81 tonnes.
Such decrease is mainly ascribed to Covid-19 that impacted the emissions of several of its portfolio firms, as well as the time lag in reported emissions data.
To speed up its decarbonization project, the group formed GenZero in June as an investment platform company dedicated to catalyzing solutions in three priority areas, including technology-based solutions, nature-based solutions, and carbon ecosystem enablers.
Besides, the state investment fund has also invested in materials science firm Ambercycle and hydrogen-related firm Sydrogen Energy to advance sustainability.
