Temasek is ramping up deployments towards climate action and sustainable development, even as it acknowledges that it will take more time for its broader portfolio to reduce emissions to achieve its climate targets.
The Singapore state investor expects its emissions profile to be uneven in the near term, as it continues to make long-term strategic investments in high-emitting sectors including energy and AI-ready digital infrastructure.
Over the past year, Temasek has deployed S$5 billion into investments aligned with its ‘Sustainable Living’ trend. That is S$1 billion more than what was deployed in the prior year, in both direct and fund investments.
It brings the investor’s portfolio dedicated to the sustainable theme to S$49 billion for the year ended March 31, 2026, up S$3 billion from the year before, Temasek said. That comprises both listed and unlisted investments, and accounts for about 9% of Temasek’s net portfolio value.
Temasek’s portfolio dedicated to the sustainable theme stood at S$49 billion in FY26.
The bulk of the deployments, or S$42 billion, are in businesses and funds that contribute to its net zero, nature-positive, and inclusive growth goals. Another S$7 billion is in companies in hard-to-abate sectors that are actively decarbonising, amid longer-term efforts to support its portfolio companies’ energy transition efforts.
“Our path to net zero is not about divesting our way out of emissions. It’s about working with our largest emitters to find pathways to transition their business models and develop new green revenue streams,” Jasmine Teo, Director of Sustainability Strategy at Temasek International, said in a review of the portfolio’s sustainability efforts.
Temasek’s investments in Sustainable Living trend
Highlighted fund allocations during the year include to Zurich-based Emerald Technology Ventures’ Global Water Fund II, which is targeting to raise as much as 180 million euros to invest in early- to growth-stage companies developing water infrastructure and treatment technologies; and Singapore-based private equity firm ABC Impact, a unit of Temasek Trust Asset Management, which provides growth capital for businesses driving sustainable development goals in Asia.
Its direct investments over the past year are concentrated in systems-level platforms.
In utility-scale renewable energy, it has backed US-based Commonwealth Fusion Systems, which is set to build the world’s first commercial nuclear fusion power plant; and CleanMax, an India-based renewable energy company focused on commercial and industrial customers.
In distributed energy and storage, Temasek has invested in PCG Power, a China-based company focused on investment management and operations for distributed clean energy systems; and Luminance, a US company with a distributed generation platform with solar and storage assets that also provides decarbonisation-as-a-service solutions;
In terms of grid efficiency, it has backed Amperesand, a US- and Singapore-based company that develops solid-state transformer systems and supports the needs of hyperscalers and megawatt EV charging; and NARI Technology, a China-based provider of smart grid and power automation technologies.
Temasek has also backed Samsara Eco, an Australian biotech company which uses AI-engineered enzymes to recycle plastics and textiles.
Apart from direct deployments, it is building a growing ecosystem of strategic partnerships to mobilise capital for climate action and inclusive growth across investment stages.
Temasek has backed global asset manager Brookfield in its Brookfield Global Transition Fund I and II, the latter being the world’s largest private fund dedicated to clean energy transition, and the Brookfield Catalytic Transition Fund, focused on emerging markets.
It is also collaborating with BlackRock for Decarbonization Partners, which has a global portfolio of 15 companies, including Singapore-headquartered EPG, a provider of modular and prefabricated data centre infrastructure; and osapiens, a German company providing enterprise supply chain software for compliance and sustainability management.
Temasek is also a key backer of LeapFrog Investments’ climate strategy, which has most recently invested in ReNew Green, which is expanding clean power capacity in India.
Further, Temasek is facilitating climate action through its financing platforms, including Clifford Capital, GenZero, and the Green Investments Partnership.
Overall, Temasek’s portfolio for the year expanded to S$518 billion, up about 10% from a year ago. Among the significant investments made during the year were in OpenAI and Anthropic.
Separately, Temasek is also one of the anchor investors of the Artificial Intelligence Partnership, which was part of a consortium that acquired one of the world’s largest data centre operators, Aligned Data Centres in Texas, in a deal worth some $40 billion.
“Our pathway [towards net zero] is not going to be linear,” said Franziska Zimmermann, Managing Director, Sustainability at Temasek. “Our portfolio composition will change, and we will be making investments in sectors that may have high emissions, but are critical to the energy transition.”
However, the firm also highlighted that significant progress has been made in reducing its overall portfolio emissions, which are down by 30% since climate targets were first set, even as the overall portfolio and portfolio value have grown by over 50% over the same period.
Temasek noted that its reported total portfolio emissions encompass data only from its direct investments in public and private equities, which account for 79% of its portfolio. The majority of emissions come from its Singapore-based portfolio companies, primarily national carrier Singapore Airlines, and state-owned energy and urban development group Sembcorp Industries.
Said Teo: “Our long-term ambition is to achieve net zero emissions by 2050. That remains unchanged.”
