Early last month, Temasek Holdings reported that its total portfolio emissions for FY2025 ended March 31 stayed flat y-o-y at 21 million tonnes of carbon dioxide equivalent (tCO2e), as strong travel and cargo demand at Singapore Airlines (SIA) offset a fall in emissions from Sembcorp and other portfolio companies.
This figure reflects Scope 1 and 2 absolute emissions associated with its investment portfolio, excluding private equity, credit funds and other assets, according to Temasek’s FY2025 sustainability report, released alongside its annual report on July 9.
Temasek’s investments in partnerships, funds and asset management (PFA) companies made up 23% of its record $434 billion net portfolio value in FY2025.
The PFA segment is smaller than two other segments in Temasek’s portfolio: global direct investments (36%) and Singapore-based Temasek portfolio companies (41%); it provides exposure to private credit and hybrid solutions, private equity funds, as well as liquid alternatives and uncorrelated strategies that include hedge funds, closed block insurance and royalties.
Temasek’s team is working to better understand the non-financial data surrounding this private segment, including emissions. “We do engage with our key general partners that fund investments, through an annual process,” says Park Kyung-Ah, chief sustainability officer at Temasek International. “When we do new investments as a limited partner, we apply a similar ESG due diligence as we do [for] individual direct investments.”
The data-gathering process takes time, says Park to The Edge Singapore, but gathering information is “not the key goal”. “It’s really about what information we need to make sure that we drive the right outcomes.”
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Over time, the overall goal is to use that data to improve portfolio performance and reduce emissions, says Park.
For now, Temasek’s portfolio emissions exclude Scope 3 data, which refers to value chain emissions, such as a company’s purchased goods and services and business travel. “We will still ask them questions about Scope 3, but we are not systematically gathering [this data] across all of our direct investments because Scope 3 has 15 different [categories] in there, and we find that the datasets are not as credible in some cases, and many companies are still early in their journey.”
This presents a double-edged scenario for Temasek; as the global investor encourages more precise data-gathering among its investee firms, the data uncovered could raise its portfolio emissions.
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Still, Park says Temasek does not want to “discourage the right behaviour”. “There are several companies that have increased their reporting boundaries as they continue their journey and increase the accuracy of what they’re doing… It’s a pretty meaningful part, and we want to encourage companies to actually do that even if it increases our emissions.”
Emissions data is just one part of a big picture. “It’s very difficult to say: ‘This is the metric, and this is what we’re going to hold you only solely accountable for.’ You’ve got to look at the entire context of what they’re doing,” says Park.
Park adds: “For our portfolio companies, we want the emissions reduction and commitment to go hand-in-hand with how they are growing their business and making sure that they are minimising the risks.”
SIA’s emissions at record high
The bulk (82%) of Temasek’s total portfolio emissions comes from five firms: SIA, Sembcorp, Olam Group, PSA International and ST Telemedia.
Aviation decarbonisation remains challenging and SIA contributed 43% of Temasek’s total portfolio emissions in FY2025.
SIA’s combined Scope 1 and 2 emissions grew 14% y-o-y to a record high of some 17.1 million tCO2e for the financial year ended March 31, according to its latest sustainability report.
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For context, SIA’s Scope 1 and 2 emissions previously peaked at 16.5 million tCO2e in FY2019 and fell to a low of just under 4 million tCO2e in FY2021 owing to Covid-19 lockdowns.
SIA’s publicly available Scope 1 and 2 emissions data only goes back as far as FY2016, when it was just under 14 million tCO2e.
SIA’s Scope 1 refers to direct emissions occurring from sources that are owned or controlled by the group, while Scope 2 refers to indirect emissions from the generation of purchased electricity consumed by its properties and offices.
In FY2024, Temasek posted a 6 million tCO2e fall in total portfolio emissions, which marked the first time this figure had sunk below the 22 million tCO2e logged in FY2011, Temasek’s chosen baseline year.
Temasek aims to halve emissions to 11 million tCO2e by FY2031 and reach net zero by FY2051.
During the financial year, Temasek engaged 17 “major portfolio companies”, constituting 91% of total portfolio emissions. According to Temasek, 14 of these 17 firms have targets to achieve net zero by 2050 or earlier.
In addition to the five major contributors to total portfolio emissions listed above, Temasek also engages “a larger universe of Singapore portfolio companies” like Seatrium, Keppel and “real estate companies”, says Park.
Temasek’s “very broad portfolio” includes “very large public companies” like Microsoft, Visa and Mastercard, Park adds. “They have very clear [decarbonisation] targets. In the case of Microsoft, it’s even going back to its history and trying to actually decarbonise all of that.”
Hence, Temasek has to manage its resources and “right-size” its engagement, adds Park, responding to a question about the remaining 9% of total portfolio emissions that were not engaged in FY2025. “Where can we really have the biggest influence and the material outcomes, and also think about the resiliency of our portfolio, where value creation opportunities are? Because we can’t engage with hundreds of companies in our portfolio.”
AI’s power use
On July 27, Bloomberg reported that US investment firm KKR & Co is in talks to buy ST Telemedia Global Data Centres (STT GDC) in a deal that values it at more than US$5 billion, potentially making the transaction among the largest for KKR this year.
Temasek’s fully-owned portfolio company, ST Telemedia, is the parent of STT GDC. KKR already owns a 14.1% stake in STT GDC.
According to Temasek, STT GDC has made “notable progress” on its carbon targets, despite being one of the world’s fastest-growing data centre providers.
For instance, STT GDC achieved its 2026 carbon intensity and renewable energy factor interim targets three years ahead of schedule by enhancing the energy efficiency of its portfolio and making operational improvements to its buildings, as well as leveraging renewable energy through onsite renewable installations.
STT GDC has committed to achieving carbon neutrality by 2030. Still, Temasek notes the high energy demands of artificial intelligence (AI), which also require new scalable cooling technologies. “[STT] GDC has set a number of targets, including 85% renewable energy by 2028 and they’re well on their pathway towards achieving it,” says Park.
STT GDC has reached 78.5% renewable energy usage, according to the company’s latest sustainability report.
Other portfolio companies are also “leaning into data centres”, Park adds. “Keppel is another good example of [companies] doing green data centres and experimenting with even offshore data centres that enable [the] use of sea water cooling as well.”
Nature reporting
This is only the second year that Temasek has issued a separate sustainability report. Temasek noted in its inaugural sustainability report for FY2024 that it had participated in a Taskforce on Nature-related Financial Disclosures (TNFD) Asset Owner pilot.
In response to The Edge Singapore last year, Franziska Zimmermann, Temasek International’s managing director, sustainability, said there was a lack of “good and reliable data” from underlying companies.
A year later, Park says Temasek has created a “nature roadmap” identifying portfolio companies with impacts and dependencies on nature.
Temasek has also started incorporating a biodiversity assessment tool into the due diligence process, which offers another dimension of assessing the impact of certain projects.
“Even though renewable energy is clean, it has a physical footprint,” says Park. “So, if you’re going to make renewable energy investments and developments, make sure you’re thinking about the unintended consequences of doing land-based development on biodiversity.”
That said, Park inserts a caveat that these assessments are still in the early stages. “Measuring for what is nature-positive is a lot harder than greenhouse gas emissions, which is relatively standardised globally.”
