Temasek’s lower-than-expected emissions figure was in part due to portfolio company Sembcorp Industries’ (SCI) divestment of the Chongqing Songzao coal-fired power plant and Temasek’s diluted ownership of carrier Singapore Airlines (SIA). As at March 31, Temasek owns 50% of SCI and SIA; Temasek owned 53% of the latter as at March 31, 2025.
Owing to resilient demand for air travel, SIA’s Scope 1 and 2 emissions rose 3.8% y-o-y to a record figure of just under 17.8 million tCO2e in FY2026. SIA and Temasek share the same March 31 financial year-end.
Meanwhile, SCI reported some 7.7 million tCO2e in combined Scope 1 and 2 emissions for FY2025 ended Dec 31, 2025, down some 17% y-o-y.
The bulk of these companies’ emissions are considered Scope 1, or greenhouse gas (GHG) emissions produced from their immediate operations. Scope 2 emissions, meanwhile, encompass GHG emissions arising from energy used in said operations.
Combined, emissions from SCI and SIA account for the “majority”, or 62%, of Temasek’s total portfolio emissions in FY2026. This figure reflects Scope 1 and 2 absolute emissions associated with Temasek’s investment portfolio, and excludes private equity, credit funds and other assets.
See also: Singapore targets stronger business competitiveness and value unlocking with listcos
Temasek says lower emissions recorded from its stakes in SCI and SIA were offset by “increases from changes in portfolio composition” and “expansions in emissions reporting boundaries of several portfolio companies”.
As climate reporting matures among corporates, firms are attempting “fuller disclosure” by taking into account emissions from “additional locations or assets”, explains Franziska Zimmermann, managing director, sustainability at Temasek International.
This could mean higher emissions figures going forward. However, Temasek does not want to discourage companies from fine-tuning their numbers and gathering more granular data about their emissions, says Park Kyung-Ah, chief sustainability officer at Temasek International. “Ultimately, they should be including those, and then thinking about where they can decarbonise and be more decision-useful, and that enables us to be decision-useful as an investor.”
SIA, SCI heaviest emitters
Temasek previously indicated that five firms — SIA, SCI, Olam Group, PSA International and ST Telemedia (STT) — contributed to the “bulk”, or 82%, of its total portfolio emissions for FY2025. Notably, Temasek has largely omitted Olam, PSA and STT from its FY2026 sustainability report.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
SIA and SCI are “by far, the biggest chunks” among contributors to Temasek’s total portfolio emissions, says Zimmermann. “There’s such a big distance to the rest of that bucket that it’s no longer that relevant to come up with a top five… They’re still in that grouping [because] emissions do not change overnight, so you can expect that those will still be among the higher-emitting companies.”
Temasek engaged 19 “major portfolio companies” on their climate targets during FY2026, up from 17 of such firms in the prior year. These 19 firms — mostly Singapore-headquartered companies — constituted 88% of Temasek’s total portfolio emissions for the financial year.
Of this group, 15 have set targets to achieve net zero by 2050 or earlier. Responding to The Edge Singapore, Temasek declined to identify the four portfolio companies that have yet to set climate targets.
“Some of them feel [that] unless they’ve got very concrete plans, they are uncomfortable at this point to make those commitments. But certainly, they are working towards decarbonisation, and sustainability is part of the agenda for them as well,” says Temasek Singapore president and Temasek International chief financial officer Png Chin Yee. “We’ll continue to work with them to make sure that they are continuing on this path.”
Bumpier road to net zero
Temasek CEO Dilhan Pillay revealed in May that while the investor is unlikely to meet its 2030 interim targets, its 2050 net-zero goals remain in place.
Temasek’s total portfolio emissions have fallen by 9 million tCO2e, or 30%, since 2019, when it first set climate targets. In order to reach its 2030 target of halving emissions from 2010 levels, Temasek will have to bring its total portfolio emissions down below 11 million tCO2e at the end of FY2031.
While Temasek’s total portfolio emissions have held steady for three financial years, the figure could rise for the current reporting period. “We expect a near-term increase in [FY]2027 as Sembcorp’s acquisition of Alinta will be reflected in our portfolio emissions,” says Jasmine Ann Teo, director, sustainability strategy at Temasek International.
SCI completed its acquisition of a 100% stake in Australian energy player Alinta Energy in June from Chow Tai Fook Enterprises, bringing into its fold Alinta’s 3.4-gigawatt (GW) operating portfolio and 10.4GW development pipeline.
Thus, Temasek expects a “non-linear decline in emissions over time”. “Real-world transition can sometimes increase absolute emissions in the short term,” adds Teo. “Enabling meaningful decarbonisation over the medium term means working through that complexity, supporting our companies as they grow, acquire, transform and build new capabilities for a lower-carbon future.”
Internal carbon price unchanged
Citing the weakening global climate momentum, Finance Minister Lawrence Wong said during his Budget 2026 speech in February that Singapore’s carbon tax could be positioned towards the lower end of its projected $50 to $80/tCO2e range by 2030.
Introduced in 2019, Singapore has just raised the escalating carbon tax to $45/tCO2e for 2026 and 2027.
Would Temasek mirror the slowdown? The investment firm introduced its own internal carbon price of US$42/tCO2e in 2021 before raising it to US$50/tCO2e in 2022. Temasek expects to increase this internal carbon price to US$100/tCO2e by 2030.
The move embeds the cost of carbon in Temasek’s investment and operating decisions, reflecting these externalities in monetary terms.
Temasek last raised its internal carbon price to US$65/tCO2e from April 2024. The investment firm reviews its internal carbon price every two years, says Png in response to The Edge Singapore, and the US$65/tCO2e figure remains unchanged following a review earlier this year. “We’ve said that we’re going to look at US$100[/tCO2e] by 2030, so that’s the directional path that we’re taking.”
Sustainable living investments up $3 bil
Temasek first released a standalone sustainability report in FY2024, indicating also the portfolio value of its investments aligned with “sustainable living”.
As at March 31 this year, this segment of Temasek’s total portfolio grew $3 billion y-o-y to $49 billion in value, or 9% of net portfolio value.
This comprises $42 billion in sustainability-focused investments — or businesses with products and services that contribute positively towards Temasek’s long-term vision of “net-zero, nature-positive and inclusive growth” — and $7 billion in climate transition solutions, or companies in high-emitting sectors that are “actively transitioning” their business towards climate-aligned products and services.
During the financial year, Temasek deployed $5 billion towards sustainable living investments. These include ABC Impact, an Asia-focused private equity firm dedicated to generating positive, measurable social or environmental impact alongside compelling risk-adjusted returns; Commonwealth Fusion Systems, a US-based firm with plans to build the world’s first commercial nuclear fusion power plant, targeting net electricity generation in the early 2030s; and PCG Power, a China-based investment manager and clean energy systems operator.
Other carbon calculations
With effect from April 1, Temasek manages its investments through three entities, each overseeing a portfolio segment. Singapore-based Temasek Portfolio Companies (TPCs) are the largest of three segments, representing some 43% of the investment firm’s overall portfolio as at March 31.
Temasek’s investments in “emerging and established market leaders” are now categorised under Global Direct Investments (GDIs), which make up 38% of Temasek’s portfolio; while its Partnerships, Funds and Asset Management Companies (PFAs) make up the remaining 19%.
As at March 31, TPCs contributed 89% of Temasek’s total portfolio emissions, while GDIs contributed 11% and PFAs contributed “less than 1%”. That said, Temasek acknowledges that this reflects current data limitations and reporting complexities associated with measuring emissions from private equity funds and private credit.
Over the financial year, Temasek’s portfolio carbon intensity fell to 50tCO2e from 57tCO2e per million in portfolio value. This means for every dollar of portfolio value Temasek logged in FY2026, fewer units of carbon emissions were produced y-o-y.
Meanwhile, Temasek’s weighted average carbon intensity (WACI) declined over the financial year to 83tCO2e from 89tCO2e per million in revenue. WACI shows how much carbon each company emits for every dollar of revenue it generates.
Photos and charts: Temasek
Table: SIA
See also:
