Those targets were set during a time when “global momentum on climate action was building”, says Pillay. “Capital was relatively abundant. Interest rates were low. Global supply chains were largely stable.”
Today, geopolitical shocks and supply disruptions have placed energy security and affordability “once again front and centre”, adds Pillay. “Fiscal positions are tighter. Policy signals are less predictable. Generative AI has resulted in a significantly higher level of energy demand and has attracted massive amounts of capital that would otherwise be used for other purposes — including climate transition opportunities.”
While Temasek remains committed to its 2050 net-zero pathway, Pillay says the firm’s “pace must reflect today’s realities”.
Temasek’s total portfolio emissions have fallen by 30% since 2019, but the figure is still hovering around the 2010 baseline. The absolute amount of Scope 1 and 2 greenhouse gas emissions associated with Temasek’s investment portfolio has stayed flat at 21 million tonnes of carbon dioxide equivalent (tCO2e) since FY2024 — still far from the 11 million tCO2e Temasek had planned to reach by 2030 — and this figure is set to rise in the near term.
See also: Temasek’s portfolio emissions flat y-o-y again, even as SIA logs record
Temasek portfolio company Sembcorp Industries’ (SCI) acquisition of Australia’s fourth-largest power generator and retailer Alinta Energy earlier this year will push attributable emissions higher, owing to Alinta’s 3.4-gigawatt (GW) operating portfolio and 10.4GW development pipeline. This will be reflected in SCI’s FY2026 sustainability report for the year ending Dec 31, as well as Temasek’s FY2027 sustainability report for the year ending March 31, 2027.
Temasek expects a “non-linear decline in emissions over time”. This takes into account its 50% stakes in SCI and Singapore Airlines (SIA).
While both SCI and SIA have adopted 2050 net-zero targets, the two Straits Times Index constituents’ interim climate targets have a slightly farther deadline of 2035.
SCI aims to grow gross installed renewables capacity to 25GW by 2028 and bring emissions intensity down to 0.26 tCO2e per megawatt-hour of energy generated by 2035.
Meanwhile, SIA aims to have new-generation aircraft make up around 90% of the group’s fleet, and use sustainable aviation fuel for 5% of total fuel requirements for SIA and Scoot by 2030.
By 2035, SIA aims to achieve “industry carbon-neutral growth” by lowering emissions to 85% of a 2019 baseline, in line with the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
In FY2026, however, SIA’s Scope 1 and 2 emissions rose 3.8% y-o-y to a record 17.8 million tCO2e.
Singapore has committed to reducing its emissions to between 45 million and 50 million tCO2e by 2035. Between Singapore’s 2030 emissions target of 60 million tCO2e and net zero by 2050, the nation is on a linear trajectory for emissions to decline steadily over the years.
This is unlike a curved pathway, which anticipates that technology, policy and capital will converge at some point in the future to sharply accelerate decarbonisation.
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Following a pandemic-era exuberance with corporates announcing net-zero targets, Temasek’s “heads-up” that its 2030 goal may fall through could be the first of many such announcements here.
In a “far more constrained world” — to borrow Pillay’s words — corporates big and small will have to prioritise certain elements of the triple bottom line, a framework that aims to balance “people, planet and profit”. “Planet” could be forced to give way to its siblings as tensions rise on the world stage and in the boardroom.
Pillay aimed to assuage the industry that Temasek remains “fully committed” to its climate targets and that it is not “lowering ambition”. Whether the market understands it to be a presage and not a precedent remains to be seen.
See also:
Temasek reports record net portfolio value of $518 bil despite challenging environment
Temasek’s portfolio emissions flat y-o-y again, even as SIA logs record
