Dear Stakeholders,
Amid the geopolitical headwinds and the need to balance security and affordability, the pursuit of sustainability is facing a challenging juggling act. There is pullback from the global commitment to net zero and Environmental, Social, and Governance (ESG) issues are being questioned. The adverse impacts of climate change and biodiversity degradation as well as growing societal challenges are no longer distant — they are here and now.
Companies with strong board oversight and management teams that can navigate these material issues are better positioned to strengthen their long-term competitive advantage and generate sustainable returns. This is why we remain steadfast in our sustainability strategy and continue to advance our climate, nature, and social roadmaps with a focus on material risks and opportunities. Over the past year, we deepened engagements with top emitting companies in our portfolio on climate transition readiness. We also integrated a biodiversity risk assessment tool and rolled out a more systematic social baseline risk assessment.
We have continued to invest in Sustainable Living trend-aligned opportunities with a S$46 billion1 portfolio value as at 31 March 2025, up S$2 billion from last year. However, given policy volatility, we have been more targeted in our capital deployment. We focused on differentiated technologies with competitive moats and follow-on investments that have cashflow visibility and geopolitical resiliency. We also leveraged public market dislocations to take companies private and help them scale.
We strengthened partnerships with other investors who have deep operating capabilities and synergies to enhance execution and amplify collective impact. This includes core-plus infrastructure opportunities that facilitate energy transition. These investments not only contribute to our sustainability goals but also offer attractive defensive characteristics with inflation-protected cashflows. Through our debt financing platforms, Pentagreen Capital and Clifford Capital, we forged strategic partnerships to unlock innovative climate financing solutions for Asia’s emerging markets.
A low-carbon future requires the transition of incumbent industries. Investing in climate transition, including the brown to green transition, is an imperative. We remain open to climate transition opportunities where we can have a real-world impact even though this could mean emissions attributable to our portfolio will rise before they fall. We have been working with partners including the Monetary Authority of Singapore and our carbon solutions platform, GenZero, on the development of high-integrity transition credits to fill a critical financing gap.
We also continue to engage and support high-emitting portfolio companies in their decarbonisation journey. Given that these businesses continue to grow amidst slower scale-up of much needed solutions for hard-to-abate sectors, such as sustainable aviation fuel, green hydrogen, and carbon capture and storage, it will be challenging to meet our interim portfolio target of halving our emissions on an absolute basis by 2030. But we are not taking our foot off the pedal. In addition to monitoring technological inflections, we are helping to build ecosystem capabilities and taking a systems approach to bring greater demand visibility and financing mechanisms to support the scaling of such critical solutions.
The road ahead will remain bumpy, but it is also filled with opportunities. By staying true to our Purpose — So Every Generation Prospers — and by leveraging our strengths and collaborating with partners that share a common vision, we will navigate these turbulent times and continue creating positive impact and long-term sustainable value.
KYUNG-AH PARK
Chief Sustainability Officer
July 2025
