Ho Ching, Executive Director and CEO, Temasek Holdings spoke at the Asia Business Council 2021 Virtual Autumn Forum Day 4 on 16 September.

Good afternoon, everyone.

Thank you very much for inviting me to join you online this afternoon.

I hear that a number of you are in Hong Kong so I missed the chance to go and see all of you in person and enjoy having a yumcha together. Well, I will just take the next 15 minutes or so, to touch briefly on three challenges for businesses in Asia:

1.      The Role of Business in Society

2.      Disease X and the Risk of Future Pandemics; and

3.      The Climate Emergency

I have been asked to share something about Temasek, so I will close with some brief remarks on the role of Temasek as well.

The Role of Business in Society

First, the role of business in society.

We are living in an increasingly fractious world. The deepening fault lines will divide and destabilise us. This is a long term threat for businesses.

If businesses do not rethink our purpose, we risk losing the trust of our stakeholders and the wider community.

This means we have to broaden our engagements with society in terms of doing well, doing right, and doing good.

Doing well is about the core business of any company. You are all familiar with this.

Doing right is also something you are all familiar with. This is perhaps the hardest bit to do because it touches on the softer issues of people, values, and ethos of our organisations.

Doing good is about ownership, taking action for the longer term, and for the larger good.

I know that many business owners in Asia do plan for their future generations. Can we go further to build on this ownership mindset, to embrace a larger purpose and role in society? To do well, do right, and do good.

In some ways, some businesses may have contributed unwittingly to the widening social gaps. Some are natural monopolies which can promote an unhealthy winner take all culture. Others forget, choose to ignore, or take for granted, their social licences to operate.

For example, the gig economy and the internet delivery platforms. Can we do right for our de facto employees, even as we create new job opportunities for the marginalised?

The choices we make today can strengthen the people and our organisations over time. Or, they can pile in more systemic risks, that will blow up in the years to come.

Can businesses in Asia work together to strengthen the trust of society, particularly when we do well?

We have seen businesses come together before, for the common good – I am sure we can do that again.

Disease X and the Risk of Future Pandemics

Next, on the unknown Disease X to come, and the risk of future pandemics.

The world was able to respond quite quickly to COVID-19, partly with the help of businesses. We were lucky in many ways.

Private sector initiatives like GISAID and CEPI catalysed solutions quickly, even when governments and the general public were hesitant.

GISAID is the Global Initiative on Sharing Avian Influenza Data – GISAID.

It was launched in 2008, with one simple goal – to speed up the development of seasonal flu vaccines. This private-public partnership acknowledges the source of the genomic data, facilitated open cross border sharing of such data, and helped to build a global network of trust among various parties.

In the chaotic days of pandemic emergence, scientists entrusted GISAID with their first genetic sequence of the new virus. Their peers across the world could start work immediately – just at the click of a button, the data comes across and they could start work immediately – simultaneously, and collaboratively, to develop diagnostic test kits, vaccines, and other toolkits. GISAID now hosts over three million COVID-19 sequences.

CEPI is the Coalition for Epidemic Preparedness Innovations – CEPI. This initiative was launched just five years ago at the World Economic Forum in Davos, which many of you are familiar with. It is geared to galvanise rapid vaccine development in the fight against any emerging epidemic.

GISAID opened the doors for early global sharing of genetic data, while CEPI provided quick funding for early vaccine development.

COVID has shown that we still have gaps in our global response to pandemics – we need to plug those gaps, to be better prepared for an unknown Disease X to come.

So, can businesses in Asia lend their weight to enhance global health security, and to help mitigate the fallout on lives and livelihoods from future pandemics?

The Climate Emergency

On climate, it is now quite clear we are dealing with a “Climate Emergency”, as some of you may have heard in earlier sessions.

Our collective actions today are putting us on a path to a 1.5°C by 2040 – that’s less than 20 years away. This is an existential threat that is accelerating rapidly, if we do not take decisive actions now.

We have been slow to act. One or half a degree doesn’t sound very much, when we can see wider seasonal swings between spring and winter, for example. But this overlooks the tipping point for the Antarctica and Greenland glaciers to melt.

We have also been dragging our feet over the high cost of climate action. We ignore, or perhaps miss, the business opportunities on the other side of the coin of danger and crisis: “危机” (“wei ji”) as the Chinese would say – the danger and the opportunity.

The banking sector has already made a start, to identify the risk of stranded assets and the quality of their loan portfolio. Businesses have to factor the cost of money that is going to change.

Businesses have the organisational and technical managerial skills to reduce, or even reverse, the carbon stock in our planetary system.

True, there will be winners and losers. Politically, we will have to find a scaffolding, so that no one is left behind and everyone is on board.

We have two choices. Either we change, or the planet will change.

If we choose to maintain the status quo, it means our planet will change – we are already seeing huge fires and floods – these are operational risks that many businesses are familiar with now; extreme weather events are also happening more often and more severely. Ultimately, there will be no returns from a dead planet.

Conversely, a net zero carbon ambition by 2050, at least based on our simulation, will help lift returns in a 10 to 20-year timeframe – this is within our lifetime. Yes, it will require hard decisions, upfront investments, and the will to change and to act.

This longer term positive impact of an ambitious net zero carbon goal by 2050 is why Temasek has chosen to advocate for climate action by governments, people and businesses. We really have no choice but to act now.

Temasek in Society

Before I conclude, I would like to touch briefly on Temasek.

Some of you are familiar with our three roles, as investor, institution and steward.

Put simply, we aim to do well as an investor, we are determined to do right as an institution, and we are inspired to do good as a steward.

Do Well as an Active Investor

Temasek is first and foremost an intergenerational investor. We catalyse a sustainable future, for future generations, by investing in four kinds of capital – financial, human, social, and natural.

We invest financial capital to stimulate innovations and spur sustainable growth.

We uplift human capital to expand capabilities, and enhance our potential. We also want to build people, as people, to spark lifelong learning, and to build human resilience beyond just the Workforce 4.0 goals.

We seed social capital to transform lives for a more inclusive and resilient society. This includes embedding ESG considerations in our investment processes, while also trying to democratise opportunities for the masses.

Finally, we are keen to enable natural capital for a more liveable world. These range from our Decarbonization Partners fund with BlackRock to push for a net zero economy by 2050; to the Climate Impact Exchange (Climate Impact X) to facilitate trading of high quality carbon credits.

In deploying this capital, we look to earn more than just financial returns – we aim to deliver a more sustainable portfolio, one which can deliver beyond this decade, and one which leans forward for a better and more liveable world.

This is how we aim to do well as an active intergenerational investor.

Do Right as a Forward Looking Institution

We are also determined to do right as an institution and as an investment company.

Good governance and sustainability are the twin pillars of our institution building.

For example, when we think of ourselves as an intergenerational investor, we ask ourselves how we can foster an ownership mindset of owning the morning after, of thinking long term, well beyond one, two or a few years.

This is why we are among the very few companies in the world, with long term performance incentives of up to 12 years, not to mention clawback features. This is to align the interest of our people, for the longer term, and to reinforce ownership and accountability.

Every few years, we also revisit our mission and roles.

This helps our people to internalise and refresh what it means to do well as an investor, to do right as an institution, and to do good as a steward.

We do things today, with tomorrow in mind, because we want to remain relevant and alive to future challenges beyond our tenure. This means we are very mindful about creating flexibility and options for our successors to thrive, even as we deliver today.

In short, we are determined to do right, as a living and thinking organisation, as a forward looking institution, for generations to come.

Do Good as a Trusted Steward

Finally, on Temasek’s ambition to do good as a trusted steward.

Temasek has one special stewardship role that’s very different from most other companies. We are one of the few entities listed in the Fifth Schedule of the Singapore Constitution – we have a constitutional role and responsibility to protect our own past reserves – these are our past earnings.

Unlike GIC, which is a fund manager of the assets owned by the Singapore Government, Temasek is the direct owner of our assets. We have the freedom and flexibility, but also the risks and responsibilities, of a commercial investor.

Beyond that, we take upon ourselves the obligation to seed and fertilise the commons which gave us the social licence to operate. In particular, we look to uplift lives and communities, especially in Asia, and to protect our planet for future generations.

This was why we set up Temasek Trust, and the Temasek Foundation, as two separate non-profit entities.

Managing non-profit financial assets requires different skills and mindsets, than organising non-profit programmes. Hence, the two separate entities.

Temasek Trust looks after the financial gifts and assets, while Temasek Foundation focuses on developing and delivering community programmes.

Temasek Foundation is well anchored in Asia. Its three-prong mission is to help uplift lives and communities; to connect people for a more inclusive society; and to advance science and technology for a better and more liveable world.

Temasek itself will continue to put aside a share of its returns for these independent non-profit activities to support the wider community.

Invitation to consider two ideas for a better world

Here, I would like to invite all of you to join hands on the journey for a better, more sustainable, and more inclusive world – whether it’s in your investments, in your businesses, or in your personal investments.

I offer two quick ideas for consideration.

First, a number of businesses will be sponsoring the first ever Philanthropy Asia Summit. This is on the 15^th of November, just before the Bloomberg New Economy Forum in Singapore.

“Collaborations” and “actions” are the two watchwords of this Summit – to connect global and regional philanthropists, some of whom are here today in the audience; and to catalyse cross border partnerships, to better translate ideas into actions for a more sustainable future. We’ll be delighted to have all of you join us in this initiative.

The second idea is from Ray Dalio, who suggested setting up an Institute for Philanthropy Asia. This could be the focal point for companies, businesses, NGOs, as well as multilateral organisations and governments, to work together for the common good.

Conclusion

In closing, I applaud the good work that many of you are already doing, to actively transform your businesses, to do well, do right and do good.

I look forward to closer cross border collaboration, especially to address the two global threats of Disease X and the Climate Emergency.

Finally, I hope we can count on your advice, guidance and support for the Philanthropy Asia Summit and the Institute of Philanthropy Asia – these can be the start of a sustainable and sustained effort to strengthen the social fabric of society, build trust among the various stakeholders and, most importantly, extend the social licences for businesses to operate.

Stay well, stay safe, and thank you.