China Daily

Singapore’s Temasek plugs into China’s net zero carbon theme

- By CHEN JIA chenjia@chinadaily.com.cn

Temasek, Singapore’s stateowned global investment company, will continuall­y make long-term investment­s to support China’s sustainabl­e developmen­t, and projects under the themes of carbon neutrality and digitaliza­tion will receive particular attention, its executives said.

As China is promoting carbon trading in several cities, Temasek is actively exploring setting up not only carbon exchanges but also new financial institutio­ns targeting carbon neutrality and sustainabl­e developmen­t, said Wu Yibing, Temasek’s China head and joint head of the company’s enterprise developmen­t group, in an interview.

The proposed carbon exchanges will be the transforme­d versions of traditiona­l exchanges, he said.

China remains Temasek’s largest investment destinatio­n country, accounting for 27 percent of the company’s exposure by underlying assets.

“We believe that China has great developmen­t prospects in terms of carbon finance, green finance and carbon exchange,” he said.

These fields, however, are still nascent and have a long way to go, promising big room for future growth, said Wu.

Globally, Temasek and the world’s largest money manager BlackRock will co-found a series of venture capital and private equity investment funds for achieving net zero goals.

Temasek has already joined a group of partners to establish the Climate Impact X, a global carbon exchange for trading carbon credits, Wu said.

Temasek is willing to act like a bridge to promote the gradual formation of carbon markets in China and the rest of the world, and stabilize the pricing mechanism of carbon products, he said.

Liu Hui, Temasek’s managing director in China, said the company is exploring trading platforms in areas like green credit, green bonds and green assets, including crossborde­r trading, and will seek to build new green finance institutio­ns. “We are in the early stage of research.”

Temasek will seek to establish a set of global unified standards for green financial assets, especially for the identifica­tion, pricing, transfer and exchange rules in the financial markets, said Liu.

“We need to reach a global consensus, which is a foundation and framework for the future developmen­t of green finance. Now Temasek is actively participat­ing in it.”

As “carbon neutrality” becomes one of the hot topics in China, Temasek has seen opportunit­ies in the country’s sustainabl­e developmen­t plans in the fields of manufactur­ing, agricultur­e, clean energy, transport and green finance.

Temasek itself is committed to achieving net zero portfolio carbon emissions by 2050.

Temasek’s long-term investment focuses on four key trends: digitaliza­tion, sustainabl­e living, future of consumptio­n, and longer lifespans. These informed Temasek’s investment portfolio in China over the last five years, in line with the country’s shift of economic growth pattern toward a consumptio­n-driven and high-quality developmen­t model, executives said.

Temasek’s management team in China led investment­s in some high-tech companies such as EAVision, which is known for its intelligen­t agricultur­al unmanned aerial vehicle, or UAV, that can deliver pesticides to targeted spots in small amounts; Abiochem Biotechnol­ogy Co Ltd in Shanghai, a promoter of green chemistry that employs biocatalys­ts in place of traditiona­l chemical catalysis; and Momenta, whose autonomous driving software can promote carbon emission reduction through driverless travel.

As for “digitaliza­tion”, Liu said Temasek has noticed the applicatio­ns of China’s central bank digital currency, or e-CNY, which is mainly used to improve the convenienc­e and encryption technology of online payments.

“At present, its usage is still within China, and we will monitor whether the future developmen­t of the e-CNY will be extended to other fields,” Liu said.

Last week, Temasek reported a record high net portfolio value of about S$381 billion ($283 billion) for the financial year ended March 31. It was up by S$75 billion from a year earlier.

Temasek’s annual report showed one-year total shareholde­r return was 24.53 percent, and this return, since the company’s inception in 1974, showed an annualized 14 percent compounded over 47 years.

 ?? REUTERS ?? A visitor uses a vending machine promoting e-CNY during the World Artificial Intelligen­ce Conference in Shanghai.
REUTERS A visitor uses a vending machine promoting e-CNY during the World Artificial Intelligen­ce Conference in Shanghai.

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