Temasek takes on sustainability challenge

[SINGAPORE] A long-term investor with a strong public service sensibility and a massive portfolio must inevitably confront the issue of sustainability.

For Singapore government-owned investment company Temasek Holdings, that time has begun in earnest, chairman Lim Boon Heng hinted on Monday at a dinner to mark Temasek's 40th anniversary.

"This spirit of doing things today, with tomorrow very clearly in our minds also describes the ethos of Temasek," Mr Lim said. "It forms our values and culture as a long-term investor, as a forward-looking institution and most of all, as a trusted steward."

Singapore President Tony Tan Keng Yam recalled that Temasek was created as a way to keep government from overly influencing its commercial interests.

"Many state-owned companies, or SOEs, around the world are protected from competition and cushioned from corporate realities through subsidies in various guises. This leads to an unlevel playing field."

He especially noted how many Temasek-linked companies became regional and global champions on their own. "Temasek didn't make them champions. They competed fiercely and freely against the best in the world for a customer base far larger than our home market."

But Temasek is also distinctive as an investor with a horizon that is longer than most funds. That gives the fund the imperative to consider the issue of sustainability.

Mr Lim spent significant time discussing Temasek's recent focus on environmental sustainability. The firm on Sept 19 organised an "Ecosperity" conference with Goldman Sachs and the National University of Singapore to explore the issue of sustainable growth.

Temasek is also in talks with Singapore's JTC Corp regarding the potential merger of their infrastructure and development units.

Accounting for the environment does not take away from economic development, Mr Lim stressed.

He recounted Singapore's experience, from simple initiatives such as the annual Tree Planting days to the Clean Air Act, which has been strictly enforced even in the face of the potential loss of foreign investments.

"Looking after our environment is not something reserved only for the more prosperous or more developed nations," Mr Lim said. "Growth does not mean sacrificing a sustainable environment for our people."

Mr Lim said that the concept of sustainability extends beyond the environment. Temasek had also seeded 16 non-profit endowments, and is a champion of corporate governance.

"This is also why we actively promote good governance, and sound and fair regulations - we are always looking at the need to ensure long-term sustainability, be it financial, environmental, organisational or people."