Consideration of Environmental, Social and Governance Factors in Investment Decisions of Singapore's Government Investment Funds

Mr Louis Ng Kok Kwang asked the Minister for Finance (a) whether environmental, social and governance (ESG) factors are considered in the investment decisions of Singapore's sovereign wealth funds; and (b) whether the Ministry will consider requiring these institutions to adopt ESG standards used increasingly by private investors and sovereign wealth funds in countries, such as Malaysia and South Korea.

Mr Speaker, GIC and Temasek operate on a commercial basis in order to maximise long-term risk-adjusted returns, and their individual investment decisions are independent of the Government. While the Government does not prescribe how they invest, both emphasise sustainability in their investment activities.

The investment activities of GIC and Temasek are oriented towards generating long-term returns on a sustainable basis. Both entities recognise that good sustainability practices are good for business and can have a positive impact on long-term returns. Conversely, companies with poor sustainability practices carry business and reputational as well as environmental, social and governance risks.

And that is why GIC integrates sustainability considerations holistically into its investment processes, in order to protect and enhance the long-term value of its investments.

Likewise, Temasek is committed to delivering sustainable value over the long term as a responsible investor. It takes a strong interest in not only understanding sustainability-related challenges but also the opportunities for innovation, business growth and new investments.

And more than just considering environmental, social and governance factors when making decisions as an investor, asset owner and shareholder, Temasek is a strong advocate for sustainable economic and social development. For example, it has seeded independent public good institutions to build new capabilities and established six Temasek Foundations championing various causes, including sustainability and innovative solutions, to improve liveability and mitigate climate threats.