GIC and Temasek Holdings' Investments in Haze-linked Companies
Ministry of FinanceSpeakers
Summary
This question concerns Mr Leon Perera’s inquiry into Government monitoring of GIC and Temasek Holdings’ investments in haze-linked companies and measures to prevent funding haze activities. Minister for Finance Heng Swee Keat stated that investment decisions are made independently by management on a commercial basis, as unsustainable practices could negatively impact long-term commercial value. He explained that while the Government monitors overall portfolio performance, Temasek supports zero-burning policies and GIC ensures its Indonesian palm oil investments comply with such policies. GIC’s investment teams actively engage with management to highlight that responsible environmental actions are essential for maintaining the long-term value of their companies. This governance approach ensures that both entities operate to maximize sustainable, long-term risk-adjusted returns while maintaining independence from any Government interference or influence.
Transcript
7 Mr Leon Perera asked the Minister for Finance (a) whether the Government monitors if GIC and Temasek Holdings have investments in haze-linked companies; (b) if so, how much are the total investments of GIC and Temasek Holdings in these companies; and (c) how will GIC and Temasek Holdings ensure that their investment monies do not support haze activities.
Mr Heng Swee Keat: The individual investments of GIC and Temasek are the responsibility of their respective management teams, while the Government monitors the performance of their overall portfolio. GIC and Temasek operate on a purely commercial basis in order to maximise long-term risk-adjusted returns and the individual investment decisions are fully independent of any Government interference or influence. This is an important governance principle that we seek to maintain.
The investment activities of GIC and Temasek are oriented towards generating long-term returns on a sustainable basis. Investing in companies with environmentally unsustainable practices could negatively impact the commercial value of the investments over the long term.
Temasek has stated3 that it fully supports zero-burning policies for land clearance and would urge palm oil companies and plantation owners to do the same. GIC has also informed the Government that the palm oil companies in Indonesia that GIC invests in have confirmed that they observe zero-burning policies for their plantations. GIC's investment teams engage actively with the companies' management and highlight that such responsible actions are important for maintaining the long-term value of the companies.