How can Temasek enhance its sustainable investment strategies to better address climate change risks?

Introduction

Enhancing Temasek's sustainable investment strategies to better address climate change risks is a critical challenge that requires a comprehensive approach. As a seasoned product leader, I'll outline a strategic framework to improve Temasek's product offerings in this space, focusing on key stakeholders, pain points, and innovative solutions.

Step 1

Clarifying Questions (5 mins)

• Looking at Temasek's position as a global investment company, I'm thinking about the scale of their sustainable investments. Could you provide more context on the current percentage of Temasek's portfolio dedicated to sustainable investments, particularly those addressing climate change?

Why it matters: This helps us understand the baseline and potential for growth in this area. Expected answer: Around 20-30% of the portfolio is currently in sustainable investments. Impact on approach: A lower percentage might indicate a need for more aggressive expansion, while a higher percentage could suggest focusing on optimizing existing investments.

• Considering the long-term nature of climate change risks, I'm curious about Temasek's investment horizon for sustainable projects. What's the typical timeframe for these investments, and how does it compare to their traditional investment strategies?

Why it matters: This influences the types of solutions and metrics we might propose. Expected answer: Sustainable investments typically have a 10-15 year horizon, longer than traditional 5-7 year horizons. Impact on approach: A longer horizon might allow for more transformative, higher-risk strategies.

• Given the global nature of climate change, I'm wondering about the geographical focus of Temasek's sustainable investments. Are these primarily concentrated in specific regions, or is there a global spread?

Why it matters: This helps us understand if there are untapped markets or regions that could benefit from increased focus. Expected answer: Current focus is on Asia, with some investments in Europe and North America. Impact on approach: Identifying underserved regions could be a key part of our strategy.

• Thinking about Temasek's role as both an investor and a thought leader, I'm curious about their current engagement with portfolio companies on climate-related issues. How actively does Temasek work with these companies to improve their sustainability practices?

Why it matters: This helps us understand if there's room for improvement in Temasek's advisory role. Expected answer: Moderate engagement, primarily through board representation and annual reviews. Impact on approach: A low level of engagement might suggest focusing on enhancing Temasek's advisory capabilities.