SINGAPORE: Temasek Holdings' carbon emissions are expected to increase in the near term, the state investor said on Wednesday (Jul 8), highlighting the growing challenge of reaching its long-term goal of net-zero emissions by 2050.

For the past three years, the carbon output of its portfolio has remain unchanged at 21 million tonnes of carbon dioxide equivalent (tCO₂e), according to its 2026 sustainability report released as part of the annual Temasek review.

The firm had previously set an interim goal of reducing portfolio emissions to 11 million tCO₂e by 2030, but that target is increasingly difficult to achieve after having cut emissions by 30 per cent since 2019.

In a briefing ahead of the 2026 report's release, Temasek's chief sustainability officer Park Kyung-Ah said the global environment has changed significantly since the firm set its initial climate targets in 2019.

"The path to decarbonisation has become a lot more complex," she said, pointing to geopolitical fragmentation, policy shifts, tighter capital conditions and rapid technological disruption driven by AI.

These macro factors, combined with the challenges of scaling solutions for hard-to-abate sectors, have impacted the company's interim climate targets, Ms Park said.

Her comments echo what Temasek Holdings' CEO Dilhan Pillay Sandrasegara said at its flagship sustainability event Ecosperity Week earlier this year, when the company first acknowledged that it was unlikely to meet its 2030 climate target of halving net portfolio emissions from 2010 levels.

Mr Pillay said then that this was due to two primary factors - the exposure to aviation and the power generation sectors.

In the media briefing, the firm said that its long-term 2050 goal remained unchanged.

"Our net-zero ambition is clear, and it's unwavering," Ms Park said, describing Temasek's approach as one of "pragmatic ambition" – balancing long-term climate goals with the "real-world" constraints of the economy, technology and political challenges facing businesses.

Looking ahead, Temasek said it would focus on implementation, portfolio engagement and investing in technologies that can drive "real-world impact" rather than simply divesting high-emitting assets.

In its report, Temasek noted that decarbonisation pathways are non-linear and added that the company has s...