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Sustainability is integral to GIC’s mandate: to preserve and enhance the international purchasing power of the reserves under our management. We believe that companies with strong sustainability practices offer prospects of better risk-adjusted returns over the long term, and that this relationship will strengthen over time as market externalities are priced in. Sustainability issues such as climate change have a material impact on companies, affecting their operations and financial performance, and shaping their long-term value.
We take a holistic and long-term approach towards sustainability across our investment and corporate processes. Investments may entail trade-offs between different sustainability objectives, especially in the shorter term. GIC integrates sustainability into our investment and corporate processes in a way that recognises the diversity of the industries and markets in which we operate, and the trade-offs and time needed for companies to make the transition.
We believe that it is more constructive to actively engage and support companies in their transition towards long-term sustainability, rather than to mechanically divest from certain industry sectors. By directly engaging with company management on how to operate more sustainably, we can create more value and more beneficial outcomes for our stakeholders over the long term.
Sustainability is a key investment consideration and top management priority at GIC. The GIC Board, along with its supporting committees – the Investment Strategies Committee, the Investment Board, and the Risk Committee – have oversight of GIC’s sustainability approach and considerations on climate change.
GIC’s Sustainability Committee, comprising senior leaders from our investment, risk and corporate functions, is tasked to implement the sustainability framework, and monitor and respond to Environmental, Social and Governance (ESG) issues. The Committee routinely engages management and the Board Committees on broad trends and emerging issues, as well as potential investment opportunities.
Our sustainability efforts across investment and corporate processes today are aligned with GIC’s Offence-Defence-Enterprise Excellence (ODE) Framework.
— Liew Tzu Mi, CIO, Fixed Income & Chair, Sustainability Committee
GIC recognises that new investment opportunities will open up as regulators, consumers, and businesses increasingly act on sustainability issues.
We aim to capture these opportunities by:
Below are some examples of our efforts:
Sustainability issues across the domains of the environment, social, and business governance pose investment risks. We protect our investments by:
How we operate sustainably as an organization is as important as the way we invest. We do this by:
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