Capturing opportunities

GIC recognises that new investment opportunities will emerge as regulators, consumers, and businesses increasingly act on sustainability issues. We aim to capture these opportunities by:

• Integrating sustainability into our investment processes, including in due diligence, risk assessment, and monitoring;
• Actively engaging our portfolio companies on sustainability issues that are material to their long-term business prospects; and
• Investing thematically in opportunities arising from climate change and other sustainability trends.

Integration

Our investment groups across public and private markets integrate sustainability considerations into their decision-making process, focusing on the issues material to each company’s long-term economic prospects. For example, our investment groups examine the carbon intensity of companies in the energy sector relative to their peer group. For significant positions, they may also conduct carbon price stress-testing against GIC’s set of climate scenarios.

Teams maintain regular dialogue with portfolio companies on sustainability risks and opportunities, and vote responsibly. We also engage with external fund managers and general partners on their sustainability policies and practices, and ensure our investments with them are managed in a manner consistent with GIC’s sustainability approach.

Investing Thematically

In 2020, GIC established the Sustainable Investment Fund (SIF) – a dedicated investment portfolio coordinated across the public and private market investment groups – to accelerate sustainability integration across all asset classes and to invest in sustainability-related opportunities that would generate good returns over time. SIF has since helped to catalyse additional department-led efforts in sustainability, including:

• Sustainability portfolio for Asian equities
• A portfolio dedicated to InfraTech and sustainability-related infrastructure
• A private equity portfolio focused on energy transition solutions
• Investments in technologies that would improve energy efficiency in real estate
• Investments in asset-backed securities related to sustainability themes
• First sustainability-linked deposit with Standard Chartered Bank

Protecting our portfolio

Sustainability issues across the domains of the environment, social issues, and business governance pose investment risks. We protect our investments by:

• Regularly screening our existing portfolios for material sustainability risks;
• Conducting additional due diligence for companies and assets exposed to greater sustainability risks and adjusting our long-term valuation and risk models accordingly; and
• Stress-testing our portfolio and significant holdings against a range of climate scenarios and carbon price projections.

Pursuing enterprise excellence

How we operate sustainably as an organisation is as important as the way we invest. We do this by:

• Communicating clear expectations for sustainable behaviour to our business partners;
• Managing our resource use through environmentally conscious office design and smart technology to monitor and improve our energy efficiency; and
• Maintaining carbon neutrality in our operations across all our offices globally.

We achieved our target to become carbon neutral in our global operations in FY2020/21, and have maintained that in FY2021/22. GIC remains committed to monitoring and managing our footprint by avoiding and reducing unnecessary carbon emissions. We have also put in place measures to offset any remaining emissions using Gold Standard-certified projects in the near term.