Temasek tops sovereign wealth funds’ ranking for governance, sustainability and resilience

SINGAPORE - Singapore’s state investor Temasek retains its pole position on a scoreboard measuring the governance, sustainability and resilience (GSR) practices of state-owned investors and public pension funds.

Among the 200 investors being assessed in the 2024 rankings, Temasek scored a maximum of 100 per cent, along with four other state-owned investors. They are Canadian pension fund managers British Columbia Investment Management Corp and Caisse de Depot et Placement du Quebec, as well as the Ireland Strategic Investment Fund and the New Zealand Superannuation Fund.

This is the second consecutive year that Temasek achieved full marks for the annual assessment conducted by Global SWF. The data platform developed this scoreboard in 2020 as a tool for analysing the GSR practices of these global investors.

GIC scored 64 per cent in this year’s assessment, an improvement of four percentage points from the year before, though its rank was not stated in the report.

The average score across all 200 funds increased to 61 per cent in 2024, compared with 60 per cent last year, said Global SWF in a report released on July 1.

“The improvement has been similar among sovereign and pension funds; and especially around sustainability, as funds are increasing their impact activities and commitments, and reporting them in a regular and meaningful way,” read the report.

It added that the pressure of sustainability goals at the organisation level are having an impact on the preferences of state-owned investors.

The amount of investments going into green assets, such as renewable energy, has been higher than money flowing into oil and gas, as well as mining assets – termed as black assets in the report – since 2021. This trend has persisted through the first half of 2024, although the level of investments flowing into black assets has gradually increased over the years.

Sovereign wealth funds in Asia achieved an average score of 52 per cent, lower than the averages of Oceania (80 per cent) Europe (73 per cent) and North America (68 per cent), but higher than sub-saharan Africa (50 per cent), Middle East and North Africa (48 per cent) and Latin America (43 per cent).

Asia’s average score of 52 per cent was an improvement from 51 per cent the year before, even though newer or low-scoring funds, such as the Philippines’ Maharlika Investment Fund and Bhutan’s Druk Holdings and Investments, were included.

The report said that Temasek continues to be the reference in the region, while GIC is also pushing its sustainability agenda and performed better this year as it provided details around its decarbonisation strategies in its annual report.

Temasek remains the only Asian investor among the top 14 in the 2024 rankings. In addition to the best five that scored a 100 per cent, the report highlighted nine other high-scoring institutions which achieved 96 per cent.

They are CPP and Ontario Teachers’ Pension Plan from North America; Norges Bank Investment Management, German Nuclear Waste Management Fund and Compania Espanola de Financiacion del Desarrollo from Europe; Public Investment Fund from the Middle East; Nigeria Sovereign Investment Authority from Africa; as well as Aware Super and Rest Super from Australia.

Among the third tier of investors that achieved a score of 92 per cent were South Korea’s Korea Investment Corporation and Thailand’s Government Pension Fund. THE BUSINESS TIMES