August Session: Kyung-ah Park w/ Temasek

ESG: Insights from Kyung-ah Park

Section 1: Temasek

Q1: What is Temasek and how is it structured? 

Temasek was established in Singapore’s early years as a separate entity managing state-owned assets. It operates as a holding company, owning many of Singapore’s leading firms while investing globally. Over time, it grew from focusing on emerging markets to becoming a global player, with U.S. investments now surpassing China. Its primary strategy is direct equity investing, supported by global teams of about 1,000 professionals. Temasek recently marked its 50th anniversary, emphasizing independence—no government officials sit on its board or investment committees—and retains a “core” Singapore portfolio of about 40%. Its U.S. office opened in 2014, and America now represents the largest exposure outside of Singapore.

Q2: How does Temasek approach investments? 

Temasek emphasizes bottom-up equity investing with tremendous flexibility across markets and asset classes. The firm maintains offices in San Francisco, New York, and Washington D.C. with about 100 people, while its Singapore base anchors broader operations. The firm highlights adaptability—ranging from early-stage venture to mature buyouts—depending on opportunities, partners, and macro conditions.

Section 2: Firm's ESG Journey

Q1: What were the key phases of Temasek’s ESG evolution? 

Initially, ESG was approached philanthropically. Between 2015 and 2017, Temasek created its sustainability team; between 2018 and 2020, it formed an impact investing team. Since 2021, ESG has been embedded into investment theses and portfolio management. Climate and inclusive growth are viewed holistically across all activities. Temasek has committed to halving portfolio emissions by 2030 (from 2010 levels) and achieving net zero by 2050. It also began publishing sustainability reports to increase transparency and accountability.

Q2: What external milestones shaped ESG finance? 

Goldman Sachs sought to integrate ESG into investment research as early as 2007, with climate treated as a systemic risk. The 2013 Green Bond Principles marked a turning point by unlocking debt capital markets and creating incentives such as lower interest rates. Temasek noted that sustainability-linked financing improved business cases by lowering cost of capital while standardizing disclosure expectations, driving broader adoption.

Q3: How does Temasek measure ESG impact? 

A single rating is insufficient; instead, assessments vary by industry and model. For example, asset-heavy businesses should prioritize supply chain and waste management, while asset-light firms should emphasize human capital. Greenhouse gas emissions remain the most standardizable metric, while areas such as water management are hyper-local. The emphasis is on decision-useful data rather than exhaustive datasets, tailoring depth depending on company maturity and geography.

Section 3: ESG Integration

Q1: How does Temasek integrate ESG into investment processes? 

Temasek applies a 10-year investment horizon, with every investment undergoing ESG due diligence followed by post-engagement. Seven sustainable living focus areas guide activity. Restricted industries are few, but when considered, the firm evaluates mitigants (e.g., coal efficiency). Portfolio engagement is critical, especially with carbon-heavy Singaporean companies. Temasek uses an internal carbon price of $65/ton (Scope 1 & 2), rising to $100 by 2030, to internalize externalities. About 82% of emissions come from five portfolio companies, so engagement prioritizes these.

Q2: What platforms and partnerships support transition finance? 

Temasek co-founded Decarbonization Partners with BlackRock to address the “missing middle” in scaling climate tech, raising over $1.4 billion. With Brookfield, it supports later-stage brown-to-green transitions through the Brookfield Transition Fund. It also launched GenZero, a $5 billion-backed platform supporting nature- and tech-based carbon solutions, as well as carbon market infrastructure such as Climate Impact X. With HSBC, it formed Pentagreen Capital, a 50:50 debt JV using concessional capital to de-risk and crowd in private finance for green infrastructure.

Q3: What are the main challenges? 

Policy volatility creates uncertainty for long-term, capex-heavy investments. The U.S. market is particularly cyclical, while China shows steadier execution. Rising interest rates and competing investment themes like AI and defense divert capital. Supply-chain fragmentation and tariffs disrupt access to critical equipment such as transformers. In downturns, “tourist capital” exits, but patient investors with deep operating partners can capture opportunities as valuations reset.

Q4: How are ratings versus fundamentals evaluated? 

Ratings may misrepresent reality (e.g., Tesla once scored lower than ExxonMobil due to governance issues). What matters is a company’s forward-looking practices and management quality. Temasek emphasizes fundamentals—credible transition plans and strong management—over headline ESG ratings.

Section 4: Career Journey

Q1: How did Kyung-ah Park pivot into sustainability and Temasek? 

After eight years in investment banking and M&A as Senior VP, her first child prompted a reassessment. She joined Goldman Sachs’s new Environmental Markets team, which felt more purposeful. Later, during the pandemic, she transitioned to Temasek, which she viewed as a calling: Asia needed to implement the sustainability agenda, and finance could be harnessed for societal good. She underlined the widening inequality in the U.S.—with the bottom 50% owning just 2% of wealth—as a core motivator to channel finance toward inclusive outcomes.

Q2: What experiences shaped her leadership? 

She stresses the importance of stepping outside one’s comfort zone. Working in South Africa after apartheid revealed both optimism and challenges, contrasting with Singapore’s resource-limited growth driven by visionary leadership, and Korea’s chaebol-led trajectory. Her international experiences taught that macro conditions—market, asset class, timing—can outweigh alpha-chasing. Focused expertise in a few key areas, coupled with long horizons, compounds advantage.

Q3: What advice does she offer? 

Define values (work ethic, integrity) to anchor decisions. Purpose provides courage and persistence. Finance, when linked with sustainability, can create meaningful contributions for future generations. Have conviction but also pragmatism: partner with strong operators, navigate policy environments, and apply structuring skills to scale real solutions.

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From Our Mentees 💬

Serim, Mentee

"I rarely have the opportunity to meet professionals working directly in ESG, so hearing from Ms. Park through HerVest was deeply meaningful. It was especially valuable to understand ESG not just in theory but from the perspective of a global firm like Temasek.  Key takeaways for me included how ESG at Temasek evolved from philanthropy to embedded investment practice, the use of internal carbon pricing, and the creation of dedicated platforms like GenZero and Pentagreen. These examples showed me that ESG is both strategic and operational, requiring structured data, long-term patience, and collaboration with partners. This session gave me a clearer sense of direction for my own career exploration in ESG. I now feel encouraged to pursue this path further and to continue learning how sustainability and finance can align."

Sangeun, Mentee

"ESG often comes up in the finance sector, but I always wondered how it is applied in real operations and funding decisions. This session clarified that integration is multi-layered—from ESG due diligence in every deal, to internal carbon pricing that shapes investment economics, to transition platforms that crowd in capital.  I realized how critical ESG has become for capital allocation: not a side agenda, but central to investment theses and portfolio value creation. The insights into policy volatility, cost of capital, and supply-chain fragmentation also helped me see ESG as a financial risk management tool. Hearing directly from a leader who has pioneered ESG within major financial firms gave me a much deeper understanding. It was inspiring to see how finance can lead in addressing global challenges, and I now feel more equipped to think about ESG in my own future finance career."

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