China SIF 2025: ESG as a Strategic Guide for Global Investment

On December 2, 2025, the 13th China Sustainable Investment Forum Annual Conference was held in Beijing, bringing together regulators, investors, academics, and international organisations to examine how responsible investment is evolving amid geopolitical uncertainty and climate risk. Hosted by SynTao Green Finance and co-hosted by the United Nations Environment Programme Finance Initiative and the UN Sustainable Stock Exchanges Initiative, the conference focused on the changing global ESG landscape and the next phase of sustainable finance.

A keynote address was delivered by Franziska Zimmermann, Managing Director of Sustainability at Temasek, titled “Navigating Complexity: ESG as a Strategic Compass for Global Investment.”

 

Temasek’s Longstanding Engagement with China

 

Zimmermann began by outlining Temasek’s decades-long presence in China, dating back to the 1980s through portfolio companies operating in sectors such as property, hospitality, and services. In the early 2000s, Temasek established its Beijing office, one of its first international locations, to strengthen its position in emerging Asia. Today, with offices in Beijing, Shanghai, and Shenzhen, China stands as Temasek’s second-largest market outside Singapore by underlying exposure. She emphasised that long-term partnerships and trust have been central to Temasek’s ability to participate in China’s growth, with continued interest in opportunities across the green economy, life sciences, and domestic consumer brands.

 

China’s Green Transition and Global Spillovers

 

Turning to the green economy, Zimmermann highlighted China’s rapid shift toward clean energy and innovation. In 2023, the country added close to 300 gigawatts of renewable capacity, representing 63 percent of global growth. She also noted the accelerating overseas expansion of Chinese green technology manufacturers, explaining how these investments are reshaping global clean-tech markets and supporting faster decarbonisation in emerging economies.

 

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Embedding Sustainability in Portfolio Strategy

 

Zimmermann stressed that sustainability is central to Temasek’s investment approach rather than an overlay. The firm seeks to deliver long-term financial returns while contributing to net zero goals, nature-positive outcomes, and inclusive growth. Achieving this, she noted, requires sustainability to support both social acceptance and commercial viability, ensuring that businesses strengthen resilience and competitiveness while creating value for all stakeholders.

 

Investing in the Energy Transition

 

A key structural theme guiding Temasek’s portfolio is Sustainable Living, which focuses on investing in lower-carbon businesses and scaling transition solutions. In China, Temasek was an early investor in the energy storage and electric vehicle sectors. Its portfolio now spans the EV value chain, including exposure to companies such as CATL and BYD, alongside investments in AlphaESS, Yangzhou Nanopore, and PCG Power. Zimmermann also highlighted Temasek’s efforts to scale capital through partnerships, including the launch of True Light Capital in 2021 to invest in areas aligned with its long-term strategy.

 

Asia’s Climate Finance Challenge

 

Expanding the lens to the regional level, Zimmermann described Asia as critical to global climate outcomes. The region accounts for around half of global emissions and remains heavily dependent on coal. At the same time, Asia faces an estimated annual climate financing gap of 800 billion US dollars, with emerging economies struggling to attract capital due to a combination of real and perceived risks. She characterised this gap as one of the most significant investment opportunities of the current decade.

 

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Mobilising Capital Through New Financing Models

 

Addressing this challenge requires moving beyond financing individual green projects toward embedding sustainability within financial systems. Zimmermann pointed to blended finance, carbon markets, and transition credits as important tools for mobilising capital at scale. She cited the Green Investments Partnership, launched with the Monetary Authority of Singapore and other partners, which recently secured 510 million US dollars in committed capital to support green infrastructure across South and Southeast Asia. She also referenced Temasek’s role as a knowledge partner in the Transition Credits Coalition, which is exploring mechanisms to enable the early retirement of coal-fired power plants.

 

Governance, Accountability, and Long-Term Value

 

Zimmermann concluded by outlining Temasek’s approach to governance and accountability. ESG considerations are integrated across the investment lifecycle, from due diligence to portfolio management. Since 2021, Temasek has applied an internal carbon price of 65 US dollars per tonne to its investment and operating decisions. Through active ownership and engagement tools such as its Climate Transition Readiness Framework and ESG Value Creation Playbook, the firm works with portfolio companies to strengthen climate resilience and long-term value creation.

In closing, she emphasised that climate risk transcends borders and cannot be addressed by any single institution. Drawing on China’s experience and Temasek’s own journey, Zimmermann argued that sustainability is not a trade-off, but a foundation for resilience and durable growth in an increasingly complex global economy.

 

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