Tembusu Partners launches its first Sustainable Future Fund in collaboration with Eco-Business

Singapore, 28 October 2021  – Tembusu Partners in collaboration with Eco-Business today announced the launch of the Sustainable Future Fund (SFF), an inaugural platform that will deploy purpose-driven capital into solving the most urgent sustainable development challenges across Asia. 

The targeted USD 100 million fund will pursue high impact growth stage opportunities across the region that focuses on addressing the climate crisis and reducing social inequalities. 

The Intergovernmental Panel on Climate Change (IPCC) report issued recently — described as “a code red for humanity” by the UN Secretary General António Guterres — warns that rising temperatures will lead to dangerous weather extremes and rising sea levels in the coming years, and Asia is particularly vulnerable to its effects.

With the COP26 UN Climate Change Conference set to take place next week in Glasgow, Scotland, Guterres has stressed that more ambition is needed with respect to climate mitigation, adaptation, and finance. 

For Southeast Asia in particular, sea levels are rising faster than elsewhere, and shorelines are retreating in coastal areas where 450 million people live. At the same time, the region is also home to the world’s most rapidly developing markets with huge infrastructural needs. 

A recent UNESCAP report reveals that even before the pandemic, the Asia-Pacific region was not on track to meet any of the UN Sustainable Development Goals (SDGs) by 2030. The SDGs are an investment pathway that can help the region overcome economic uncertainty and tap into a trillion-dollar opportunity for new businesses, products and services that help achieve a sustainable and equitable future. 

The Sustainable Future Fund is uniquely positioned to take advantage of these opportunities and drive change in the region with its impact-driven investment strategy and proprietary framework for ESG assessment that will ensure its portfolio companies deliver not just financial returns but demonstrable impact. 

It will take a broad sector approach and focus on the five high opportunity areas it has identified: energy transition, climate action, sustainable cities and circular economy, sustainable food and agriculture, and inclusion.

The Sustainable Future Fund will tap on the vast, combined networks of Tembusu Partners and Eco-Business which provide an inside track to a strong deal pipeline, and will seek family offices and investors who are aligned in values and committed to supporting this mission to create impact in Asia.

The fund is pleased to welcome its first overseas investment partner, Horizon Family Partners, who have committed to raise up to US$20 million from a number of prominent international family offices.  Horizon Family Partners was created to bring together like-minded multi-generational families to deliberate innovative ideas relating to global sustainability.

In addition, the Fund is delighted to welcome family office Rumah Group and its philanthropic arm Rumah Foundation, as a limited partner. Led by established philanthropist Stanley Tan, who is co-founder of the Asia Philanthropy Circle, the Group has committed to investing S$5million and will play an active role in exploring market-based solutions for sustainable development.

The fund today also announced the international advisory board members joining its team. They include:

• Georg Kell, founding executive director of the United Nations Global Compact and chairman of Arabesque;

• Michael Meehan, chairman of the UK Sustainable Investment & Finance Association (UKSIF) and former CEO of the Global Reporting Initiative (GRI);

• Nicholas Parker, impact entrepreneur, founder of The Cleantech Group and former chair of Corporate Knights;

• and chaired by Lim Hwee Hua, Former Minister in the Office of the Prime Minister of Singapore and Second Minister for Finance and Transport

“The themes we are focusing on in this fund target founders and companies which solve some of the biggest issues of our era. Together with Eco-Business, we aim to support the scaling up of new and growing impact-driven businesses in Asia, towards building a sustainable future. We are also delighted that KPMG will be supporting the Fund by providing insights on ESG developments,” said Andy Lim, chairman of Tembusu Partners.

Mr Ong Pang Thye, Managing Partner, KPMG in Singapore said: “Investing in companies that have a clear roadmap on how to help countries and societies achieve sustainability will shift the needle for global climate change. Ultimately, lending financial support is about seeding the best insights into the ecosystem, so that deep-seated change can really happen.

“KPMG in Singapore welcomes working alongside Tembusu Partners to make sustainability a reality, as we provide insights on ESG trends that impact the near and longer-term of Asia’s future, while encouraging companies to consider ESG transformation efforts that can make that difference for environment, economy and enterprise growth”, he added.

The Sustainable Future Fund has a robust pipeline of quality deals and has already invested in an Indonesian start-up in the financial inclusion space. It is in the midst of investing into another three opportunities in the region involved in areas such as mental health, energy transition and sustainable cities.

The Fund features General Partners Andy Lim, Jessica Cheam and Brandon Courban; and a seasoned investment team comprising Jonathan Ang, Jen Loong and Venture Partners Tharani Prakash and Junice Yeo. 

“This unique fund will be well-positioned to tap the growth of the ESG and impact investing space in Asia. By helping to facilitate capital into the most promising companies in the region, we will be able to further scale our sustainable development impact,” said Cheam, managing partner of the fund and founder of Eco-Business. 

Lim Hwee Hua, advisory chair, added: “The urgency of the climate crisis is finally becoming the mainstream concern that it should be. The good news is that ESG and finance are becoming more closely intertwined – and there is growing evidence today to show that investors can see better, more sustainable returns through ESG investing. There is a huge opportunity here for capital to be deployed in game-changing solutions across Asia.”

For more details visit www.tembusupartners.com or email sff@tembusupartners.com

About Tembusu Partners

Tembusu Partners is a boutique private equity investment firm that invests in promising early and growth-stage companies with a view to generate sustainable returns for both investee companies and investors. Besides supporting companies through mezzanine and equity financing, it also contributes operational expertise to help them grow. Headquartered in Singapore, its primary geographical markets are within Emerging Asia – comprising China, India and Southeast Asia. For more information, please visit www.tembusupartners.com.

About Eco-Business   

Established in 2009, Eco-Business is an independent media and business intelligence company dedicated to sustainable development and ESG performance. It publishes high quality, trusted news and views in multimedia formats on business and policy developments around the world with a sustainability and ESG-focused lens. Eco-Business provides research and consulting on a wide range of issues which create strategic value for our partners and clients. It owns and creates thought-leadership platforms which inform policymaking, improve business practices and foster collaboration among different sectors. Eco-Business is headquartered in Singapore, with a presence in Manila, Beijing, Kuala Lumpur, Zurich, New York, and correspondents in major cities across the world. Visit us at www.eco-business.com

It also hosts a new global sustainability innovation platform called The SDG Co (www.thesdg.co.) This tech-driven platform connects start-ups, corporates, governments and investors working on the United Nations’ Sustainable Development Goals (SDGs) and provide a global community space where people and businesses across the globe can network, learn, meet experts, partner and share innovations.

In Memory of John G. Ruggie

Arabesque.com

It is with great sadness that we announce the passing of John G. Ruggie, at the age of 76.

John Ruggie touched many minds and hearts, and leaves behind a towering legacy of thought leadership in human rights and social innovation. As an intellectual, he greatly influenced global affairs at the intersection of a globalizing world, with a particular concern for societal implications. As a social innovator, and as policy advisor to former Secretary-General of the United Nations, Kofi Annan, John played a critical role in launching the UN Global Compact in 2000, which has since become the world’s largest corporate sustainability initiative. He was also a driving force behind successful institutional reform and renewal at the UN, for which the United Nations as a whole were awarded the Nobel Peace Prize in 2001.

That same year, John left the United Nations for the Harvard Kennedy School of Government, where he served as Berthold Beitz Research Professor in Human Rights and International Affairs, although he kept in close touch with the UN organization. In 2005, Annan appointed Ruggie as the UN Secretary-General’s Special Representative for Business and Human Rights, tasked with proposing measures to strengthen the human rights performance of the global business sector. In 2011, the UN Human Rights Council, in an unprecedented step, unanimously endorsed the “Guiding Principles on Business and Human Rights” that John developed through extensive consultations, pilot projects and research. The ‘Ruggie Principles’ have since made their way into numerous national legislations and have helped shape the progress of human rights in business in the 21st century.

John was a Fellow of the American Academy of Arts & Sciences and received numerous awards from academic and professional societies for his contributions to social science, public policy, and the development of international law. During the last years of his life, John chaired the board of the non-profit organization Shift, and served on the Board of Arabesque where his wit and principles-based approach to markets guided strategies and operations.

Georg Kell, Chairman of Arabesque and founding Executive Director of the UN Global Compact, today said:

“John Ruggie was my mentor and friend for nearly three decades. I can think of no other person whose mind and heart could span so many geographies and disciplines. During his years at the UN, it was not difficult to locate him in the building – one had to just follow the sound of his unique laughter, which cheered up diplomats and bureaucrats alike! And more recently, it was energizing to engage with John on the role of new technologies for a more sustainable world. He had a beautiful and curious mind, but most of all a kind heart.”

“John’s career as an academic and a social innovator is an inspiration to all young people who look for purpose. His principles-based approach to all matters of decision-making is a role model for us all.”

John, you will be greatly missed. We will not forget you, and we will continue to grow your legacy. The good fight for fairness, respect, understanding and reason will go on.

UN Global Compact 15th Anniversary. John - a great friend, a great mentor

Volkswagen Board meeting with Sustainability Council discusses the end of the internal combustion engine

By Robin Whitlock, Renewable Energy Magazine

Herbert Diess, CEO Volkswagen Group (left), and Georg Kell, Sustainability Council.

The Sustainability Council called for an even stronger discussion on Volkswagen Group’s corporate purpose to provide CO2 neutral mobility for all, together with a clearly defined end date for internal combustion engines. During the discussion, both sides agreed on a more thorough ESG (Environmental Social Governance) reporting system, and to commission an additional study on socially responsible workforce transition.

The firm commitment of Volkswagen to the EU Green Deal includes the demand for more green energy, faster exit from fossil energy production, rapid expansion of charging infrastructure, and new rules for state aid to strengthen the transformation and decarbonisation of industry and production sites. The nine-member Sustainability Council has been advising Volkswagen on strategic issues relating to sustainability and social responsibility since 2016.

Investment criteria will increasingly centre on ESG aspects, making it necessary for Volkswagen to strengthen its ESG reporting, ensuring transparency and measurability.

“Volkswagen has the opportunity to set itself apart from the competition with its global sustainability agenda” said Georg Kell, Founding Director of the UN Global Compact and Spokesperson for the Sustainability Council. To operationalise an even more systematic ESG management, the Council recommended building up a proprietary data system.

On a political level, former EU Commissioner for Climate Action Connie Hedegaard emphasised the need for strong collaboration between CEOs and European policymakers to demonstrate that European businesses support the target to reduce EU greenhouse gas emissions by 55 percent by 2030 versus the 1990 levels. Volkswagen is a founding member of the “CEO Alliance for Europe’s Recovery, Reform and Resilience” and as such has been fostering the dialogue between politics and business to help implement the European Green Deal to underline the commitment to the demanding climate targets of the European Union. Ottmar Edenhofer, Director of the Potsdam Institute for Climate Impact Research, pointed out the challenges of a carbon border adjustment mechanism that will require international cooperation as well as the need for industry to invest in pilot projects on negative emission technologies (carbon capture). The Council members also called on Volkswagen to set decarbonisation goals in line with the ambition to limit global warming to 1.5 degrees

Regarding a concrete date for the end of the internal combustion engine, Volkswagen CEO Herbert Diess explained that switching to battery-electric vehicles only makes sense from a climate perspective in countries with adequate green energy supplies.

“We’re fully committed to becoming climate- neutral” Diess reiterated. “It’s important to acknowledge that our story is a transition story and we expect the transformation to take two car model lifecycles.” In the EU the end of combustion engine might come earlier after 2030 than in Latin America. Overall, the effectiveness of e-mobility as a driver for climate protection depends on primary energy use..

The top priorities of the Council for the next two years include supporting Volkswagen to become a purpose-driven company, which in the Council’s view is crucial to guaranteeing employees’ buy-in for the transformation.

“It’s the reason that makes employees get out of bed every morning” said Magdalena Gerger, CEO and President of Systembolaget AB. Encouraged by the Council’s recommendation, Volkswagen decided to include the purpose discussion in its “Strategy 2030,” which will be presented later this year.

The transition to e-mobility and digitalisation will also have an impact on employment and workforces. A study by Fraunhofer Institute for Organisation and Industrial Engineering IAO commissioned by the Sustainability Council emphasises that e-mobility and digitalisation will cause a smaller decline in the workforce at Volkswagen than research studies had previously indicated. At the meeting, Michael Sommer, former President of the Confederation of German Trade Unions, presented the plan for a new research project on work and qualification in 2030.

The current five-year plan in China and its impact on Volkswagen were also discussed. Council Member Ye Qi, Professor of Environmental Policy and Management at Tsinghua University Beijing highlighted that the implementation of the plan is expected to require more ambitious decarbonisation measures. Volkswagen Group China already announced that all production sites for the fully electric MEB- platform are to be powered exclusively by green energy.

Companies are crucial to solving the climate crisis. 75% are falling short

By Hanna Ziady, CNN Business

London(CNN Business)Less than a quarter of the world's big public companies are doing their part to address the climate crisis, according to new research highlighting the shortcomings of corporate climate pledges.

In an analysis published on Thursday, sustainable finance firm Arabesque assigned companies in 14 of the world's largest stock indexes a "temperature score" based on publicly reported emissions data between 2015 and 2019.

It found that less than 25% of companies are on track to achieve the goals of the Paris agreement by 2050, which aims to limit the global temperature increase to 1.5 degrees Celsius.

Despite growing commitments by companies to tackle the climate crisis, emissions have continued to rise since 2015 and initial data shows there was a decrease in global Paris-alignment last year, according to Arabesque, which uses data to assess corporate sustainability performance.

The company's chairman, Georg Kell, said the research confirms that voluntary measures taken by companies "have made a difference here and there, but they don't add up to systemic change."

"This is a critical year," Kell, who is founding director of the UN Global Compact, told CNN Business. "Time is running out. We need to significantly step up, we have only a few years left."

Arabesque's research found that flagship indexes in Sweden, Germany, Switzerland, Finland and Japan have the largest number of listed companies on course to meet the 1.5 degrees Celsius target by 2050. The figure is lower for London's FTSE 100 (UKX) and the US S&P 100 (OEX), and drops even further for Hong Kong's Hang Seng Index and Australia's ASX 50.

The study covered emissions generated directly and indirectly by companies, known as scope 1 and scope 2 emissions, but did not cover emissions from the products they sell, known as scope 3, due to difficulties obtaining this data.

Arabesque's data also shows that 15% of companies, with a combined market value of $5 trillion, are not publicly disclosing their greenhouse gas emissions. That's an improvement on 2014, but "has yet to translate into corporate climate action at scale," said Rebecca Thomas, who led the research.

"While overall progress is encouraging, a lot more needs to be done to keep the 1.5-degree goal within reach," she added.

Putting a price on carbon

The report coincides with the start of a two-day virtual summit on the climate crisis convened by US President Joe Biden, which dozens of world leaders are expected to attend. The summit will "underscore the urgency — and the economic benefits — of stronger climate action," according to a statement issued by The White House last month.

While governments around the world are including environmental projects in their coronavirus recovery plans, the International Energy Agency warned earlier this week of a surge in global carbon dioxide emissions as economies bounce back from the pandemic.

Kell said that governments have been slow to act on the climate crisis, particularly when it comes to carbon pricing, which effectively taxes companies for carbon pollution and is widely viewed as the most effective way for countries to reduce emissions. "We have to price carbon significantly higher across the board in order to have systemic change," he added.

Given relatively little government intervention, Kell said it was "not a small thing" that a quarter of companies are aligned with the Paris goals.

"The fact that many European former oil and gas companies are exploring renewables and electrification should be welcome," he added, pointing to the shift towards electric vehicles among car manufacturers as another sign of progress that was "unthinkable" just a few years ago.

"The imperative to decarbonize is increasingly urgent and it will be forced upon corporations ready or not," Kell said. "Those that think ahead and anticipate a higher carbon price in the future will clearly be much better positioned."

A third of top UK firms' CO2 emissions not in line with global climate goals

theguardian.com, Jasper Jolly

The mining sector performed poorly in terms of reducing CO2 emissions by 2050 in research by climate data investment research firm Arabesque. Photograph: Philimon Bulawayo/Reuters

Analysis shows emissions from 31 FTSE 100 companies are well above what’s needed to hit Paris targets

Three out of 10 of the UK’s biggest public companies emit carbon dioxide at a rate that would contribute significantly to the climate crisis, according to analysis that shows the scale of the challenge for corporate Britain to cut emissions to zero.

Thirty-one members of the FTSE 100, the index of Britain’s largest listed companies, are emitting carbon dioxide at a rate consistent with global temperature increases of 2.7C or more by 2050, according to analysis by Arabesque, a company that provides climate data to investors.

Highlighting the mounting risks to the planet, the rise would be above the target set under the 2015 Paris climate accords to limit global heating to below 2C and pursue efforts to limit it to 1.5C. A temperature rise of 2.7C is thought to be likely to lead to severe damage to the environment and to human life.

Oil companies including BP and Royal Dutch Shell are among those that produce carbon dioxide emissions consistent with temperature rises of more than 2.7C, even without taking into account the emissions related to the fossil fuels they dig up and sell, known as scope 3 emissions.

The mining sector also performed poorly, with Anglo American, Antofagasta, BHP, Evraz, Fresnillo and Polymetal all among the companies scored at above 2.7C.

Georg Kell, Arabesque’s chair, said he believed the momentum has turned decisively in favour of decarbonisation in recent years, although investors were only starting to consider climate risks as financial risks. However, he added that there were still issues with companies’ disclosures of their emissions.

“Too many companies are playing the benchmarks to look good,” Kell said. “Our current system does not adequately price the good and the bad. Our old systems still do valuations based on past experiences.”

Kell, who previously founded the United Nations Global Compact, a voluntary pact between business leaders hoping to cut emissions, said he hoped that the UN’s Cop26 climate meeting, to be hosted by the UK this year, could prove to be as important a landmark moment as the Paris agreement in the push for decarbonisation.

Goals for the summit, a key event for the UK government, might include forcing laggards to catch up or even moving towards a regime of enforcement of enforcement of decarbonisation targets, as well as opening the way to further collaboration efforts.

“I’m very optimistic now because we have an historical alignment – the politics is aligned,” he said.

The push to green the UK economy has gained momentum as well. Many of the companies at the 2.7C or higher level on current emissions have recently committed to setting science-based targets, which are based on United Nations benchmarks and are viewed by environmentalists as the gold standard of audited plans to cut emissions.

They included packaging company Smurfit Kappa, property company British Land and water companies Severn Trent and United Utilities. Decarbonisation technology does not yet exist at scale for airlines, but International Airlines Group, the owner of British Airways, has committed to setting a science-based target once parameters for airlines are agreed, which is likely to be this year. Building materials company CRH disputed Arabesque’s findings, saying it has a science-based target at a 2C scenario that has been independently verified to be aligned with the Paris climate goals.

Arabesque assigned scores to most of the FTSE 100 by calculating their greenhouse gas emissions per dollar of revenue, a measure based on the latest disclosed emissions that allows comparisons between companies of different sizes. The scores only took account of scope 1 and 2 emissions, which are those directly under the companies’ operational control or resulting from their use of electricity, steam and energy.

Some large polluters on the FTSE 100, including Anglo American, BP, Evraz and Glencore, have said they will cut emissions to net zero before 2050, but have given little detail on how they will achieve this.

Some 27 of the 83 companies analysed have already reduced their emissions intensity at a rate that is compatible with keeping temperature increases to 2C or lower.

Arabesque’s analysis does not cover the entire FTSE 100 as data from some companies is not up to date. Those companies not included are mainly services companies, which tend to have smaller direct carbon emissions, although some of those companies including banks have been criticised for funding other polluting companies.

Companies consistent with 2.7C heating or more: Admiral Group (insurance), Anglo American (mining), Antofagasta (mining), Ashtead (equipment rental), Associated British Foods (food and retail), BHP (mining), BP (oil), Bunzl (packaging), DS Smith (packaging), Evraz (mining), Ferguson (heating products), Fresnillo (mining), Glencore (mining), Intertek (product testing), Morrisons (supermarket), National Grid (electricity), Next (retail), Pennon Group (water), Polymetal (mining), Rentokil Initial (pest control and cleaning), Rio Tinto (mining), Royal Dutch Shell (oil), Smith & Nephew (medical equipment), and Whitbread (hospitality)

Companies at 2.7C, but committed to science-based targets: British Land (property), CRH (building materials), Croda (chemicals), International Airlines Group (airline), Smurfit Kappa (packaging), Severn Trent (water), and United Utilities (water)

All of the companies that responded to requests for comment said they were working to cut their carbon emissions by 2050.

Growing ESG data and tech markets becoming integral to sustainable finance

By Aaran Fronda | Published in Bobsguide on 3 February 2021

Technology will drive “radical transparency” in sustainable finance and ensure coherence on the road to net-zero

Global inflows into sustainable funds were up 88 percent in Q4 2020 to $152.3bn compared with the same period in 2019, with Europe continuing to dominate the space, accounting for 80 percent of these inflows, while the US took in 13.4 percent, up slightly from 12 percent in the last quarter, according to a recent report by Morningstar.

But while statistics show investors’ appetite for firms with a strong ESG track record, if sustainable finance is to effectively play its role in the decarbonisation movement, financial markets must embrace new technologies capable of analysing raw data to limit greenwashing and ensuring businesses transition to long-term sustainable practices.

“One key development we have seen in the past year is the rise of sustainability-linked bonds,” says Lili Hocke, product manager, sustainable finance opinion services at Sustainalytics, a provider of ESG research and ratings for investors. “The green bond market has developed a lot over the last decade, but there are still signs that, in some parts of the market, the issuing of a green bonds doesn’t necessarily mean that it will lead to a reduction in carbon emissions.”

In January, reports surfaced about institutional investors divesting green bonds issued by the State Bank of India after it came to light that the lender intended to use some of the proceeds to finance the Adani Carmichael coal mine in Australia – a project that is estimated to generate 4.7 billion tonnes of greenhouse gas emissions over its lifetime. For some, the story raised questions around how serious financial institutions are about sustainable financing, and the need for more data to shape portfolio management.

“I don’t think greenwashing will ever be avoided fully,” says Georg Kell, chairman of Arabesque, a technology company that uses AI and big data to assess sustainability performance relevant for investment analysis and decision making. “The good news is that ESG data can increasingly be benchmarked against actual performance and thereby minimise the risk of investors being tricked.”

“We need to use technology to drive radical transparency to ensure coherence.”

The ESG data market is thriving, with an expected annual growth rate of 20 percent for ESG data and 35 percent for ESG indices, while the overall market could approach $1bn in 2021. Data providers like Sustainalytics and Arabesque are developing a range of ESG products that include everything from raw data to aggregated scores and second-party opinions of green bond issuers frameworks to ensure financial instruments are in line with market expectations and industry best practices.

“Bond issuers and fund managers need to be clear with their investors about whether the fund is doing positive or negative screening,” says Sam Robinson, deputy treasurer at Hitachi Capital UK, a leading provider of financial solutions for retail, motor, business and consumers. “Investors need to take a holistic view of the companies and projects they invest in, rather than simply looking at a green bond or ESG fund as hitting the UN’s Sustainable Development Goals (SDG) to avoid sustainable financing becoming just a box ticking exercise.”

This rising trend resulted in Morningstar acquiring Sustainalytics in April 2020, with the Chicago-based firm’s CEO acknowledging that modern investors in public and private markets are demanding ESG data, research, ratings, and solutions to make informed, meaningful investment decisions.

In turn, as socially responsible investing grows increasingly important to investors and AI-driven data analysis empowers them to effectively assess the “greenness” of various sustainable financing options it is prompting businesses to bolster their ESG reporting to provide tangible data or risk losing access to cheaper funding.

“Previously in our ESG reports we had talked a lot about sustainability initiatives, but I think investors really want to see that stuff quantified,” says Robinson. “What investors really want to see is how many ‘green’ vehicles we are financing? How much CO2 is your EV/ hybrid fleet or ESG project saving per year?

“A key point that investors want to see in corporate ESG reports is targets and a clear roadmap to track and ensure a company hits those targets.”