Temasek Will Sit Out the Saudi Aramco IPO on Environmental Concerns

Singapore’s Temasek Holdings will not invest in Saudi Aramco’s mega-IPO, sources said, according to Bloomberg.

Temasek, which focuses on sustainability and environmental, social and governance (ESG) principles, will, therefore, be unable to participate in the Saudi Aramco IPO. Moreover, it has a 2030 target to reduce the carbon footprint of its portfolio companies by 50%.

That would be a setback for the IPO because Temasek is a powerful investor. It invested S$24 billion in the year ended March this year, across various asset classes. As of March 31, its portfolio was worth US$227 billion.

The Saudi Aramco IPO

The Saudis have been globally scouting for cornerstone investors, including Temasek. Saudi Aramco is said to be the world’s most profitable company. Therefore, the Saudi’s have targeted a valuation of between $1.1 trillion to $2 trillion.

Investment bankers are likely to deliver today (Friday) their recommended valuation of Aramco, according to the WSJ. People connected with the issue have said the valuation may turn out to be much below those expectations.

The company aims to complete its IPO by November this year. It may sell a 1% to 2% stake and list the shares on the Tadawul exchange.

Fossil fuels are a no-no for Temasek

Temasek CEO Dilhan Pillay said last month to Bloomberg: “I don’t think we’re going to be investing in fossil fuels.”

He did not refer to the Saudi Aramco IPO.

[Related Story: Credit Suisse To Include ESG Criteria in Fund Assets Worth CHF 100 Billion By 2020]

At the time Aramco made its first international bond issue this year, it warned that climate change could potentially have a “material adverse effect” on its business. Though the bond issue was a huge success, the ESG factor still hangs over the Saudi Aramco IPO of equity shares.

It’s not only Temasek. A large number of investors across the world are including ESG in their investing process.

A shareholder network known as Climate Action 100+, which is backed by more than 300 investors managing US$32 trillion (S$43 trillion), has been able to pressurize companies such as Glencore, BP, and Royal Dutch Shell on environmental issues.

[Related Story: Goldman CEO David Solomon: Time for ESG Investing to Go Mainstream ]

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.

Alt Insights

May 21, 2020

Venture Capital: British Startup Offers Travel Jaunts on the Never-Never

Venture Capital: British Startup Offers Travel Jaunts on the Never-Never

Latest Alternative Investment News
Private Equity: Coty Sells Majority Stake of Hair Business to KKR
June 1, 2020     News, Private Equity

Beauty products firm Coty (NASDAQ: COTY) and KKR (NYSE: KKR) have entered into a strategic transaction for Coty’s Professional and Retail Hair business. The transaction includes the Wella, Clairol, OPI…
Liquid Alternatives: AuM of Actively Managed ETFs Shows 36% Add Y-on-Y
June 1, 2020     Liquid Alternatives, News

Investors are increasingly interested in targeted strategies inside an ETF product. More than half of ETF launches thus far in 2020 have been actively managed ETFs, observed Yones on CNBC’s…
Digital Assets: China Merchants Aims To Be the First Blockchain-Powered Port in the World
June 1, 2020     Digital Assets, News

China Merchant’s Port (HKG: 0144), the country’s largest port operator, is collaborating with Alibaba Group (NYSE: BABA), and its subsidiary, Ant Financial to develop a distributed ledger technology (DLT), or…
Venture Capital: Startups Higi and Tock Raise Most of Chicago’s VC Haul of $68M in May
June 1, 2020     News, Venture Capital

According to data from Chicago Inno, tech, and start-up companies in Chicago raised approximately $ 68 million of venture capital during the month of May. At the top of the…

Scroll to Top