SINGAPORE: As a sovereign wealth fund, GIC’s purpose is to manage part of Singapore’s reserves. But beyond its primary goal, the fund also considers the impact of its investments, including on people and the environment.
“In allocating capital to these different communities around the world, it also has a positive impact in terms of supporting businesses, building infrastructure, creating jobs even,” said CEO Lim Chow Kiat.
He was speaking to CNA ahead of receiving the Dwight D Eisenhower Global Citizenship Award in New York this week.
“We are thoughtful in how we deploy capital. We take a long-term view. We factor many things in even as we, of course, are in pursuit of good returns,” he said.
Mr Lim gave the example of GIC’s investment in Aegea, a water and sewage treatment company that serves millions of people in Brazil. GIC said Aegea has hired thousands of workers and reduced the discharge of raw sewage into rivers and seas.
“It has been a good investment, but it also contributes to public hygiene (and) water quality of that particular community.”
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Sustainability has also become a big part of every decision GIC makes, Mr Lim said. The fund has supported American firm Duke Energy in its transition toward green energy and invested in Greenko, a renewable energy company in India.
GIC does not have a net-zero target and believes that letting go of carbon-intensive companies from investment portfolios would not reduce emissions in the real economy.
Instead, it prefers to stay invested in companies that are willing to make the transition toward lower emissions, get out of stranded assets and invest in new green technologies like carbon capture.
Asked whether most of GIC’s investments are in the transition phase, Mr Lim said: “It’s a mix, but increasingly, more and more in the green area.”
Early in his career, there was an opportunity to move to Shanghai to develop GIC’s capabilities in investing in China, but “management used their discretion” and he ended up taking a position that needed to be filled urgently in the short-term asset division.
Asked if he regrets missing out on that opportunity, Mr Lim said he does not think he lost out by moving to the money market group. “The purpose is common,” he said.
But he did think of leaving GIC when he was younger.
“You wonder whether there are other things that you could do or explore, but at the end, GIC’s pull is too strong that I stayed on until now,” said Mr Lim, who tried to advertise for his organisation during his interview with CNA, citing competitive pay and the global nature of the work.
Being a father of three also affects how Mr Lim thinks about work – and aligns with GIC’s long-term investment mandate.
“They are the future. They, in a way, extend the horizons,” he said.
“You want them to do well, you want them to have a world that is getting better.”