An area of particular focus in 2023 was developing the integration of climate considerations into Mubadala’s investment lifecycle. We continue to have great conviction that integrating climate considerations into our investment decisions is core to successfully fulfilling our mandate of delivering strong financial returns and creating opportunities for future generations.

Mubadala has been working for several years to gain a deeper understanding of the carbon footprint of our portfolio and the potential effects of climate change on our most impacted portfolio companies. To help understand the impact of new investments on our climate strategy, in 2023 we introduced a tool to help us estimate the carbon footprint of new investments and provide preliminary insight into the potential impacts of carbon pricing on a company’s operations.

As part of our ESG integration efforts, in 2023, we developed our annual climate deep-dive exercise on our most carbon material investments. This exercise, based on the framework of the Task Force on Climate-related Financial Disclosures (TCFD), now incorporated as part of the International Sustainability Standards Board (ISSB), provides insight into portfolio companies’ climate performance, and identifies material climate-related opportunities and risks. We work collaboratively with our portfolio companies to develop their strategies and management processes to increase their climate resilience. We encourage all our portfolio companies to adopt robust TCFD reporting.

Engagement and impactful asset management is central to our climate strategy and implementation of Mubadala’s Net Zero commitment. Our annual Climate deep-dives and Project Decarb are just two examples of Mubadala’s efforts in this space.