Anyone hoping for clear answers about Sasol’s commitment, or lack thereof, to meeting its own emission targets would have been disappointed at the AGM last week.
Board chair Muriel Dube said the company would change in step with the country. But South Africa is off target with its climate goals and still exploring for oil and gas. According to Climate Action Tracker, the country’s policies and actions to achieve net zero by 2050 are insufficient.
At this year’s AGM, for the first time in three years, shareholders were not given a vote on Sasol’s climate plans. Instead, they were told there’d been no climate report and there would be no vote because the company was working on its plans and would give more details at a capital markets day some time next year.
Only shareholders were able to read the questions asked in the chat box. And it was again an electronic-only meeting, after the 2023 AGM was interrupted by Extinction Rebellion protesters who brought people to tell their stories about how Sasol’s emissions had allegedly affected their own and their communities’ health.
Sasol cannot be ignored when it comes to harmful emissions. This oil and petrochemicals company is on the global list of the 57 biggest companies that contributed to 80% of the world’s carbon dioxide emissions from 2016 to 2022, according to the Carbon Majors database in April.
And for Sasol to hold its AGM in the same week as COP29, the world’s biggest annual conference on climate change, was potentially tone-deaf. It’s a time of heightened awareness about greenhouse gases and the devastating impact burning fossil fuels has on the environment.
Robyn Hugo, director of climate change engagement at shareholder activism organisation Just Share, noted: “Sasol again opted to hold an electronic-only AGM, as it did earlier this year when it reconvened the November 2023 AGM it cancelled after its interruption by protesters.”
Best practice is to hold a hybrid AGM, which makes provision for both in-person and online attendance. Hybrid AGMs provide the broadest opportunity for effective participation and communication, and minimise the potential for shareholder rights to be infringed, according to Hugo.
Still, she said the AGM was well run — but argued that the online-only format undoubtedly stifles interaction, and that questions are never answered in a meaningful way.
At the AGM, Sasol president and CEO Simon Baloyi indicated that when the group set its various emission reduction targets in 2021, it did so with reference to the market conditions which prevailed at the time — which included that gas was easily available. It has since had to optimise its emission reduction road map “because we don’t have gas”. He said that part of this optimisation would “make sure that we maximise the Secunda facility”.
Baloyi denied that Sasol is engaged in negative lobbying around the carbon tax, but rather “what we are advocating for, as Sasol, is to make sure that the extent and pace of the transition is equally matched with the carbon tax to make sure that it’s very, very realistic to all of us, and not just to Sasol but to the whole South African industry”.
Hugo believes South Africa’s effective carbon tax rate remains far too low to incentivise the just transition and ensure that the “polluter pays”.
“Until Sasol faces significant consequences for the harm it causes — including through a strong carbon tax — there is no disincentive for business-as-usual emissions. This is evidenced by the fact that Sasol’s GHG [greenhouse gas] emissions have increased in the past two years and are expected to increase again this year.”
In response to Just Share’s question about lack of progress on its decarbonisation targets, executive vice-president: business building, strategy & technology Sarushen Pillay said Sasol’s emissions are “heavily related to our production volumes” and that it expects higher production levels this year than in the past two years, which would likely result in a “slight increase in our emissions”.
He indicated that the integration of renewable energy would result in some emission reductions from next year.
Sasol also claimed it had correctly reported its emission reduction baselines and targets. Just Share believes this is not the case.
“Baloyi wrongly stated that it had set a ‘30% target reduction for the whole organisation’. In fact, as set out in Just Share’s briefing, there are different baselines for the 2026 and 2030 targets, and there are different parts of the business included in each of the targets.
“To allow shareholders and other stakeholders to assess Sasol’s progress or otherwise with each of these targets, it must report clearly against all its respective emission reduction targets, using the correct baselines.”
Just Share added: “Sasol’s continuous moving of the goalposts and extensive use of qualifying language undermines its credibility: the company consistently avoids clear tracking of its performance against targets, and does not provide detailed implementation pathways and [a] clear accountability mechanism.”
By not allowing a vote on its decarbonisation plan, Sasol may have avoided a potentially embarrassing level of shareholder opposition. The declining support for its climate resolutions — from 94.54% in 2021 to 77.36% in January this year — suggests growing shareholder scepticism about Sasol’s commitment to its climate plans and ability to implement them.
By avoiding a “say on climate” vote, while claiming to be “optimising” its emission reduction pathways, Sasol can sidestep immediate shareholder scrutiny while it prepares potential revisions to its climate commitments.
The board gave no hint at the AGM as to whether it would be pushing its target dates further out.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.