Shareholder activists have approach global investors over Sasol’s refusal to table climate-related resolutions at its upcoming AGM, as environmental pressure mounts on the synthetic fuel and chemicals group.
The activist groups, Just Share and the Raith Foundation, last month filed a shareholder resolution at Sasol calling on the company to explain to shareholders how it is aligning its global strategy, emission reduction targets and executive remuneration with the goals of the Paris Agreement — a landmark environmental accord to strengthen the global response to climate change.
On October 30 2020, Sasol informed the groups that it would not table the resolutions, marking the third consecutive year that the synthetic fuel and chemicals group has declined to table such resolutions.
That is in spite of a handful of large SA companies in the past 18 months allowing for such resolutions to be table and which have, in many instances, been passed by shareholders.
Sasol is the second-largest emitter of greenhouse gas on the African continent and its Secunda plant — where fuel is produced from coal — is, according to Greenpeace, the largest single-point source of CO2 emissions anywhere on Earth.
In a letter, Sasol said its legal position had not changed since it first engaged with the activists in 2018, adding that the co-filers are not legally entitled to table shareholder resolutions relating to climate risk.
Sasol also said its emission reduction target and associated road map are aligned with the principles of the Paris Agreement. It further noted the proposed resolution was submitted too late.
Just Share and Raith, which disagree with the company’s assertions, have written to the lead engagers with Sasol for the Climate Action 100+ (CA100+), an investor initiative to ensure the world’s largest corporate emitters take necessary action on climate change.
Sasol is one of the world’s 100 “systemically important emitters”, accounting for two-thirds of annual global industrial emissions.
The initiative has more than 500 investor signatories with more than $47-trillion in assets under management, including fund manager BlackRock.
In SA, Ninety One and Coronation Fund Managers are signatories, but the lead engagers with Sasol are US-based Fidelity International and Alliance Bernstein.
On October 21 2020, the CA100+ wrote to Sasol, as it has to all of its focus companies, calling on the company to make renewed commitments towards aligning with the Paris Agreement Goals.
In its letter, Just Share said it wished to work with the CA100+ to advance their mutual interest in ensuring that Sasol aligns its business model with the goals of the Paris Climate Agreement.
“This is a fundamental issue of corporate governance,” Tracey Davies, executive director of Just Share, told the Business Day. “Shareholder resolutions are the only way that every single shareholder can express a view on particular matters to do with a company.
Further, she said, Sasol’s legal reasons are not robust and are undermined by five other listed companies in SA having tabled these resolutions without any adverse legal consequences.
Ultimately, Sasol is not taking sufficient action, Davies said. “It is not fast enough and it is not ambitious enough.”
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