Petrochemical company Sasol’s plan to reduce its hefty polluting emissions and transform into a more environmentally friendly company received approval from the majority of shareholders at its annual general meeting (AGM), even though activists feel the plan is too vague and likely to achieve little.
Sasol is under pressure to move from being one of the most polluting companies in the world to using renewable energy. As many global investors are moving away from companies that use coal, Sasol remains heavily reliant on the commodity to make fuel. Its plant in Secunda in Mpumalanga is one of the world’s worst air polluters.
If Sasol cannot transition to cleaner energy, investors will walk away, posing a risk to the sustainability of the company.
Sasol CEO Fleetwood Grobler told the AGM the company is under pressure to move to the use of cleaner energy sources. “In recent years there has been a dramatic increase in the pressure to decarbonise businesses and adopt more sustainable technologies.”
He said pressure comes “from investors, regulators, civil society, employees and customers”.
The Sasol green plan proposes a switch from the use of coal for fuel to more reliance on natural gas, even as its gas fields in Mozambique are maturing. This will be a transition until Sasol can employ cleaner technologies such as green hydrogen — hydrogen gas generated entirely by renewable energy.
“The energy transition presents unique challenges for SA given that it is among the world’s highest per capita greenhouse gas emitters,” Grobler said at the AGM.
Many activists expressed unhappiness at the AGM about plans to switch to the use of more natural gas.
But Grobler said it produced 50% fewer greenhouse gas emissions than coal and thus Sasol believed it had a very important role to play as a transition energy source.
The decarbonisation plan’s first milestone that must be met is in 2026. It proposes that Sasol ensure zero emissions by 2050, something climate activists such as Just Share find too distant to be meaningful.
Just Share and some other Sasol shareholders were disappointed with the support for its green plan, which they feel cannot be implemented.
Just Share’s Robyn Hugo said: “This overwhelming vote in favour of Sasol’s climate change resolution is a disappointing reflection of the failure of investors to interrogate or understand the significant gaps in Sasol’s plans.”
She said the plan improves transparency but does not reduce emissions.
“It constitutes nothing more than an endorsement of incremental progress. And let us be clear, we are talking about progress in disclosure not progress in emission reductions.”
Just Share also believes the vote in favour of this plan sends a message to Sasol that it has done enough despite the glaring absence of detail about how the plan will be executed, how feasible it really is, what the cost implications are, and how it will affect SA’s overall ability to finance and achieve a just transition to a low-carbon economy.
Many attendees at the AGM expressed concern that Sasol’s carbon emissions have actually increased since it set its first emission reduction target in 2019.
Sasol explained that this was because in 2020, during the pandemic, some sites were undergoing maintenance, while in 2021 everything was fully operational, leading to an increase in emissions.
This year, the non-binding votes on executive pay at the AGM garnered more than a 75% majority vote, signalling support for Sasol’s remuneration policy. There was much dissatisfaction last year when shareholders rejected the pay policy, resulting in Sasol having to meet unhappy shareholders.
On Friday, before the AGM, protest groups around SA called attention to Sasol’s pollution.
The AGM was a lengthy affair, with senior executives answering more than 30 questions from shareholders and environmental groups, as well as former disgruntled employees.
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