Chemicals and energy company Sasol faces further shareholder pushback on its climate change commitments and slow progress in achieving emissions-reduction targets.
In a letter to investors on Friday, the financial services giant — which holds a 3% stake in the company — made clear its intentions not to support three nonbinding advisory resolutions that will be put to shareholders at Sasol’s AGM on Friday because of how they relate to Sasol’s climate commitments.
Earlier this year, Old Mutual criticised the company for its “vague” decarbonisation blueprint.
Sasol’s carbon policy dominated discussions at the group’s AGM last year with activist shareholders accusing it of lacking ambition and clarity — and this year appears likely to be no different.
Sasol, one of SA’s biggest carbon emitters, was the largest single contributor to its portfolio’s emissions profile, said Old Mutual.
“We have been actively engaging the company on its approach to the climate emergency for a number of years, including through a shareholder resolution in 2019 calling for strengthening of the company’s climate plan …. Since that escalation, which did yield positive results in the form of a commitment by the company to develop and disclose a climate plan, we have continued to engage the company and monitor its ambitions.”
Despite continued engagements and “requests for ratcheting up of ambition and for improved disclosure of tangible outcomes” Sasol’s commitment to achieving its climate targets appeared to be regressing, it said.
As a result, Old Mutual will vote against a resolution to approve Sasol’s climate change report.
“It strikes us that this year’s nonbinding advisory resolution on climate change makes no reference to targets (as was the case in previous years) and as such doesn’t sufficiently afford shareholders the opportunity to voice discontent with progress on climate change strategy implementation … We believe this is a step backwards by the company which appears to avoid negative review of the company’s performance,” said Old Mutual.
It also will not support a resolution on the implementation report of Sasol’s remuneration policy because, while climate-related targets have been included into Sasol’s remuneration policy, “these targets have been further diluted in the light of nonachievement”.
Old Mutual also said it would not support the re-election of Muriel Dube as a director at Sasol.
“Sasol has confirmed that the ultimate accountability for the climate strategy sits with nonexecutive director Muriel Dube. Given our persistent discontent with the strategy’s ambition and with the implementation thereof, we cannot, in principle, support the re-election of this director for this year’s AGM.”
In the run-up to Sasol’s AGM, activist shareholder organisation Just Share also accused Sasol of reneging on its target to cut emissions 30% by 2030 and of not disclosing adequate details to its investors.
As previously reported by Business Day, Just Share said Sasol’s major shareholders would need to explain to their clients why their efforts to engage with the company to ensure it commits to and achieves appropriate decarbonisation have failed. They would also have to explain to investors why they believed “continued investment in what is increasingly becoming a stranded asset, is good for their long-term investment outlook”.
Sasol hit back at the criticism from Just Share, saying in a statement that it remained committed to its 2030 greenhouse gas (GHG) reduction target.
Sasol said it has exceeded its 2026 renewable energy commitment with the signing of a 600MW renewable energy power purchase agreements (PPAs). “These commitments are linked to our executive remuneration incentives. In addition, we have progressed energy and process efficiency improvements on our SA sites and have reduced total Sasol group GHG emissions by about 5% to date, off a 2017 baseline.”
The group said it has also made progress in achieving a 5% reduction of greenhouse gas emissions by 2026 for its energy business in SA, having already achieved about a 4% reduction relative to 2017.
With Kabelo Khumalo
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