The search for a new Sasol CEO will be undertaken by a new chair after Sipho Nkosi resigned from the role on the eve of the group’s AGM, which is scheduled for Friday, when the company’s commitment to reducing emissions will come under shareholder scrutiny.
One shareholder, Old Mutual, has already indicated it will not vote in favour of the majority of the group’s resolutions because of its “poor performance on climate targets”. It will lobby other shareholders to do the same.
The oil and energy major, valued at about R142.4bn on the JSE, said on Monday that Nkosi stepped down on Friday as some of his business interests might be seen as a possible conflict of interest with Sasol.
“Mr Nkosi came to the conclusion that while he was comfortable that he would be able to comply with the conflict of interest requirements of the Companies Act and of the company, he was concerned that some of his business interests may be perceived to place him in conflict with the interests of Sasol,” the company said in a brief statement on Monday.
Successor
The announcement did not go into detail, but Nkosi has extensive experience as the former CEO of coal miner Exxaro and founder of Eyesizwe Coal, the local manager of global power generation company ABB Alstom Power.
He is also a nonexecutive director of Sanlam and was appointed by President Cyril Ramaphosa to help reduce government bureaucracy, particularly in removing obstacles to economic growth.
Current nonexecutive director Stephen Westwell has taken over the position with immediate effect until a successor is appointed.
“The board commends Mr Nkosi for the leadership he has provided to the board, leading to the determination of the Future Sasol strategy and its implementation,” Westwell said.
“The board of directors thanks Mr Nkosi for his dedication during his tenure as chair of the board and wishes him well for the future.”
Nkosi’s sudden resignation means he will be spared chairing the AGM on Friday, where the group’s commitment to reduce its emissions is set to be hotly debated.
Old Mutual, which holds about 3% of the group’s stock, said on Friday it will reject some of the proposals put forward by the group, including the remuneration policy and climate change report.
Old Mutual said the climate resolution rationale as presented to shareholders implies a trade-off between the achievement of the original 2030 (and 2050) commitments and the creation of shareholder value.
Stranded asset risk
“As a responsible, long-term investor we believe this is not only inaccurate but concerning, as the implied inability of the company to transition based on financial feasibility is akin to admission of the presence of substantial stranded asset risk and should be more reason to accelerate action — as opposed to a justification to delay it,” Old Mutual said.
Sasol hit out at Old Mutual’s stance, saying its recommendations are “flawed and underpinned by conjecture”.
“The majority of our investors confirmed that the board had to make a fair decision in its assessment of management’s performance in this respect, taking into account the factors which were outside their control. To date, no recognition has been given to management on the performance against this target,” Sasol said.
“We want to emphasise that Sasol is not reversing or scaling back our 2026 commitments, nor have we changed our emissions-reduction target, associated levers or strategy.”
Shareholder activism organisation Just Share two weeks ago accused Sasol of showing signs of reneging on its target to cut emissions by 30% by 2030. Robyn Hugo, director of climate change, said the management of Sasol, the single biggest emitter of carbon emissions in SA’s listed market, is not disclosing adequate details to its investors.
Sasol’s emissions, which are regarded as second only to those of Eskom, has seen it land on the wrong side of authorities.
The national air quality officer in July rejected Sasol’s request to measure the sulphur dioxide emissions from its Secunda boiler plant in an alternative manner, putting the petrochemical giant at risk of violating the country’s air quality laws and facing legal consequences.
The rejection raises questions about the sustainability of Sasol, which said in its 2022 annual report that noncompliance with the minimum emissions standards could have a “material adverse impact” on its business and lead to fines, criminal charges or being asked to cease operations.
Sasol plants have until April 2025 to comply with the Air Quality Act’s minimum emission standards, which were introduced in 2010 and modified multiple times since 2017.
Sasol has appealed against the decision.
The resignation of Nkosi, who also chaired a key board committee of nomination and governance, comes as he was leading the search for the group’s new CEO to replace Fleetwood Grobler, whose five-year term will end in 2024.
Grobler was appointed to the role in 2019 and his association with the company began as an engineering student in the early 1980s when he received a Sasol bursary before joining the group in 1984.
Old Mutual has said it will monitor Sasol’s succession planning and how it will affect its plans to cut back on carbon emissions.
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