Institutional investors who voiced opposition to Sasol’s 2023 climate change report in the run-up to the group’s AGM on Friday had to leave before they could vote when the meeting was shut down by the very people whose agenda might have been best served by letting things proceed as intended.
The global energy and chemicals company, SA’s biggest polluter after coal-dependent Eskom, had to cancel its AGM due to about 15 protesters from environmental activist group Extinction Rebellion, who took to the stage chanting “We want to breathe”.
Mounting pressure on Sasol from investors and civil society to start showing results in implementing its plans to cut emissions 30% by 2030 is one of the challenges newly appointed CEO Simon Baloyi inherits when he takes over the reins from Fleetwood Grobler in April 2024. Baloyi is now group executive vice-president of energy operations & technology.
Before the AGM some asset managers declared their intention to vote against a nonbinding resolution to approve Sasol’s 2023 climate change report. Activist shareholder organisation Just Share — long a vocal critic of Sasol, accusing the company of reneging on its target to cut emissions 30% by 2030 and not disclosing adequate details to investors — said it is “unfortunate” the AGM was cancelled.
“I think they were quick to cancel. These kinds of protests at fossil fuel company AGMs are becoming more common around the world.
“In some respects it is strange that Sasol has not had to deal with this before. Perhaps they saw it as an opportunity to spend some more time engaging shareholders on their votes,” said Just Share executive director Tracey Davies.
Before the interruption, Grobler started to address concern raised by key shareholders Old Mutual Investment Group and Ninety One. “I want to allay concerns: we have not moved from our 2030 and 2050 targets,” said Grobler.
Macroeconomic conditions and the outlook have changed considerably since Sasol announced its decarbonisation targets, but Grobler said disclosing the new risks facing the business due to these changes does not mean Sasol is conceding it will not meet its targets. He also said the group is progressing ahead of target on procuring 1.2GW of renewable energy to replace self-generated power from fine coal waste.
Business Day reported previously that Ninety One’s decision not to support the resolution on the climate change report was not because it does not have confidence in Sasol’s decarbonisation targets but because of “insufficient certainty on the gas component of the plan”.
Ninety One chief sustainability officer Nazmeera Moola writes in Business Day today that notwithstanding Sasol’s importance to the SA economy, it has to be held accountable for its role in reducing the country’s carbon emissions in line with globally committed targets.
Old Mutual said it would not support the resolution because it made no reference to targets (as in previous years) and did not give shareholders the opportunity “to voice discontent with progress on climate change strategy implementation”.
Sasol responded by saying that in all its engagements and correspondence with Old Mutual it consistently reiterated its commitment to the 30% reduction by 2030 and reaching net zero by 2050.
Davies said Just Share’s criticism is not necessarily focused on changes in Sasol’s climate strategy and targets. Rather, given that there are insufficient interim targets, and with emissions still increasing, it is not confident that Sasol will reach the stated targets.
This was the first time investors indicated a clear intention not to support the climate change plan, Davies said. It was a “bold and progressive move for SA institutional investors, which are traditionally very conservative and reluctant to vote against management”.
She said it is a strong indication that investors who are thinking carefully about climate change and climate risk are not satisfied with Sasol’s progress.
“This is not surprising. Sasol’s emissions have gone up in the last years, and they say they will go up again next year.
“It is incumbent on responsible investors to demonstrate that Sasol’s progress is not sufficient by voting against the resolution ... We were very much looking forward to seeing the outcome of that vote,” she said.
In its 2023 climate change report, Sasol said emissions from its chemicals and energy business increased “marginally”, eroding emission reductions relative to 2022, but they were still about 5% lower than the 2017 baseline.
The interim target is to achieve a 5% decrease in scope 1 and 2 emissions by 2026 before cutting these 30%, and scope 3 emissions 20% by 2030.
One of the protesters at Friday’s cancelled AGM, Malik Dasoo, an organiser for the Gauteng branch of Extinction Rebellion, said the organisations want to see Sasol make real commitments to “address climate breakdown ... This means making real sacrifices and stopping operations.”
Sasol chair Stephen Westwell said that once it became clear the protesters would not accommodate the effective participation of other shareholders “cancelling the meeting became the only prudent option”.
Correction: November 20 2023
Malik Dasoo does work for the African Climate Foundation, but his involvement with Extinction Rebellion is not related to this and he volunteers for Extinction Rebellion in his private time. His presence at the Sasol AGM was only in his capacity as an activist with Extinction Rebellion.
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