Petrochemicals giant Sasol’s blueprint for cutting emissions may have got the nod from shareholders at its AGM, but the big drop in support for its climate change plans is being seen as an expression of no confidence in its ability to meet its emissions targets.
The 77.36% of the votes in favour on Friday is down sharply from the 94.05% the plan received at the 2022 AGM, with institutional investors Old Mutual and Ninety One carrying through their stated opposition to the plans, tabled in the form of a nonbinding resolution.
The company took the precaution of avoiding a repeat of the fiasco of November last year when climate protesters stormed the stage and forced the meeting to be abandoned. This time the AGM was held electronically, a move Sasol defended as enabling “all members of the company to make a contribution”.
Ahead of the meeting, Old Mutual and Ninety One had indicated they would not support Sasol’s nonbinding advisory resolution on climate change as it had shown no progress from a year earlier.
Old Mutual said it was against the resolution as the group’s climate change targets had “slipped”. Ninety One said its confidence had fallen from a year earlier given the uncertainty of Sasol’s gas plan.
Ninety One also said it was sceptical that the group’s management team in 2030 will choose to sacrifice output for climate considerations, and it therefore did not see that “as a viable fallback plan”.
Asked for comment, Nazmeera Moola, the chief sustainability officer at Ninety One, said this week that after discussions with Sasol in recent months, “we are increasingly comfortable with the company’s commitment and investment behind its gas strategy. We have not made any changes to our voting plans.”
Sasol’s climate report said the group is committed to reducing 30% of greenhouse gas emissions (GHG) by 2030 and achieving net zero by 2050, a target it announced in 2021.
The company envisages a net-zero, fossil fuel-free operation using significant quantities of green hydrogen, renewable energy and sustainable carbon, while producing sustainable aviation fuels and chemicals for global and local markets.
Sasol — which emits about 60Mt of GHG, or 12% of the country’s emissions, a year — had been on a drive to persuade shareholders to vote in favour of the report and had written an open letter to shareholders explaining the merits of its 2023 climate report.
Tracey Davies, executive director of activist shareholder group Just Share, said the 77% vote was a strong expression of discontent among shareholders.
“What this result says to me is that the campaign was not successful in changing shareholders’ minds because after the AGM was challenged last year, Sasol wrote to some shareholders saying that excluding abstentions, 80% of shareholders were going to vote in favour of the resolution. They only got 77% support. It is fair to say 23% shareholders not endorsing your plan is a significant body of shareholders expressing discontent with your progress. It is also a big drop from last year; it shows there is a significant number of shareholders who don’t have confidence in Sasol’s current plan,” she said.
Explaining the switch to a virtual meeting this time, Vuyo Kahla, Sasol’s executive director and executive vice-president for strategy, sustainability and integrated services, said: “We put in measures that would enable all members of the company to make their contribution, and we believe this electronic measure enabled us to meet that objective.”
What this result says to me is that the campaign was not successful in changing shareholders’ minds because after the AGM was challenged last year, Sasol wrote to some shareholders saying that excluding abstentions, 80% of shareholders were going to vote in favour of the resolution. They only got 77% support
— Tracey Davies, executive director of activist shareholder group Just Share
CEO Fleetwood Grobler told the AGM that there is no retreat from Sasol’s climate goals, and the group’s 2030 roadmap indicates key interventions that the company is making progress on.
“We are actively tracking and incorporating some of the key global macroeconomic changes from the past few months that will impact on our journey. We have been transparent and kept you informed of the risks and opportunities we foresee, and we will continue to do so … Disclosure of these risk factors should not be seen as Sasol conceding to not meeting targets, but rather the opposite,” he said.
He added: “There is no silver bullet to climate change, and this journey we are on requires us to be open in an effort to find solutions across an ecosystem. We have made steady progress on our emissions reduction roadmap that support achieving our 2030 targets. Our 2030 levers are unchanged: integration of renewable energy and process efficiency across our operations, and transitioning away from coal as a feedstock,” he said.
He said Sasol has concluded several independent power producing agreements of 600MW at its Secunda plant, representing 50% of its 1,200MW commitment by 2030.
Meanwhile, Extinction Rebellion co-ordinator Malik Dasoo, who was among the protesters at last year’s AGM, told Business Times the group is not convinced about Sasol’s commitment to its emissions targets.
“We will see what happens and what they do. If the last 20 years is anything to go by … they have not met a single one of their emissions reduction targets. These are targets that they set themselves. From that perspective I am not convinced they will do anything differently.”
“I don’t have confidence in their management at the moment, we have not seen anything from them that gives us confidence this management will carry the group forward to do what is needed to meet the requirements of climate change. We don’t see the appointment of a new CEO as meeting the needs of the communities.”
Simon Baloyi will take over as CEO in April.
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