Sasol is perplexed by Old Mutual’s indication and recommendation to other shareholders to vote against our Remuneration Report, Climate Change Report and the re-election of director Muriel Dube. We consider the motivation advanced by Old Mutual for this recommendation to be flawed and underpinned by conjecture.
 
Old Mutual appears to have placed significant reliance on the Just Share report without proper consideration and/or recognition of any of Sasol’s recent disclosures and assertions made in response, which point to factual inaccuracies contained in Just Share’s report. The willingness of Old Mutual to take such a decision premised on inaccurate and, to some extent, misleading information that could have been verified, is most concerning.
 
Sasol has, in recent months, been engaging several stakeholders across the board, including Old Mutual, on our sustainability disclosures related to Climate Change. In all engagements and correspondence, we have consistently reiterated our commitment to our 30% reduction and decarbonisation levers, while advancing progress against this commitment with tangible initiatives. The information set out in our Notice of Annual General Meeting makes it clear that we have made no change to Sasol’s climate ambition and strategy.
 
Sasol set its initial GHG reduction target in 2019 of 10% reduction by 2030 (on scope 1 and 2 emissions of a 2017 baseline), which was increased to 30% reduction in response to the need to do more to meet the Paris Agreement goals in 2021. To state that Sasol’s 2023 Climate Change Report (and resolution) does not include our targets is factually incorrect as pages 3-5 of this Report detail our targets, milestones, ambition, as well as actions and reduction levers.
 
Further, it is unfounded to state that our ‘climate targets have slipped’ given that our first major milestone is set to be achieved three years from now. This includes a 5% reduction of greenhouse gases (GHG’s) by 2026 for the Energy Business in SA. In FY23, the Sasol Energy Business achieved a ~4% reduction relative to 2017 (contributing towards the total Sasol group reduction). Our first tranche of renewable energy will be online by Q1 CY24, namely the Msenge wind farm in the Eastern Cape, to enable green hydrogen commercialisation in Sasolburg.
 
Sasol has constantly communicated that it is not in a position to follow a smooth year-on-year emission-reduction trajectory, as is done with most climate models, because our operations are highly integrated with long lead times needed to integrate capital-intensive emission-reduction projects. This has been communicated consistently since inception of our GHG reduction targets.
 
Sasol, as a responsible corporate citizen, is committed to transparent disclosures based on the TCFD (Task Force for Climate-related Financial Disclosures), is required to disclose potential risks and opportunities related to our energy transition. Accordingly, we have disclosed the key risks, outside of our locus of control, that may impact Sasol’s transition journey, including a stable and reliable electricity grid, renewable energy grid allocation by the South African Government, delays in regulatory approvals for renewable projects, macro-economic factors (e.g. oil price) and pricing of LNG, amongst others. It is puzzling that Old Mutual would view the disclosure of these risk factors as Sasol conceding to not meeting targets.
 
And lastly, regarding climate change targets in our incentive plans, Sasol has reported extensively on the inclusion of climate change (and other ESG as well as financial targets), in our remuneration report.
 
Climate related targets have consistently been included in the short-term and long-term incentive plans since 2020. Even Sasol’s 2022 Remuneration Report stated that mainly due to factors outside of management’s control, the delivery of 200MW of renewable energy by 30 November 2023, will be challenged by Eskom grid constraints, alignment with the government’s 5th bidding window and NERSA regulatory approvals. 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 of their control. To date, no recognition has been given to management on the performance against this target and a zero out of 25% was reported in the remuneration report.
 
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.
 
We also believe it is incorrect to assert that one independent non-executive director, by virtue of chairing a committee that supports the Board in overseeing the company’s focus on its decarbonisation pathway, is, by that fact alone, ultimately accountable for climate change. The Sasol Board in its entirety is accountable for climate change as a material matter affecting the Company.
 
Institutional investors often follow the AGM voting recommendations of proxy advisory companies. Sasol has received and considered a report from Institutional Shareholder Services Inc. (ISS), the most influential proxy advisory service among investors in the United States with approximately 20% referring to ISS’s guidance. ISS recommends a vote in favour of all Sasol resolutions being proposed at the General Meeting as well as at the AGM.