Why is Sasol ignoring climate risk resolutions?

Energy and chemical giant Sasol is one of 100 companies responsible for 71% of the world’s industrial greenhouse gas (GHG) emissions, but is playing hardball on complying with tabling its climate change-related resolutions.

Since 1988, Sasol has consistently contributed to GHG emissions, with its Secunda plant identified as the world’s largest single point-source GHG emitter. 

Although it disclosed its emissions in annual reports, shareholders calling for it to commit to the Paris Agreement are being prevented from tabling proposed climate risk-related resolutions. 

One of these is Just Share SA, a non-profit activist shareholder. Executive director Tracey Davies explained that Sasol’s emission reduction targets were not aligned with the Paris Goals, and were flawed in addressing indirect emissions. 

Just Share and other shareholders regularly submit resolutions to keep companies in check, which Davies said ensured transparency and improved corporate governance. 

“In South African law, more than 50% of shareholders have to approve the resolution before it is binding.”

But Sasol is not playing ball, and for the third year in a row has refused to table climate change-related resolutions. 

Its reasons included that co-filers within the company were not legally entitled to table shareholder resolutions relating to climate risk, that their emissions reduction targets were on course, and that resolutions were submitted too late – the latter of which was, according to Davies, submitted 23 business days before Sasol’s annual general meeting (AGM) with another shareholder, RAITH Foundation. 

“Sasol accuses the proposing shareholders of trying to ‘micro manage’ the company, when all the resolutions ask are how the company plans to honour its commitment to reducing GHG emissions,” Davies explained. 

Sasol’s total emissions in 2019 were around 108.8 megatons of carbon dioxide (CO₂₎. 

“Climate science makes it clear that, by 2030, and in order to limit the most severe impacts of the climate crisis, global GHG emissions must be reduced by 45% from 2010 levels,” Just Share director of climate change engagement, Robyn Hugo, said. 

“Climate risk poses material financial risk to investors, and if they are not permitted to vote on requests such as those posed by our resolution, this presents a serious barrier to their ability to comprehensively assess risk and opportunity in their investment decision making,” Hugo explained. 

Other companies such as Standard Bank, FNB, Absa, Investec and Nedbank have all tabled climate risk-related shareholder resolutions at their AGMs, “without adverse legal consequence”, Davies said. 

Why is Sasol ignoring climate risk resolutions?

Large corporations around the world are being put under pressure, with mounting evidence that CO₂ emissions must reach net zero by 2050. This requires “dramatic action” in the next 10 years. 

A report by the United Nations Environment Programme warned that if GHG emissions did not fall by 7.6% every year between now and 2030, the world would have failed the Paris Agreement. If the agreement is honoured, temperatures should only increase by 1.5°C, and not by 2°C. 

But if this narrow window is missed, temperatures will soar at unprecedented rates. 

This is not all that Sasol stands to damage if it continues to throttle shareholder resolutions about climate change. 

“Sasol is an enormous emitter not only of GHGs, but of other emissions harmful to human health and wellbeing,” Davies said. 

Centre for Environmental Rights attorney Timothy Lloyd said that to meet the Paris Agreement’s goals, “Sasol Secunda shouldn’t exist by 2030”. 

The Sasol Secunda complex was the reason 17% of Mpumalanga highveld residents were admitted to hospital in 2016. 

A report compiled by Dr Andrew Gray last year revealed that 14 industrial facilities, including Sasol Synfuels’ chemical facility, caused between 305 and 650 early deaths in the area in 2016. 

Gray said that if the 14 facilities, which also include Eskom coal-fired power stations, were to comply with prescribed minimum emissions standards, deaths could be reduced by 60% in the Mpumalanga highveld area.

These facilities also exceeded the World Health Organisation’s guidelines for daily and hourly averages for all pollutants. This is especially worrying in sensitive sites, 120 of which were isolated by Gray, as these are mostly made up of schools and hospitals. About 28 of the 120 sites were found to be exposed to toxic nitrogen dioxide, the worst of which was at Camden Combined School. 

“These 14 facilities contribute alarmingly high – and relatively easily reducible – percentages of national limits,” Gray concluded. 

This means that reductions are achievable – but how willing Sasol is to reduce emissions is being questioned. 

“One of the SDGs [sustainable development goals] that Sasol says it has prioritised is ‘climate action’. For decades, climate activists have been demanding that Sasol take meaningful and urgent steps to reduce its harmful emissions.

“To date, however, the company has failed to demonstrate the necessary ambition or urgency,” Hugo said. 

Being consistently silenced has culminated in Just Share reaching out to global climate investor initiative, Climate Action 100+ (CA100+), to call on Sasol to make renewed commitments to reducing emissions. 

Just Share and other shareholders plan to ask Sasol about its consistent refusal to table climate-risk resolutions at its upcoming AGM on 20 November. 

“It may also be necessary to mount a legal challenge to Sasol’s interpretation of the Companies Act which prohibits shareholders from proposing climate-related resolutions,” Davies said. 

Without participation from GHG emitters such as Sasol, the world looks doomed to face soaring temperatures and unprecedented weather anomalies.

Sasol was approached for comment, but no responses were received at the time of publishing.

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