Business / Business News

Narissa Subramoney
Copy rewriter
3 minute read
26 Oct 2021
3:51 pm

Sasol shareholders accuse energy giant of blocking climate-change resolutions

Narissa Subramoney

Just Share's Robyn Hugo likened Sasol's refusal to provide information to 'corporate lobbying against climate action, transparency and good governance'.

Sasol. Picture: Supplied

Shareholders and co-filers on climate change resolutions include Aeon Investment Management, the Raith Foundation, Old Mutual Investment Group, Sanlam Investment Managers, Just Share, ABAX and Coronation.

In 2017, Sasol denied the Raith Foundation’s request for information relating to its non-compliance with air-quality laws and plans to address the problem. Sasol said the proposal was “filed too late”.

The following year in 2018, Raith requested that Sasol prepare a yearly report on how it was assessing and ensuring long-term corporate resilience in a future low-carbon economy.

That request was denied because Sasol was of the view the submission did not “constitute matters that shareholders are entitled to exercise voting rights on“.

In 2019, Old Mutual Investment Group, Sanlam Investment Managers, ABAX, Coronation, Aeon Investment Management and Mergence Investment Managers filed three resolutions requesting disclosure of Green House Gas (GHG) emission reduction targets and how those targets are linked to executive remuneration.

Sasol refused that request because “matters raised in the resolutions filed had already been addressed” in its 2019 climate change report.

Last year, Raith and Just Share wanted information on Sasol’s strategy and targets to align its global operations with the goals of the Paris Agreement.

Sasol denied that request, saying it was not filed on time. The company further accused its shareholders of trying to “micromanage the company by seeking to impose specific methods for implementing complex policies in place of the ongoing judgements of management as overseen by the directors”.

It also argued the request would “take away the boards’ discretion to act in the best interests of the company concerning the commitment to the Paris Agreement”.

Last September, Just Share and Aeon asked for a non-binding advisory resolution relating to the disclosure of Sasol’s climate lobbying activities.

Sasol replied: “Our climate change report 2021 already complies substantially with the requirements spelt out in your resolution.”

Then, earlier in October, Just Share and Aeon repeated its request, saying significant climate lobbying activities were not addressed adequately, or at all, in Sasol’s report 2021.

Sasol said it was “unable to accede to that request”.

Secunda operations are the world’s biggest single-point source of GHG emissions

Sasol's shareholders accuse the fossil fuel giant of blocking climate change resolutions
Sasol Secunda Chemicals Operations. Picture: Twitter/@SasolSA

The emissions from Sasol’s Secunda plant exceed the individual totals of more than 100 countries.

Just Share said Sasol had been refusing shareholder-proposed resolutions for five consecutive years.

“It is clear from this history that Sasol’s refusals are not grounded in a consistent application of the law, nor in sound principles of corporate governance,” said Just Share’s climate change engagement director, Robyn Hugo.

“Rather, the company appears to have set out, in every instance, to find reasons to prevent its shareholders from having an opportunity to vote on any resolutions other than those tabled by Sasol itself,” said Hugo.

Hugo said this was contrary to South African law and contrary to the position of hundreds of other listed companies across the globe, which put shareholder-proposed resolutions on their ballots.  

“The South African Companies Act, 2008, provides, in section 65(3), that any two shareholders of a company may propose a resolution “concerning any matter in respect of which they are each entitled to exercise voting rights”, said Hugo.

Just Share said Sasol’s approach was at odds with its claim that “sound partnerships with stakeholders are critical to the success of Sasol’s decarbonisation drive, which is central to the strategy and future of the company”.

At a time of increasing global awareness of the effects of climate change, the world’s biggest polluters need to commit to an unprecedented scale and speed of change if they want to maintain credibility.

Hugo likened Sasol’s refusal to provide information to “corporate lobbying against climate action, transparency and good governance”.

“The company is asking shareholders to trust in its intentions to decarbonise, even though its earliest decarbonisation ‘milestone’ is only in 2026,” said Hugo.

She said Sasol’s “emission reduction plans are reliant on factors that are highly uncertain”, such as the availability and appropriateness of fossil gas and the commercial viability of green hydrogen.