Sasol’s climate action plan gets the nod from most shareholders Ray Mahlaka
The massive polluter faced heavy criticism from activist groups for moving far too slowly. By
Sasol has again come under intense criticism from activist groups and shareholders for its climate change action plan being too vague and not targeted enough for the chemicals giant to reduce emissions at its operations in the next few years.
Sasol is one of the world leaders in technology for converting natural gas and coal to synthetic fuels and chemicals. However, its adoption of technology has come with major risks as its coal-to-fuels and chemicals plant in Secunda, Mpumalanga, is the single largest source of greenhouse gas emissions in the world.
Sasol’s climate and decarbonisation targets include reducing its scope 1 and 2 emissions by 30% by 2030, and reaching net zero for scope 1, 2 and some scope 3 emissions by 2050.
Scope 1 emissions are directly generated by a company through its operations; scope 2 emissions are racked up by a company’s purchases such as electricity, heat and cooling from a power utility or municipal source; and scope 3 emissions are indirect as they come from a company’s value or supply chain operations.
But activist organisations have trashed Sasol for failing to take adequate steps to implement its decarbonisation plan with speed, and deferring its implementation until at least 2026.
Failure to move fast, they have warned, would result in enormous financial risk to the company and further health risks, especially to the Secunda community.
According to a Bloomberg article published in March 2020, the high emissions generated by Sasol are causing respiratory diseases in residents living nearby.
During an annual general meeting on 2 December, Sasol’s board and executive management faced off with activists, who pointed out deficiencies in the company’s climate change action plan.
The issue of climate change dominated the heated meeting.
Just Share, a shareholder activist group, argued that Sasol’s decarbonisation commitments and strategy failed to provide adequate details or a feasible and measurable plan that will enable Sasol to achieve its emission reduction targets.
Sasol group CEO Fleetwood Grobler responded to the criticism, saying Sasol was making significant progress towards meeting its decarbonisation targets and that the company was spending a lot of money to have its plan realised.
Grobler admitted that Sasol may not be moving fast enough with its climate change objectives. “I recognise there is impatience that we are not moving faster. Critics go so far as to accuse us of greenwashing, as if we are not serious about decarbonisation.
“Let me be clear as I can be: Sasol does not doubt that it needs to decarbonise and transform its business model. We see tremendous opportunities for Sasol in this transition.”
Grobler said Sasol had to “self-fund decarbonisation and future low-carbon business activities from current profit pools”.
A starting point would be for Sasol to embrace renewable energy sources. But doing so should not have a negative impact on Sasol’s profits or earnings.
Sasol had already agreed to terms to secure 600MW of renewable power, which will start coming online by 2025. By 2030, it wants to have its operations supplied with 1,200MW of renewables (mainly hydrogen energy), which will bring it close to meeting its total energy needs of about 1,500MW.
Sasol is one of the main participants in the large-scale green hydrogen developments in South Africa, and the company plans to produce hydrogen energy at its operations, especially at its Sasolburg plant in the Free State, by next year.
Despite Sasol being criticised by activist groups and shareholders, the company’s climate change plan was passed for a second year in a row during the meeting, with about 94% of shareholders voting in favour of it and about 6% against.
Let me be clear: Sasol does not doubt that it needs to decarbonise
and transform its business model. We see tremendous opportunities for the company in this
transition