Sa­sol re­jects share­holder bid

IN­VESTORS: DIS­CLO­SURE ON EMIS­SIONS STRAT­EGY

The Citizen (Gauteng) - - FRONT PAGE - Patrick Cairns

Com­pany says it will re­lease a de­tailed cli­mate change re­port in 2020. Money­web

Over the past few years, Sa­sol has been un­der grow­ing scru­tiny for its ap­proach to the risks posed to its op­er­a­tions by cli­mate change. Ma­jor share­hold­ers have been frus­trated by the com­pany’s un­will­ing­ness to pro­vide clear dis­clo­sures and mit­i­ga­tion strate­gies.

This is a par­tic­u­larly sig­nif­i­cant is­sue for Sa­sol, be­cause it is the sec­ond-largest emit­ter of green­house gases (GHG) in South Africa af­ter Eskom. The tran­si­tion to a low car­bon econ­omy, in which emis­sions have to be re­duced and car­bon will be taxed, will have po­ten­tially ma­jor im­pacts on its prof­itabil­ity.

Share­holder frus­tra­tions with the com­pany’s muted re­sponse to th­ese risks reached a new level of ex­pres­sion last month when six lo­cal as­set man­agers – Corona­tion Fund Man­agers, Old Mu­tual In­vest­ment Group, San­lam In­vest­ment Man­agers, Abax In­vest­ments, Aeon In­vest­ment Man­age­ment and Mer­gence In­vest­ment Man­agers – came to­gether to file a joint share­holder res­o­lu­tion for con­sid­er­a­tion at its up­com­ing AGM. The pro­posal asked that Sa­sol re­port on how its GHG emis­sions strat­egy aligns with the goals of the Paris Agree­ment.

The com­pany has, how­ever, re­jected the res­o­lu­tion. Shamini Har­ring­ton, vice-pres­i­dent: cli­mate change at Sa­sol, said this was be­cause the com­pany has al­ready com­mit­ted to do­ing what it re­quests. “We have said in our cli­mate change re­port that we will come out with [a] de­tailed sce­nario anal­y­sis align­ing with the Paris Agree­ment in 2020,” she said.

Re­peat re­quest

This is the sec­ond con­sec­u­tive year in which Sa­sol has re­jected a share­holder res­o­lu­tion ask­ing for more dis­clo­sure on its cli­mate change mit­i­ga­tion strat­egy. Last year, the re­quest came from the Raith Foun­da­tion and share­holder ac­tivist Theo Botha. It was re­jected on the ba­sis that Sa­sol was go­ing to pro­vide the in­for­ma­tion they were ask­ing for in its 2019 cli­mate change re­port.

That re­port was re­leased along with its an­nual re­sults last month, and while it was an im­por­tant step for­ward, it did not en­tirely meet share­hold­ers’ ex­pec­ta­tions. Specif­i­cally, Sa­sol was not ex­plicit about how its plans and tar­gets aligned with the Paris goals of keep­ing global tem­per­a­ture in­creases be­low 2ºC from pre-in­dus­trial lev­els. The com­pany did note it would be pub­lish­ing an emis­sions roadmap next year, but the only clear emis­sions tar­get it set was to re­duce GHG emis­sions from its South African op­er­a­tions by at least 10% by 2030.

“Specif­i­cally, our con­cern is that Sa­sol has not made clear whether the types of dis­clo­sures that will be made in the Novem­ber 2020 roadmap will be aligned to the Paris Agree­ment, nor how they will be linked to short- and long-term ex­ec­u­tive re­mu­ner­a­tion,” said Jon Dun­can, head of re­spon­si­ble in­vest­ment at the Old

Mu­tual In­vest­ment Group.

Sa­sol’s con­tin­ued re­sis­tance ... is re­gret­table

‘Re­gret­table’

The de­ci­sion not to ta­ble the res­o­lu­tion at the AGM has there­fore been met with dis­ap­point­ment. Share­holder ac­tivism group Just Share, which sup­ported the draft­ing of both res­o­lu­tions, ex­pressed what many share­hold­ers are feel­ing:

“Sa­sol’s con­tin­ued re­sis­tance to share­holder at­tempts to hold it ac­count­able via the tabling of share­holder res­o­lu­tions is re­gret­table, es­pe­cially from a board look­ing to re­store trust,” it said.

It is un­clear what Sa­sol would stand to lose by al­low­ing the res­o­lu­tion to be tabled. Not do­ing so not only risks mak­ing the com­pany ap­pear ob­struc­tion­ist, but also po­ten­tially raises ques­tions about its cor­po­rate gov­er­nance.

Pic­ture: Money­web

QUES­TION­ABLE. By not al­low­ing the res­o­lu­tion to be tabled, Sa­sol runs the risk of ap­pear­ing ob­struc­tion­ist.

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