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Sasol scores ‘own goal’ as climate pressure mounts in SA

Company could face legal challenges if it continues to refuse votes on the issue.

Sasol, South Africa’s second-biggest polluter, angered some of its investors by refusing to put a resolution on its response to climate change to shareholders and could face legal challenges if it continues to refuse votes on the issue.

Sasol dismissed a request by some investors, including Old Mutual Investment Group, to table the resolution that demanded more clarity on its greenhouse-gas emissions and reduction targets, at its annual general meeting on November 27. That contrasts with Standard Bank Group and FirstRand, which have become the first South African companies to allow climate-risk resolutions to be voted on by shareholders.

Sasol’s decision comes as pressure builds on South African companies to act on climate change in a country that depends on coal for most of its power. South Africa’s greenhouse-gas emissions match those of the UK, which has an economy eight times bigger.

Sasol dismissed the request citing legal advice that it said found it wasn’t obliged to put climate-risk matters to shareholders. It gave no details on the legal opinion. “Ongoing, robust” engagement is a more effective way of understanding shareholder concerns, Sasol said in response to questions on Friday.

‘Own Goal’

At the meeting, the company did commit to producing a “road map” on its climate risk mitigation strategy in 2020. It produced its first climate change report earlier this year. Sasol said that as a “significant first step.”

“They scored an own goal,” said Asief Mahomed, chief investment officer of Aeon Investment Management, which backed the resolution along with Old Mutual and four other fund management companies. “We are exceptionally disappointed with the way they handled the process.”

Sasol, which emissions data show is the country’s second-biggest polluter after Eskom, spurned a similar move last year and investors say they will keep pushing the company for more clarity as environment, social and governance concerns became increasingly prominent in investment decisions.

The right of companies to block resolutions on climate matters “is not tested in court,” said Jon Duncan, head of responsible investment at Old Mutual Investment. “It will need to be contested at some point.”

JSE Ltd, which owns the stock exchange where Sasol has its primary listing in Johannesburg, declined to comment.

Difficult Position

Old Mutual will continue to engage Sasol on the issue in coming months, Duncan said. Companies that backed the resolution were Aeon, Sanlam Investment Managers, Abax Investments, Coronation Fund Managers and Mergence Investment Managers.

“We certainly felt there was an opportunity for them to test the waters for their shareholders,” he said. “Sasol are in a very very difficult position.”

The company produces chemicals and fuel, mostly from coal, and is already under pressure from investors after a chemical project in the US doubled in cost to almost $13 billion, resulting in the resignation of its co-chief executive officers.

At the AGM, new CEO Fleetwood Grobler and chairman Mandla Gantsho said the pace at which it could reduce greenhouse-gas emissions needed to be balanced with the need not to worsen inequality and unemployment in South Africa.

“It is important to ensure that our activities to reduce greenhouse gas emissions do not exacerbate our current national circumstances,” Sasol said.

While the company employs 31,000 people, it also produces 14% of South Africa’s greenhouse gas as well other pollutants such as sulfur dioxide that affect communities near its plants.

© 2019 Bloomberg

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How do one test these climate matters in court? The whole ‘global warming caused by man’ story is a theory. You can’t go to court and base your case on a ‘theory’.

So years of scientific research, backed up by mountains of verifiable data, done by people much smarter than you and I, is in your opinion all one big conspiracy theory. This is the sad reality of what happens in a world where the facts no longer matter.

Ag, Wanadoo, better leave those ultra conservative, Trump supporting delusional, early Alzheimer “Victims” blogging from their old age homes or asylums at Klaaskopfontein or Orania.
Responding cuts down their down their time and data for browsing on Breitbart.

There have and always will be cycles in everything from business to nature. The world has constantly moved between warming and cooling cycles. Since the last ice age we have begun a warming cycle naturally, yes human activity is accelerating the warming but the warming is inevitable. South africa being a developing nation with the cheapest source of energy being our own coal deposits, we are economically forced to use this to satiate our energy needs until other more viable and sustainable Technologies can be developed.
I understand the importance of curbing Sasols pollution but doing it at the expense of the company is irresponsible as Sasol is critical to this country’s national security in the event of war in the middle east and we are deprived of oil.

Wrong!

By public lynching! “Climate change” is a religious ideology!

and climate change “denialists” will be burnt at the stake.

you are spot on!

It was also a “theory” that shaped the mathematical models that put man on the moon. It’s called the theory of gravity. If you do not think that scientific theory equals truth, then I urge you to drop a brick on your foot from a height of 2 meters, and feel the truth of the theory.

The reason why scientific truth is referred to as a theory, is that science is willing to adapt and revise it’s theory in the face of new evidence.

If there’s new evidence to indicate that we had not in fact evolved, the theory of evolution (which is view as a truth by anyone with a basic understanding of the natural sciences) then the new reality will be heralded as a truth.

Do not confuse the semantics of scientific lingo with an incorrect interpretation of what constitutes a theory versus truth. It simply points to your own ignorance of scientific understanding, and leads to rubbish claims that climate change theory is simply a theory, and therefor cannot hold to a logical argument held in a court of law.

Blindly placing your faith in “science” and “scientific research” is a dangerous thing to do.

@Sashen.gounden, You are hopelessly behind with developments in the energy sector. Renewables have become cheaper than coal, especially for SA, where we have some of the best solar radiation resources in the world.
Feel free to read my lengthy posts on prices of electricity from different sources below, the article :
http://www.moneyweb.co.za/news/africa/the-transition-from-fossils-to-renewables-and-its-impact-on-consumer-prices/#
and click on the several links.
Read :www.energyglobal.com/solar/12082019/portugal-awards-worlds-lowest-cost-solar-pv-contract/

and :www.forbes.com/sites/jeffmcmahon/2019/07/01/new-solar–battery-price-crushes-fossil-fuels-buries-nuclear/#75abaaae5971

@marcan You are 100% correct if we were talking about Eskom. Electric generation from renewables is becoming cheaper than fossil fuels especially when cost of pollution is taken into account. But here we are talking about Sasol and liquid fuels, electricity is not a direct substitute for liquid fuel. No matter how advanced or how electrified an economy is, it still depends on crude oil products. It’s why the USA still fights for oil, its critical and always will be. Sasol protects against our dependence on crude at the expense of our air quality. Whether this expense is justified or not, time will tell.

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