Monday, January 24

Climate battle heats up as Sasol rejects Aeon’s and Just Share’s resolve


The battle over Sasol’s handling of climate change escalated somewhat after the group rejected a climate lobbying resolution tabled by two of its shareholders.

Aeon Investment Management and the nonprofit shareholder activism organization Just Share this month jointly filed the resolution with Sasol.

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Sasol spokesman Alex Anderson confirmed that the company received the resolution but rejected it. Anderson said the disclosure in Sasol’s climate change report for the year ended June 2021, which the company released after receiving the resolution, largely met the resolution’s requirements.

Aeon and Just Share jointly filed the resolution on September 14, while Sasol’s climate change report is dated September 20. In that report, Sasol pledged to improve its disclosures by considering, among others, the issues raised in the proposed non-binding advisory vote, Anderson added.

“Therefore, there is no need for shareholders to vote on the resolution, as Sasol has met its targets, overall, in the climate change report for 2021,” he said.

‘Extremely disappointing’

Aeon’s CIO, Asief Mohamed, said it was “extremely disappointing” that Sasol’s board rejected a legal request from its shareholders.

‘The non-binding lobbying resolution should be seen in the context of companies and trade associations actively delaying and preventing the introduction of carbon taxes and associated environmental protection legislation.

Lobbying is also evident in lobbying against transformation by well-paid lackeys of trade associations with the aim of curbing efforts for a more equal society based on gender and race. In its rejection of this non-binding resolution, the Sasol board shows that it does not support the resolution’s goal of reducing the risks of climate change, risks to food security and inequality, ”he added.

Mohamed said that from an investment perspective, if South Africa and the world did not resolve climate risks, the world would be in a worse place.

Just Share CEO Tracey Davies said Sasol sent a letter to Just Share and Aeon the day he released his 2021 climate change report.

“Just Share and Aeon revised Sasol’s lobbying disclosure from 2021, which is an improvement over its 2020 disclosure,” Davies said.

But he said Sasol’s disclosure in his latest report missed key elements of the resolution. For example, Sasol deals exclusively with the climate change positions of the industry associations of which he is a member.

She said these associations often say one thing in public, but push for something else behind closed doors. However, Sasol did not reveal anything about those commitments, Davies said.

Sasol representatives hold key positions in trade associations, which have members facing the challenges of climate change.

Sasol’s Lead Climate Change Specialist Shailendra Rajkumar is Chair of the Industry Task Force on Climate Change. Sasol’s vice president for climate change, Shamini Harrington, is the chair of the Business Unity South Africa subcommittee on the environment. Additionally, Sasol Mining MD Lucky Kgatle is a board member of the South African Minerals Council.

Davies said Sasol illegally continued to unilaterally “decline” to file shareholder resolutions.

“In the legal opinion received by Just Share this year, advocates for Tembeka Ngcukaitobi SC and Chris McConnachie concluded that the directors do not have a unilateral discretion to refuse to submit shareholder-proposed resolutions,” he said.

The resolution submission comes before Sasol’s Annual General Meeting (AGM) on November 19. Anderson said Sasol will issue its AGM notice on October 18.

Aeon held nearly 1.7 million Sasol shares, worth R420 million at the close of Thursday, on behalf of its clients as of Sept. 20, Aeon’s research analyst Tinyiko Mabunda said. Just Share spokeswoman Annette Gibbs said the organization owned some shares in Sasol.

Gibbs said Sasol’s latest resolution was his third collaboration with Aeon on the AGM climate change resolutions. Earlier this year, they filed a resolution with Standard Bank. In 2019, they collaborated on an AGM resolution submitted to Sasol.

Request better disclosure

In the resolution, Aeon and Just Share asked Sasol to improve and expand its direct and indirect disclosure on climate lobbying in its reports, including disclosure of annual membership dues paid to industry associations involved in climate lobbying.

The resolution states that the two shareholders want to assess whether the climate-related lobbying by Sasol and its associations was consistent with Sasol’s stated support for the Paris agreement and the transition to a low-carbon economy.

Mohamed de Aeon said the fund manager knew that corporations like Sasol paid a lot of fees to trade associations, which used that money to pressure governments and state officials.

In the US, Sasol must disclose funds spent on lobbying. OpenSecrets calculated, based on data from the US Senate Public Records Office, that Sasol spent more than $ 2 million (R30 million) on lobbying from 2016 to 2019, according to Just Share. In response, Sasol’s Anderson said the group did not have the OpenSecrets document, so they could not verify their calculations.

Just Share said shareholders had filed climate lobbying resolutions with fossil fuel companies in other jurisdictions for many years, but this was the first South African resolution.

“Unlike many other jurisdictions, South Africa has no legal requirements to disclose lobbying,” Just Share said. However, the organization said transparency about lobbying is key to fighting corruption.

Mohamed said Sasol indicated to Aeon that he would present a climate disclosure resolution at his last AGM. Aeon and Just Share submitted a disclosure resolution on climate change in 2019, but Sasol rejected it, he added.

Sasol’s Anderson said the group announced in 2020 that it would include a non-binding advisory vote in its 2021 AGM notice. That resolution will allow shareholders to vote on Sasol’s approach to climate change.


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