With a debt already close to 70% of its GDP, the IMF projects that Kenya plans to borrow $12.4bn from foreign sources by June 2022. This, at ... a time when the country is at a high risk of debt distress and subject to zero limits on non-concessional borrowing. But the distress is also having a cause and effect on its population.
On 12 October, the company rejected a non-binding resolution from Just Share and Aeon Investment Management, which sought disclosure about “significant climate lobbying activities not addressed adequately, or at all” in Sasol’s 2021 Climate Change Report 2021. Sasol has refused to table a series of climate-change motions from investors over the past five years.
“Sasol’s refusals are not grounded in a consistent application of the law, nor in sound principles of corporate governance,” says Robyn Hugo, director of climate change engagement at Just Share. The company reached its decision “unilaterally, preventing its shareholders from giving their own view on whether these matters have been adequately addressed,” he adds. Sasol “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.”
The refusals are contrary to South African law, while globally, many fossil-fuel companies put shareholder-proposed resolutions on their ballots every year, Hugo says.
- Sasol is holding its annual general meeting as a virtual event on 19 November.
- According to figures from Climate Action, Sasol’s 2019 emissions exceed those of the whole of Kenya (17.3m tonnes) and Sweden (42.77m tonnes) combined.
- Sasol says its largest amount of emissions originates from its coal-to-liquids facility in Secunda. The company aims to increase its renewable-energy procurement drive for Secunda to 1,200MW by 2030. Overall, Sasol is aiming for net-zero emissions by 2050.
The company’s climate-change report in September dealt “substantially” with the issues raised in an earlier version of the resolution, the company said in a letter sent to Aeon and JustShare and seen by The Africa Report. Sasol therefore has “difficulty understanding” why a further motion was therefore filed.
Sasol has made “good progress” with France’s Air Liquide to jointly procure 900MW of renewable energy for Secunda out of the total 1,200MW target, CEO Fleetwood Grobler wrote in the climate report. The company said it would consider the latest request to enhance disclosures in the 2022 version of its climate-change report but added that shareholders should not be “burdened with the micromanagement” of any matter affecting the company.
Legal opinion provided by Just Share suggests that decision is for shareholders themselves to take.
- Corporate directors “do not have a unilateral discretion to refuse to table shareholder-proposed resolutions on content-based grounds,” according to lawyers Tembeka Ngcukaitobi and Chris McConnachie.
- “If there are disagreements over the validity of a resolution, those disagreements should arguably be aired at the shareholders’ meeting and put to a vote. At the very least, directors should go to court to seek an order blocking the resolutions.”
- There are no grounds for dismissing resolutions as “micromanagement”, according to the legal advice. Climate change is “a serious human rights issue, which poses particularly severe risks to South Africa’s ability to develop in a sustainable and inclusive manner.”
- In May, the lawyers note, Standard Bank conceded that shareholders are in fact entitled to file non-binding resolutions on climate-related matters, after previously blocking them.
Sasol is likely to keep facing pressure until it allows shareholders to debate directly its climate-change strategy.
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