Nonprofit shareholder activism organisation Just Share and investment management company Aeon Investment Management on September 14 co-filed a nonbinding, advisory shareholder resolution with chemicals company Sasol, for tabling at its November 19 annual general meeting.
The resolution asks Sasol to improve and expand its disclosure of direct and indirect climate lobbying, including disclosing the yearly membership fees paid to industry associations which are involved in climate lobbying activities.
Climate lobbying shareholder resolutions have been filed yearly at fossil fuel companies in other jurisdictions for a number of years, but this is the first time such a resolution has been filed in South Africa, Just Share states.
It notes that, unlike many other jurisdictions, South Africa has no legal requirements for the disclosure of lobbying activities.
“It is crucial that South Africa urgently achieve policy alignment to support a just transition to a low-carbon, climate-resilient economy, and shareholders and other stakeholders should be made aware of any activities that interfere with climate-aligned national policy-making,” Just Share emphasises.
It explains that climate lobbying refers to any activity aimed directly or indirectly at influencing national climate policy.
Climate policy includes efforts towards achieving the goals of the Paris Agreement; reducing greenhouse-gas emissions; preparing for and adapting to current and future climate disruptions; and financing of climate change mitigation and adaptation efforts.
Despite increasing awareness of the urgency of taking climate action, the global policy response to climate risk has been weak and inadequate, states Just Share.
It posits that a key reason for government climate inaction has been “the unprecedented lobbying activity by the fossil fuel industry and associated industry associations, to weaken, delay and oppose climate-related regulation”.
In many jurisdictions, government departments are required to publicly disclose information about meetings and other engagements that they have with corporate executives and their representatives. In South Africa, there are no such disclosure requirements, Just Share says.
“Senior business executives and the representatives of industry associations of which they form a part, have access to government officials at the highest levels. But because there is no obligation on government to disclose these engagements, we can only glean snippets of information from references which make their way into the public domain,” the organisation notes.
In addition to direct lobbying on climate change, Sasol is a member of – and plays a key role in – a number of industry associations involved in climate lobbying and policy engagement, says Just Share.
It mentions for example that it is chair of the Industry Task Team on Climate Change; chair of the environmental subcommittee of Business Unity South Africa; and a board member of the Minerals Council South Africa.
These organisations have consistently and successfully lobbied against the introduction of an effective carbon tax in South Africa, the organisation claims.
It highlights that Sasol’s 2020 assessment of its alignment with industry associations does not provide enough information for its stakeholders to form an independent view of Sasol’s review process, or its findings.
“It is clear that Sasol will continue to have significant influence over climate policy in South Africa – directly and through its industry associations. Its stakeholders must have confidence that the company is using its influence to align South Africa’s climate policy with the Paris goals. As things stand, the information required to make this assessment is not publicly available.
“It is also important that investors be able to better appraise Sasol’s long-term investment proposition, and its stated commitment to Paris alignment and to a just transition.
“This resolution requests that Sasol provide its shareholders with information that will help them determine not only whether Sasol’s own climate lobbying positions and activities, and those of its industry associations, are aligned with the Paris goals, but, importantly, the circumstances in which it would discontinue membership of an association on the basis of misalignment with the Paris goals,” states Just Share.