Following chemicals company Sasol’s refusal to table South Africa’s first climate lobbying shareholder resolution, Sasol shareholders Just Share and Aeon Investment Management (Aeon) have co-filed a second nonbinding, advisory resolution ahead of Sasol’s November 19 annual general meeting.
The resolution asks Sasol to improve and expand its disclosure of its direct and indirect climate lobbying, with a focus on the climate lobbying activities of its industry associations; how it assesses whether these activities are aligned with the Paris Agreement; and the circumstances in which Sasol will terminate its membership of a relevant association on the basis of misalignment with the Paris Agreement goals.
On September 22, Sasol notified Just Share and Aeon that it had declined to table the September 14 climate lobbying resolution.
“The disclosure contained in our Climate Change Report for the year ended June 30, 2021 (CCR 2021), published on our website earlier today, already complies substantially with the requirements [set] out in your resolution and, as set out in our CCR 2021, we have committed to further enhance our disclosures taking into account, among others, the matters raised in your proposed nonbinding advisory vote.
“There is, therefore, no need for shareholders to be required to vote on the resolution as its objectives have, by and large, been met in our CCR 2021,” Sasol said at the time.
The organisations say in an October 7 statement that Sasol continues to take the approach that it can unilaterally “decline” to table shareholder resolutions, which is not supported by the country’s law.
In the legal opinion received by Just Share earlier this year, advocates Tembeka Ngcukaitobi and Chris McConnachie concluded that directors do not have a unilateral discretion to refuse to table shareholder-proposed resolutions on content-based grounds, the organisations add.
They posit that the correct approach would have been for Sasol to engage with the co-filers, explaining that some of what the resolution asks for would be covered by its forthcoming disclosure, and asking the co-filers to decide whether to withdraw the resolution as a result, or to submit a revised resolution.
“Sasol’s CCR 2021 does include more thorough climate lobbying disclosure than its 2020 Climate Change Report. There are indications that this disclosure was updated or adjusted after Sasol had received the resolution filed by Just Share and Aeon.
“However, Sasol’s 2021 disclosure omits key elements of the request in the September 14 resolution. The review is incomplete, and a number of its conclusions are not supported by independent assessments of Sasol’s climate lobbying and that of its industry associations.
“In concluding that all of the industry associations assessed are ‘aligned with Sasol’s principles’, Sasol focused on its industry associations’ public positions on climate action, rather than their climate lobbying activities,” the organisations state.
Following careful analysis of the disclosure on “engaging on climate policy: positions and industry associations” in the CCR 2021, Just Share and Aeon have, therefore, co-filed a second nonbinding, advisory resolution that seeks disclosure by Sasol of those key elements that have not been addressed – either adequately or at all – in the CCR 2021, the organisations indicate.
They add that this resolution is reinforced by an independent briefing prepared by independent think tank InfluenceMap.
Following its assessment of Sasol’s CCR 2021 disclosure, InfluenceMap concludes that “the quality of Sasol’s industry association review process still falls considerably short of investor expectations”, the organisations highlight.