Sasol Climate Change Report 2022 - Book - Page 10
RISKS AND OPPORTUNITIES
OUR FUTURE SASOL STRATEGY
GOVERNANCE
RESPONDING TO STAKEHOLDERS ISSUES
Employees and
sed labour
organi
s
ADDITIONAL DETAIL ON OUR 2030 AND 2050 EMISSION REDUCTION ROADMAP
• specific accountability
mechanisms, including
short- and mediumterm decarbonisation
milestones;
• our climate-related
capital expenditure
plans;
• our policy advocacy
activities;
• methane emissions
from Mozambique; and
• processes for
consulting
communities and
workers on the
emission-reduction
roadmap.
B
• our roadmaps, how
mitigation levers
will be executed,
their feasibility and
implementation
progress;
u
ve sin
nt ess
ur /jo
e ( int
JV)
Response
This year, we are providing further clarity, within the constraints
of continued uncertainties on technology developments and
global and local policy changes.
Organise
d
and in busin
dus
try ess
l ie r
This year, we have endeavoured to respond to issues that have been raised by key stakeholders (shown alongside).
Further information has
been requested on:
CREATING
SHARED
VALUE
Su p p
Consequently, there will always be diverging views on the nature, scale and timing of our climate-related risks. For stakeholders to make
an informed assessment of our climate risks and responses, it is critical that information is disclosed. We are committed to promoting
transparency and accountability and encourage stakeholders to continue sharing their views on both our disclosure and performance.
is projected at ~ R25 – R35 billion cumulative total capital up
to 2030, inclusive of maintaining current gas feedstock and
roadmap costs, which is also dependent on the type of gas
partnership construct implemented. Further disclosure on
our capital allocation approach is provided on page 36.
• 2030 and 2050 emission-reduction roadmap: an update
on our progress in developing and accelerating various
• Climate policy advocacy activities: an updated review of our
projects in each of our major reduction levers, including
climate policy advocacy activities is provided on pages 49 – 51.
renewable energy, gas, green hydrogen and CCUS is provided
A detailed annual inventory of our membership to climateon pages 23 – 28 and a further review of the resilience of
related industry bodies, including an assessment of their
our portfolio is on pages 16 – 19. Given the highly dynamic
alignment with our responsible climate-related advocacy
policy and technology landscape, we have intentionally not
principles, is available in our Climate Advocacy and Policy
yet committed ourselves to a specific 2050 pathway to avoid
Supplement CAPS , with a summary provided on pages 49 – 55.
potential regret capital spend, infrastructure lock-in and
We believe over the years we have had a positive impact when
stranded assets. We believe a more agile approach is the
engaging with associations in supporting climate-related
most prudent. This provides an ability to swiftly integrate
policy and regulatory developments, including advocating
emerging technologies as they become cost-effective.
in South Africa for an aligned carbon budget/tax system and
Sasol’s preferred pathway is to be fossil-fuel-free, producing
a climate change act, lifting the renewable energy licence
zero scope 1 and 2 emissions. This might not be possible by
threshold, developing a green hydrogen strategy and related
2050 and in this case we have developed other pathways,
incentives and introducing mandatory reporting of GHG
including the least preferred route of turndown to achieve
emissions.
a net zero emissions ambition by 2050.
• Methane emissions from Mozambique: we undertook
• Short- and medium-term milestones: key milestones are
a review and identified additional sources of methane.
presented in the 2030 and 2050 roadmaps (see page 4).
A baseline measurement approach has been developed
As we progress our journey, further clarity on technology
and emissions have been added to our inventory. Details of
choices will be presented, at which point we will be in a
position to make firmer commitments on the milestones
these emissions, representing ~1% of total GHG emissions,
we intend meeting for the period 2030 to 2050. Importantly,
are presented on page 11.
year-on-year reductions are not possible for Sasol, with
• Effecting a just transition: Sasol is committed to
reductions anticipated in a step-wise fashion as large capital
decarbonisation in a just and equitable manner; our shared
projects come online.
value proposition comprises an inclusive transformation
• Climate-related capital expenditure: Sasol has committed
of our business, people and society. The manner in which
R15 – 25 billion cumulative capital expenditure to be spent
we will be approaching consultation with affected workers
by 2030 on our 30% reduction target. We plan to sequence
and communities will be people-centred. Work on our just
this expenditure over time and still remain within the Sasol
transition activities, roadmap development and recently
2.0 transformation programme R20 – 25 billion/a capital
established Just Transition Office (JTO) is provided on
expenditure target by 2025 for Maintain and Transform
pages 38 – 40.
capital. Total sustainability capital expenditure (10 - 15%)
SASOL CLIMATE CHANGE REPORT 2022
ers
tom
Cus
Each solution inevitably involves trade-offs, some more significant and difficult to resolve than others, often with competing
stakeholder interests needing to be balanced. Additionally, there are also significant uncertainties relating to the nature and
timing of key developments in technology, policy, carbon pricing and macro-economics, all of which have an impact on climate risk
and response measures.
Sh
pro areh
vid ol
ers de
of rs
ca
d
an ital
p
ia
ed
M
Climate change management is an inherently complex issue, with multiple interdependencies. Every potential
solution we pursue is likely to have an impact on other social, environmental and economic challenges.
Issue
DATA AND ASSURANCE
G
a n o vern
dr
m
e g u e n ts
la t o r
s
INTRODUCTION
9
N o ng o ve r n m e n t al
organ
isations (NGOs)
s
ti e s
ni tie
m u ci e
m
o
o
C
ds
an
Our stakeholders
We take into account
issues raised by
our stakeholders
to identify areas
pertinent to delivering
our strategy.
For further detail refer
to IR pages 28 – 29
for stakeholder issues.
IMPLICATIONS OF THE SOUTH AFRICAN CARBON TAX
Issue
Sasol’s high GHG emissions make us sensitive to increasing
carbon prices, especially if out of sync with our ability to
mitigate. Further information has been requested on the
viability of our business under increasing carbon tax
scenarios.
Response
In South Africa, the recently proposed US$20 carbon tax rate
by 2026 and the US$30 by 2030, if implemented, will have an
adverse financial impact on Sasol. This suggested increase is still
subject to public input. In a conservative scenario, assuming all
allowances fall away and the increase in price is applied, Sasol
would need to consider trade-offs to balance the people, planet
and profit agenda. At this stage, there is still uncertainty on what
rate, trajectory and allowance phase-out will be applied. We are
awaiting further clarity from the ongoing government
consultation process. For this reason, the full analysis has not
been incorporated into our decision-making process as yet
(see page 19).
