Sasol Climate Change Report 2022 - Book - Page 48
INTRODUCTION
RISKS AND OPPORTUNITIES
GOVERNANCE
OUR FUTURE SASOL STRATEGY
DATA AND ASSURANCE
EXECUTIVE REMUNERATION
Incentivising climate management
The Board, through its Remuneration Committee,
applies Sasol’s Remuneration Policy to approve
applicable incentive performance targets and
weightings. The aim is to deliver a balanced
incentivisation across financial and non-financial
metrics. The Remuneration Committee takes into
account expectations of stakeholders when
assessing which metrics to include in the STI and LTI
plans. The LTI’s performance period is measured
over three years, while the STI is annual.
Group 2021
targets (completed)
Deliver 2030 GHG
emission reduction
Roadmap
IR
Further information on our incentive awards can be found in our
Remuneration Report, pages 62 – 64.
Performance from last year
Sasol’s STI and LTI plans are being used to
mainstream sustainability commitments into
operations and businesses. Sasol incentivises key
emission-reduction technologies and enablers.
Incentivising in this way is used when complexity
and age of the operations do not lend themselves
to year-on-year percentage reductions. Sasol’s
emission-reduction roadmaps, with the exclusion
of energy and process efficiency, are dependent on
capital intensive interventions. Particularly in South
Africa, some of our assets are more than 70 years
old, which requires detailed process understanding,
• Energy efficiency
improvement of
0 – 0,9%
2021
(completed)
• Energy efficiency Improvement
of 0 – 0,9%
THRESHOLD
• Deliver the 600MW
business construct
through appointment
of bidders and
contract negotiations
following the RFP
process
2023
(looking forward)
• Achieve a 3%
reduction in scope
1 and 2 emissions –
Sasol Energy
• Achieve a sustainable 3,55%
reduction (equating to 2.3 Mtpa
CO2e in scope 1 and 2 emissions)
off a 2017 baseline by end 2025
a. Sasol Energy: 3,5%
b. Sasol Chemicals: 5%
• Achieve a 70 score
on DJSI
• Energy efficiency
improvement 1%
• Energy efficiency Improvement
of 1%
• PPAs/VPPAs
signed to achieve
0,65 MtCO₂e by
end 2024
• Obtain Board approval for mediumterm just transition roadmap
• Achieve
at least two PtX projects
1
FEED milestones
• Realise external (grant) funding
on one of the PtX projects
• Deliver 2050 LT
ambition and
roadmap
Deliver 150MW of
renewables
2022
(completed in most
recent year)
• 40% renewable
power – Sasol
Chemicals
• Sign further agreements to
purchase carbon credits in support
of the climate change roadmap
STRETCH
In addition to the collective scorecards, individual
strategic accountability for sustainability issues
are driven through performance agreements, the
outcome of which is a multiplier in the STI formula.
2022
(completed in most 2023
recent year)
(looking forward)
• Setting up
sustainable Sasol
ecoFT business
venture
Energy Efficiency
Improvement 1%
Specifically, for senior management employees in
the company (senior manager level to CEO), LTI
awards are tied to performance that includes a
significant weighting of 25% on sustainability
metrics, including GHG emissions. The portion of
the LTI award that carries corporate performance
targets for the Businesses is reviewed annually to
ensure that we are driving the right outcomes.
LTI Targets
• 200MW of
renewable energy
secured for Sasol
Energy
TARGET
Sasol is committed to deliver on Future
Sasol and our key priorities, which are
reflected in the incentive structures applied
at President and CEO, Executive and Senior Vice
President and Prescribed Officer level, as well as
for the rest of the Group. Non-Executive Directors do
not participate in the variable pay plans. All employees
have a variable remuneration tied to the organisation’s
performance relating to our sustainability agenda,
harnessing opportunities in a low-carbon future and
reducing direct and indirect GHG emissions. This is
included in our Corporate and Business short-term
incentive (STI) scorecards, as well as the long-term
incentive (LTI) targets for senior personnel.
STI Targets
• Energy efficiency
1,1% – 1,5%
• Energy efficiency improvement
of 1,1% – 1,5%
• PPAs/VPPAs
signed to achieve
0.66 MtCO₂e by
end 2024
• Approved renewable sourcing
strategy for Sasol Energy
• Achieve at least one large-scale
project feasibility study external
announcement by 2023, as an
equity joint venture partner in the
production of low-carbon aviation
fuel or SAF opportunity
Deliver 200MW of • Achieve a 3,8%
renewables
reduction in scope 1
and 2 emissions at
Sasol Energy
• 60% renewable
energy at Sasol
Chemicals
• Achieve sustainable 4,18%
reduction (equating to 2,7 Mtpa
CO2e in scope 1 and 2 emissions)
off a 2017 baseline by end 2025
a. Sasol Energy: 4,0%
b. Sasol Chemicals: 8%
• Achieve a 71 score
on Dow Jones
Sustainability Index
(DJSI)
Deliver 300MW of • Achieve a 4,5%
renewables
reduction in scope 1
and 2 emissions at
Sasol Energy
• 80% renewable
power at Sasol
Chemicals
• Achieve sustainable 4,9%
reduction (equating to 3,2 Mtpa
CO2e in scope 1 and 2 emissions)
off a 2017 baseline by end 2025
a. Sasol Energy: 4,5%
b. Sasol Chemicals: 15%
• Achieve a 74 score
on DJSI
1. Front-End Engineering Design
time and floor space to implement renewables, hydrogen and gas-enabling
technologies. Interventions that result in step-change emission-reductions, while
creating value for stakeholders, are being prioritised for capital allocation. Our STI
scorecards included a combination of output and input targets. Our LTI targets,
which are on a longer time horizon, focus on a percentage reduction in GHG
emissions. The Group’s 2022 STI performance against these targets was 18,89%
out of the target award of 20%. The Sasol Chemicals and Energy businesses also
performed well against their individual climate change targets, scoring 25% out of
a potential 30% and 30,45% out of a potential 37,5%, respectively.
SASOL CLIMATE CHANGE REPORT 2022 47
Measures for the new period and what has changed
For the 2023 STI, energy efficiency was retained as a metric given its importance
for the 2030 GHG target. We have introduced additional STI measures that
support the overall transition, focusing on the sourcing of high quality carbon
credits and the development of a just transition roadmap. Through Sasol ecoFT,
we are well-placed to advance our PtX programmes and in this regard, our STI
targets include, amongst others, securing funding for related partnerships.
