Sasol Integrated Report 2024 - Book - Page 36
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
REMUNERATION REPORT
DATA AND ASSURANCE / ADMINISTRATION
RISK MANAGEMENT continued
RISK MANAGEMENT IS INTEGRATED INTO OUR DECISION-MAKING PROCESSES AND DAILY OPERATIONS
Our Group top risks by aspect and risk themes continued
2
continued
ASPECT 2: MEDIUM- TO LONG-TERM BUSINESS VIABILITY AND SUSTAINABILITY continued
RISK THEME
Market
RISK THEME
Sustainability
and
Transition
RISK DESCRIPTION
Includes risks associated with:
• our ability to remain competitive;
• changing global marketplace dynamics
(the geopolitical tensions with ensuing
global inflation) impacting supply
and demand for products;
• short- to medium-term supply
and demand collapses and longer-term
market structural changes;
• technologies becoming uncompetitive;
• customers transitioning to more
sustainable products; and
• legal or tariff mechanisms introduced
that may restrict or prevent access
to markets.
RISK DESCRIPTION
Includes risks associated with:
• our ability to develop and implement
an appropriate climate change mitigation
response;
• increasing societal pressures impacting
market access and product
competitiveness;
• access to low- and lower-carbon energies;
• protecting the erosion of business
value from transitioning feedstock
as well as securing sufficient and
affordable volumes;
• delivering on our Sasol targets
and decarbonisation approach; and
• our ability to meet new and future policy
and regulatory requirements, particularly
in South Africa.
POTENTIAL IMPACT
•
•
•
•
RESPONSE
Cash flow pressure
Chemicals and refining margin squeeze
Strained customer relations
Loss of market, customer or sales contract
of a key product
• Timely delivery in full to customers including minimising outbound supply chain
interruption impacts
• Security of feedstock supply and maintaining optimal inventory levels
• New product development and innovation approach to meet market needs
• Dedicated focus on customer service and experience
• Develop alternative marketing channels and balanced product portfolio and markets
• Strategic key responses being considered across wholesale, commercial and mobility
• Exploring low-carbon technology options
• Monitor and respond to developments within the competitor landscape
ACCESS TO CAPITAL MARKETS CONSTRAINED
• Increased climate change pressures
on Sasol
• Meeting/delivering on Sasol’s
ESG aspirations
• Negative stakeholder relations impacting
Sasol’s reputation
• Negative financial impact (eg Increased
carbon tax liability)
• Threat to our legal and social licence
to operate
RESPONSE
• Optimising the emission reduction roadmap for our South African value chain to
achieve sustainable production while still decarbonising
• Undertaking robust scenario analysis in a carbon-constrained world, incorporating
potential strategy and portfolio shifts and interpreting the impact on our portfolio
• Sasol greenhouse gas (GHG) emission reduction roadmap with just transition
programme
• Enhancing and implementing our adaptation response strategy in a phased approach,
focusing on assets or business activities vulnerable to climate related physical risks
• Tracking new GHG mitigation and carbon utilisation technologies and co-creating
and collaborating on innovative solutions that benefit society and Sasol
• Proactive policy and regulatory advocacy to enable our transition pathways
• Exploring affordable alternatives and optimising options to minimise eroding value
to current business while driving initiatives to meet our sustainability
transformation requirements
• Understanding the different feedstock options regarding costs, quality, regulatory
requirements and volume of supply through engagements and alignment on strategic
partnerships (feedstock, offtake)
• Active monitoring of signposts that may impact our strategic trajectory, responding
proactively to any major external developments and tracking of strategy proof points
SASOL INTEGRATED REPORT 2024
34
