SASOL LIMITED CLIMATE CHANGE REPORT for the Year Ended 30 June 2020
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SASOL LIMITED CLIMATE CHANGE REPORT for the year ended 30 June 2020 POSITIONING FOR A SUSTAINABLE FUTURE OUR THREE-PILLAR EMISSION ABOUT THIS REDUCTION FRAMEWORK CONTENTS 1 INTRODUCTION 4 EMBEDDING CLIMATE CHANGE REPORT MANAGEMENT A challenging operating 2 Sasol's second Climate Change Report is aligned with the context Governance 27 recommendations of the Task Force on Climate-related Financial Progress on The year in review 3 Introduction to Sasol's Driving performance 28 Disclosures (TCFD). This marks the second year of enhanced mainstreaming Message from the President 4 operating context, through incentives disclosures since we committed to this initiative in 2018. climate change and Chief Executive Officer 2020 highlights, steer Climate change policy and 29 management REDUCE and leadership from This year’s report provides detail on the work programme to address Our climate change 5 advocacy into strategic our climate change risks and incorporates Sasol's updated strategy Management and our and operational EMISSIONS ambitions Assessing alignment with 30 and emissions reduction roadmap to 2030. We are in the process of stakeholder base. governance structures Stakeholders are helping us 6 industry associations defining a 2050 reduction ambition and roadmap, which we intend and processes. shape our climate change Risk management 32 communicating at Capital Markets Day (CMD) in 2021. response We release a suite of annual reports inclusive of the Climate Change Report, as a sub-set of the Sustainability Report. This report should 5 DATA AND ASSURANCE therefore be read in conjunction with our suite of reports to obtain a 2 TOWARDS A LOWER-CARBON FUTURE holistic understanding of the overall sustainability approach. A TCFD index (refer to contents page) will assist in navigating these reports TRANSFORM Performance data 34 and shows alignment with best practice in climate change reporting. OPERATIONS Impact of climate change 8 Independent assurance 36 Performance data, scenario analysis on Sasol's report (scope 3) including the As we make progress on our climate change journey, we will report previous strategy assurance report. accordingly on our targets and ambitions towards becoming a lower- TCFD index 38 Scenario analysis informed 11 carbon business. Additional information IBC an updated strategy for Sasol's strategy, its resilience robustness in a lower- Sasol's suite of reports have been prepared carbon future and Decarbonising our Energy 12 in accordance with the guidelines established the manner in which business we are decarbonising under the following standards and frameworks SHIFT THE Roadmap to achieving our 14 our Energy business 2030 target and progressing the DIRECTORS’ APPROVAL The International Integrated Reporting PORTFOLIO Chemicals business. The Safety, Social and Ethics Committee (SSEC) is responsible for <IR> Framework Justly transitioning for a 16 more resilient South Africa ensuring the integrity of Sasol’s climate change reporting. We South African Companies Act 71 of 2008, as confirm that the 2020 Climate Change Report addresses all material amended Our lower-carbon Chemicals 18 issues and matters related to sustainability, and fairly represents the business Johannesburg Stock Exchange (JSE) Group’s climate change performance. The SSEC, authorised by the listings requirements Board, approved this report and its publication on 24 August 2020. King Code of Governance Principles for Signed on behalf of the SSEC: South Africa (King IV TM) 3 ENABLING INITIATIVES AND PARTNERSHIPS International Financial Reporting Standards SDG 13: CLIMATE ACTION (IFRS) Understanding the impacts 20 Global Reporting Initiative (GRI) of value chain emissions Progress on enabling Muriel Dube initiatives and Chairman of the Safety, Social and Ethics Committee Task Force on Climate-related Financial Sasol's scope 3 emission 22 Sasol supports the Paris partnerships towards Disclosure (TCFD) categories 24 August 2020 Agreement and has committed a holistic climate United Nations (UN) Sustainable to take action on SDG 13, aligned Carbon offsetting: a tool 24 change management Development Goals (SDGs) to the areas in which we operate. for social good response for the United States Securities and Exchange Ensuring resilience to the 26 Group. Commission (SEC) rules and regulations physical impacts of climate Sarbanes-Oxley Act of 2002 change Reports IR SR CCR OUR SUITE OF REPORTS These reports are available on our website, www.sasol.com, or on request from Investor Relations. Contact details are on inside back cover (IBC). AFS 20-F IR SR CCR AFS 20-F Integrated Report Sustainability Report Climate Change SASOL LIMITED Annual Financial SASOL LIMITED Form 20-F ANNUAL FINANCIAL FORMF STATEMENTS for the year ended June Concise communication Communication about Report for the year ended June Statements Our Annual Report, about how Sasol’s strategy, Sasol’s environmental, Information about Sasol’s Contains full analysis of the which is filed with governance, performance social and governance climate change risk Group’s financial results, the United States and outlook lead to the (ESG) performance. management process, with detailed financial Securities and Exchange creation of value over the response strategy statements, as well as the Commission (SEC), in line short- medium- and long- and summary of work full Remuneration Report with the requirement term. underway to address our together with the report of of our New York Stock POSITIONING FOR A POSITIONING FOR A climate change risks. SUSTAINABLE FUTURE the Audit Committee. SUSTAINABLE FUTURE Exchange (NYSE) listing. C Sasol Climate Change Report 2020 Sasol Climate Change Report 2020 1 The abrupt changes to our current operating context has accentuated vulnerabilities of a business such as ours. A CHALLENGING This has had a number of implications in the way we THE YEAR IN REVIEW view accelerated climate change action, risk in the short- OPERATING medium- and long-term, as well as how we partner with KEY MILESTONES IN OUR CLIMATE CHANGE JOURNEY stakeholders. Updated the Progressed the Launched our Secured 2,5 Progressed work Advanced work Our stakeholder focus has contributed valuable insights Group strategy process for procuring 2030 emission million tons (Mt) on our scope 3 on our 2050 for increased 600 megawatts reduction carbon credits programme ambition and CONTEXT into the limitations of Sasol's previous strategy and resilience to (MW) of renewables, roadmap, to offset carbon on baseline roadmap. highlighted opportunities within our sustainability climate change including constructing based on robust tax liability for refinement. The onset of the COVID-19 pandemic has approach. Recent events have emphasised the in response to two 10MW solar techno-economic 2019, in South severely impacted our operating context, as importance of the triple bottom line – people, planet and scenario analysis. photovoltaic (PV) evaluations. Africa. profit – as an input into strategic decision-making, not projects in South oil prices collapsed in March and the global Africa. economy slumped amid significant volatility just for us, but for governments and citizens. This has refocused energy towards 'building back better'. Group scope 3 emissions: and uncertainty. Although the impact of these Group scope 1 and 2 emissions for 2020 baseline reporting improvement for 2019 external shocks to Sasol were significant, we The challenge for us is to address risks and maximise on opportunities in a manner that ensures short-term were resolute in our commitment to Increased decisions are taken with a long-term transition in mind. emissions Secunda 6 from inclusion advancing our climate change plans, which of additional Despite a challenging 2020, we pushed forward and made Sasolburg 4 974 scope 3 sources are central to Sasol's strategy. North America 6 ) e progress on our climate change response and related GHG targets. 66 Natref Similar to COVID-19, climate change poses a Mining 8 kilotons (kt) global challenge, affecting weather systems In this journey our first milestone, which we committed Eurasia for 2020 CO e 2 that cause volatile and more intense to in 2019, is delivering scope 1 and 2 GHG emission Mozambique Satellite Operations hurricanes, frequent wildfires, droughts and reductions at Secunda and Sasolburg Operations. We continue to apply the three-pillar emission reduction GHG emissions (kt CO other disruptions. Group GHG Performance framework, to map our expected reductions. We also 6 8 2 Through a strategic reset, termed Future Sasol, evaluated more than a hundred possible integrated technical and socio-economic options to identify projects South African scope 1 and 2 emissions, we take into account the changing needs of our Group energy savings by 2020 for Sasol's 2030 roadmap. This roadmap, included in this excluding Natref 3 for 2020 stakeholders, the markets we operate in and report, is the compass to keep us on track to achieve our ) ~, Mt e our current financial and operating context. committed climate change objectives. Work continues reduction = ~ towards towards the development of a 2050 ambition and ) Robust scenario analyses that incorporates % target from ) e the dimensions of climate change have also roadmap, intended for communication at CMD in 2021. informed these updates. Our strategic choices Further opportunities are also being investigated to inform a path to ensuring Sasol remains reduce the relatively smaller GHG