SASOL LIMITED INTEGRATED REPORT for the Year Ended 30 June 2020
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SASOL LIMITED INTEGRATED REPORT for the year ended 30 June 2020 POSITIONING FOR A SUSTAINABLE FUTURE CONTENTS OUR VISION To be a leading integrated and global chemical and energy company, proudly 1 INTRODUCTION 4 GOVERNANCE AND REWARDS rooted in our South African heritage, delivering superior About this report 02 How governance adds value at Sasol 58 value to our stakeholders. Stabilising the business and resetting Future Sasol 04 Governance overview 60 Report of the Remuneration Committee 66 POSITIONING Remuneration Implementation Report 74 FOR A 2 STRATEGIC POSITIONING OUR PURPOSE To create superior value for our Chairman’s statement 06 5 DRIVING PERFORMANCE AND SUSTAINABLE customers, shareholders and other President and Chief Executive Officer’s statement 08 SUSTAINABLE DELIVERY stakeholders. Through our talented Linking our top 2021 priorities to short-term people, we use selected technologies 11 incentives Performance overview 80 to safely and sustainably source, FUTURE Pursuing a more focused strategy 12 produce and market chemical and Statement of financial position analysis 88 Aligning our strategy to support a more sustainable energy products competitively. 16 Income statement analysis 89 planet Statement of cash flows 90 Streamlining our leadership team 18 Operational performance summary 91 Implementing a sustainable Future Sasol 20 Sasol is a global integrated Chemicals at a glance 92 Chief Financial Officer's statement 22 Chemicals 94 chemicals and energy Energy at a glance 96 OUR Mining 98 company spanning 30 SUSTAINABILITY 3 VALUE CREATION Sourcing of upstream gas 99 STATEMENT Energy liquid fuels and gas marketing 100 countries. Through our Advancing chemical and Our performance in 2020 26 energy solutions that Our operating context 28 contribute to a thriving Our business model and global presence 32 talented people, we use planet, society and 6 ADMINISTRATION enterprise. Creating value through two distinct businesses 34 How we create value 36 selected technologies to Contact details 102 Creating value using the six capitals 38 Shareholders’ diary 102 Sustaining value and our trade-offs 40 safely and sustainably Forward-looking statements disclaimer IBC Material matters impacting value creation 42 Abbreviations IBC source, manufacture and Aligning with our stakeholders 44 Our response to the global COVID-19 pandemic 48 Our key performance indicators 50 market chemical and energy SUSTAINABLE Strategically managing our Group top risks 52 FORWARD-LOOKING STATEMENTS products globally. DEVELOPMENT DISCLAIMER FRAMEWORK Sasol may, in the Integrated Report, make certain statements that We have prioritised are not historical facts and relate to analyses and other information four relevant SDGs to based on forecasts of future results and estimates of amounts not ensure our business yet determinable. These statements may also relate to our future is environmentally, prospects, developments and business strategies taking into socially and economically account the impact of COVID-19 on Sasol. Refer to the inside back cover (IBC) for our full disclaimer on forward-looking statements. sustainable. 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). 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 filed about how Sasol’s strategy, Sasol’s environmental, Information about Sasol’s Contains full analysis of the with the United States governance, performance social and governance climate change risk Group’s financial results, Securities and Exchange and outlook lead to the (ESG) performance. management process, with detailed financial Commission (SEC), in line creation of value over the response strategy statements, as well as the with the requirement short, medium and long and summary of work full Remuneration Report of our New York Stock term. underway to address our together with the report of Exchange listing. POSITIONING FOR A POSITIONING FOR A climate change risks. SUSTAINABLE FUTURE the Audit Committee. SUSTAINABLE FUTURE Sasol Integrated Report 2020 1 ABOUT THIS REPORT Internal controls framework and Committed to delivering sustainable value assessment Sasol is driven to create sustainable value for all our stakeholders. Our strategy takes into account the six capitals, the stakeholders with Our Integrated Report aims to provide a balanced The Board of Directors of Sasol Limited (the Board), with the whom we interact and the risks and opportunities that our operating environment presents. Our heavily geared balance sheet and the and accurate reflection of our strategy, performance, support of the Audit Committee, is ultimately responsible for extreme market volatility required us to revise our strategy to ensure our resilience in a dynamic new world and deliver a robust Future Sasol. opportunities and future outlook in relation to material Sasol’s system of internal control, designed to identify, evaluate, We continuously monitor the material matters that we have identified as having the potential to substantially affect – both positively and financial, economic, social and governance issues. manage and provide reasonable assurance against material negatively – our ability to create value over the short, medium and long term. The intent of the report is primarily to address value- misstatement and loss. We apply a combined assurance model, creation considerations of long-term investors but which seeks to optimise the assurance obtained from management also provides appropriate information to all our key as well as internal and external assurance providers while fostering stakeholders. a strong ethical context and mechanisms to ensure compliance. Through the risk management process, approved by the Board, management identifies key risks facing Sasol and implements the necessary internal controls. Risk Six capitals Material matters Reporting boundary for the Integrated Report The main purpose of risk management is Human capital Material matters are those issues (risks, opportunities and outcomes) Our combined assurance model to adequately position the organisation to To grow and steer our business and that could substantially affect understand and respond to the potential risks operate our facilities safely and efficiently, our ability to create value in the Financial reporting entity that could materially impact the execution of we require high-performing, innovative short, medium and long term. (control and significant influence) our strategy and value creation. and diverse people with the right skills and Responding to the lower oil price, experience. We focus on being an inclusive the severe economic effects Our top risks organisation, building and retaining of COVID-19 and managing the SASOL critical skills and developing our leadership • Financial risks balance sheet have become our capabilities. • Safety and operational risks primary focus and will significantly impact all our material matters Subsidiaries Joint arrangements Other • Legal, regulatory and governance risks investments that are described on page 42 • Information management risks • Capital investment risks Social capital To create an enabling environment Employees and organised labour | Shareholders and providers of capital The process is monitored and evaluated under the direction of internal • Geopolitical risks for operations and investment, we Maximising value from | Customers | Governments and regulators | Communities audit, while external audit teams cover key controls and accounting • Market risks foundation business | Non-governmental organisations (NGOs) | Suppliers | Media integrate the needs of our stakeholders matters in the course of their audits. Other levels of external assurance • Sustainability risks | Organised business and industry into our business and we deliver on are obtained as and when required. The Board and Audit Committee • People risks our commitments. We actively engage assessed the effectiveness of controls for the year ended 30 June • Stakeholder risks stakeholders to ensure we progress on 2020 as satisfactory, primarily through a process of management • COVID-19 risks strategy and have a multi-stakeholder Advancing sustainability approach to solve challenges. self-assessment, including formal confirmation from executive management and also considered reports from internal audit, external Our key stakeholders Our suite of reports complies with the audit and other assurance providers. The consolidated financial statements present fairly, in all material respects, our financial position, Our ongoing engagement with stakeholders Natural capital Eliminating fatalities and improving our culture following reporting standards and results of operations and cash flows as of and for the period. enhances our reputation and improves our We require natural gas, coal and crude oil understanding of stakeholders’ needs and as well as air, water, land and energy to frameworks Directors’ approval convert hydrocarbon reserves into value- interests to position us for a sustainable The International Integrated Reporting The Board is ultimately responsible for ensuring the integrity of Sasol’s adding product streams, while minimising future. our environmental footprint. Managing market