Sasol Climate Change Report 2023 - Book - Page 20
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
RESILIENCE OF OUR PORTFOLIO
COVID-19 and war in Ukraine deepened cracks in globalisation
800
International Military Conflicts Index (right scale)
We leverage national and international scenario databases
to create and review a balanced but challenging set of
scenarios1. Monitoring of the global landscape is a key input
into building our scenario storylines, as are the global and
local contexts. This section gives an overview of the key
issues that shaped updated scenarios.
Globally, the energy transition landscape has witnessed
a number of fundamental changes. The importance
attached to the elements of the ‘energy trilemma’ (energy
affordability and accessibility, energy security and reliability,
and clean and sustainable energy), has shifted for different
regions of the world.
500
Brexit vote
400
~5 680
300
200
100
COVID 19
Nov - 21
Jul - 19
Sep - 20
May - 18
Jan - 16
Mar - 17
Sep - 13
Nov - 14
Jul - 12
May - 11
Jan - 09
Mar - 10
Nov - 07
Sep - 06
Jul - 05
Reference: IMF; https://www.imf.org/en/Blogs/Articles/2022/10/27/asia-and-the-world-face-growing-risks-from-economicfragmentation; Geoeconomic Fragmentation and the Future of Multilateralism, prepared by IMF.
All three energy trilemma elements required for an
orderly transition – which will be difficult to meet
1
Europe, for example, has seen an increased emphasis on
energy security whereas developing countries are focusing
more on energy affordability. The world is also experiencing
a sharpening divide between developed and developing
economies on the prioritisation and speed of the transition.
Policy, investment and collaboration are needed to facilitate
the substantial investment required to reach global net zero.
These challenges set the backdrop for the starting point of
our scenarios. It is on this basis that Sasol updates its
scenarios.
May - 04
Jan - 02
Mar - 03
Nov - 00
Jul - 98
Sep - 99
May - 97
0
Jan - 95
In addition, potential challenges to the global energy
transition have emerged in the form of insufficient skills
availability, constrained supply chains, an uncertain and
frequently changing policy and regulatory environment and
uneven technology development and deployment.
Trade Policy Uncertainty Index
600
Index (100=1995)
Global trade tensions and geopolitical risk increased
recently (see alongside). Examples include Brexit, United
States-China trade tensions and the Russia-Ukraine war.
These, combined with an ageing population in key
economies, the longer-term negative impacts of COVID-19
on education, weak investment growth, little improvement
in productivity growth and short-term cyclical shocks, such
as recession concerns, are contributing to cracks in global
integration and potentially slower global economic growth
at least until the end of the decade.
Tariffs US/China
Ukraine invasion
Geopolitical Risk Index
700
Mar - 96
Our global and South African scenarios
are updated annually to inform internal
strategy processes and decision-making.
AFFORDABLE
AND ACCESSIBLE
ENERGY
TRILEMMA
ELEMENTS
3
SECURE AND
RELIABLE
2
1. Including the International Energy Agency (IEA), South African Petroleum
Industry Association (SAPIA), Shell, bp, Oxford Economics, World Energy
Council, S&P Global, Wood Mackenzie, Rystad, International Air Transport
Association (IATA), the International Council for Clean Transport (ICCT),
BloombergNEF, World Economic Forum (WEF), International Monetary Fund
(IMF), World Wide Fund for Nature (WWF), the World Bank and Statistics South
Africa (StatsSA).
CLEAN AND
SUSTAINABLE
Lake Charles Chemicals Complex, Louisiana, United States
SASOL CLIMATE CHANGE REPORT 2023
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