Sasol Climate Change Report 2023 - Book - Page 62
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
EXECUTIVE REMUNERATION
Our performance share plan for executives has a split
vesting period over three and five years, with restricted
shares vesting subject to conditions after five years.
Performance shares vest subject to achievement
of performance and time vesting conditions,
incorporating a significant weighting of 20% 3 25%
on sustainability metrics, covered in both the group
and business STI scorecards. Vesting of LTIs is
measured against corporate performance targets
(CPTs). Where targets are not, or only partially,
achieved, the portion of LTIs linked to the CPTs is
forfeited or reduced.
Our Remuneration Policy includes malus and clawback
provisions which apply to all variable pay awards. The
Board and REMCO can trigger such conditions in the
case of certain events stipulated in clawback and
malus clauses of the Policy (see pages 70 3 75 of
our 2023 IR ).
Absolute GHG emission reductions are included in
the LTI, aligned to the emission-reduction roadmaps.
Sasol9s 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, time and floor
space to implement renewables and hydrogen and
gas-enabling technologies. Interventions that result
in step-change emission reductions, while creating
value for stakeholders, are prioritised for capital
allocation. Our STI scorecards include a combination
of output and input targets.
The outcomes against targets included in our STI and
LTI plans depend on performance against targets set
and our progress on the roadmaps, which is assessed
holistically.
GROUP STI TARGETS
Group
target
As previously reported, the target of delivering 200MW
of renewable energy by 30 November 2023, set in
the 2021 performance share awards, came under
pressure due to factors including new restrictions
on grid access and other challenges. Despite having
signed PPAs for more than 600MW, grid access
GROUP LTI TARGETS
2023
(completed)
2024
(looking forward)
2023
(ongoing)
" Energy-efficiency
" Energy-efficiency
" Achieve a sustainable
improvement of 0 3 0,9%
" Energy-efficiency
"
Progress against 2023 STI and LTI
targets
The Group’s 2023 STI performance against
these targets was 15,3% out of the target
award of 20%. The Sasol Chemicals and
Energy businesses scored 12,5% and 21,8%
out of a potential 20% (and a maximum
stretch target of 30%), respectively, against
their individual climate change targets.
We also included in the 2024 Group STI scorecard the
development of a carbon offsets quality control and
assurance (QCA) system for the company. Offsets were
again included this year to leverage the momentum
generated from setting up the offset partnership
with Vertree in 2023. In addition, to create optionality
and flexibility, high-quality offset credits will be
needed on our journey to 2050. A QCA will therefore
be critical to ensure utilisation of well-vetted carbon
credits. LTI targets are yet to be agreed and will be
considered by the REMCO in November, financial year
2024, Board cycle.
"
"
"
improvement of 1%
Obtain Board approval
for medium-term just
transition roadmap
Achieve at least two PtX
project FEED milestones
Realise external (grant)
funding on one of the PtX
projects
Sign further agreements
to purchase carbon credits
in support of the climate
change roadmap
improvement of 0%
from 2023 baseline
" Energy-efficiency
improvement of
1% from the 2023
baseline
" Development of an inhouse Quality Control
and Assurance (QCA)
framework for carbon
offsets applicable to
the Energy, Chemicals
and ecoFT businesses
by 30 June 2024
" Energy-efficiency
" Energy-efficiency
improvement of 1,1% 3 1,5%
" Approved renewable
sourcing strategy for Sasol
Energy
" Achieve at least one
large-scale project
feasibility study external
announcement by 2023,
as an equity JV partner
in the production of lowcarbon aviation fuel or SAF
opportunity
improvement of
1,5% from the 2023
baseline
" Conduct knowledgesharing workshops
on the in-house
QCA system with
the businesses by
30 June 2024
SASOL CLIMATE CHANGE REPORT 2023
61
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 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 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%
2024
(looking
forward)
Due to uncertainties experienced in renewables procurement, grid access and other
challenges faced in 2023, the REMCO will only be able to consider LTI proposals in the
November, financial year 2024, Board cycle. LTI targets will be communicated accordingly
Our variable pay awards are designed to incentivise
value creation, including safe and sustainable
performance against financial and non-financial
targets. Strategic accountability for sustainability
issues is also driven through individual performance
agreements 3 which results in a multiplier effect on
the STI.
Our sustainability commitments, also
expressed in the incentive structures, are
well embedded in how we conduct our
operations and businesses. To achieve
the GHG targets and milestones, we
incentivise emission-reduction levers,
technologies and enablers.
In 2024, we decided to retain an energyefficiency incentive for the STI, as this remains
a major contributor to our 30% GHG reduction
target by 2030 and our 30% energy-efficiency
improvement by 2030.
THRESHOLD
Through the Remuneration Committee (REMCO),
we engage with investors and stakeholders to
understand their expectations and improve the
Remuneration Policy, as well as consult on metrics
for inclusion in the short-term incentive (STI) and
long-term incentive (LTI) plans and how our
remuneration policies are implemented. The REMCO
conducts executive benchmarking to ensure the
relevance, consistency and reliability of our
Remuneration Policy.
Performance from last year
Measures for new reporting year
STRETCH
In this way, the variable remuneration component
for all employees is connected to Sasol9s business
sustainability, social aspects and decarbonisation
agenda (people, planet and profit). Since inclusion,
the climate change 8planet9 incentives have focused
on progressing GHG emission reductions, harnessing
opportunities for a low-carbon future and laying the
foundation for a just transition.
remains a challenge. To ensure fairness in the
process, REMCO agreed to postpone a decision
regarding the achievement of this target until more
information becomes available.
TARGETS
Delivering on the Future Sasol strategy is intricately linked to our
decarbonisation targets and ambition. This link is reflected in the incentive
structure applied to the President and CEO, Executive and Senior Vice
Presidents, as well as the rest of the Group.
