Sasol Integrated Report 2023 - Book - Page 34
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
PERFORMANCE
GOVERNANCE AND REWARDS
ADMINISTRATION
OUR RISK MANAGEMENT CONTINUED
Group top risks
Our key business imperatives (Aspects), Group risk themes and associated top risks
Our integrated approach to risk management is demonstrated through developed Group risk themes linked to our triple-bottom-line
of People, Planet, Profit outcomes and business imperatives (Aspects) supporting our strategy and sustainability intent.
Managing our Group top risks
Our Group top risks (GTRs) are continuously managed, monitored
and reviewed considering our:
ASPECT 1: Short-term business resilience and viability
• Purpose and ambition.
• Strategic objectives, material matters and Group top priorities.
• Risk appetite and risk tolerance metrics.
We employ plausible business scenarios and signposts to stress test the Group’s
strategy and effectively navigate future uncertainties. The assessment of GTRs
takes into account alignment with our strategy, significant internal and external
developments, and appropriate risk pressure flags. The management of the
GTRs aligns with the targets for 2025, 2030, and our long-term 2050 ambition.
Our ERM process encompasses both routine business risks, Group top priorities,
as well as tactical and strategic risks.
RESETTING
TARGETS
TRANSITIONING
TARGETS
2050
AMBITION
The extent of
risks undertaken
are managed
within the risk
appetite and
tolerance limits
PURPOSE AND
AMBITION
Top-down
Monitoring
the internal
and external
business
and operating
environment
(using risk
pressure
flags/
signposts)
STRATEGY
RISK PROFILE /
LANDSCAPE
GOALS AND
OBJECTIVES
Bottom-up
RISK APPETITE
AND TOLERANCE
LIMITS
ENTERPRISE RISK MANAGEMENT
Business as usual risks
Group top priorities
TOP RISK FOCUS AREAS
Tactical and strategic risks
UNCERTAINTY
Transitioning to Future Sasol
The risk profile
reflects the
risks that are
undertaken,
at a current point,
to deliver our
strategy or exploit
opportunities
RISK THEME: SAFETY
AND OPERATIONAL
Includes risks associated with:
• process safety;
• occupational safety;
• occupational health and
product safety incidents;
• utility interruption (electricity
and water);
• failure of critical assets;
• extreme weather events; and
• feedstock and supply chain
disruptions (inbound and
outbound logistics).
RISK THEME: LEGAL,
REGULATORY AND GOVERNANCE
Includes risks associated with:
• legal compliance in multiple
jurisdictions;
• adherence to corporate
governance requirements;
• changing policy and regulatory
requirements in multiple
jurisdictions; and
• challenges regarding
delivery on environmental
commitments.
ASPECT 2: Medium- to long-term business viability
and sustainability
CONTINUOUSLY STRESS TESTING OUR STRATEGY
Plausible scenarios
are used to stress
test our strategy
in a complex world,
for a future point
RISK THEME: FINANCIAL
Includes risks associated with
macroeconomic factors
(key business drivers):
• volatile commodity prices
and exchange rates;
• short-term cost increases;
• credit rating downgrades;
• liquidity, solvency, gearing
and going concern;
• debt covenant breaches; and
• tax liability and exposure
(includes carbon and windfall
taxes).
RISK THEME: CAPITAL INVESTMENT
Includes risks associated with:
• project performance (cost,
schedule and quality) driven by
both internal delivery risks and risks
arising from unexpected changes
in external environment;
• capital project portfolio;
• capital allocation;
• capital availability (internal/external
funding); and
• capital structuring.
RISK THEME: GEOPOLITICAL
Includes risks associated with:
• operating in a range of countries
and regions, with varying
geopolitical, socio-economic
and developmental landscapes; and
• conflict and civil unrest.
RISK THEME: MARKET
Includes risks associated with:
• our ability to remain competitive;
• changing global marketplace
dynamics (the Russia/Ukraine war
with ensuing global inflation)
impacting supply and demand
for products (including short- to
medium-term demand collapses
and longer-term market structural
changes) and continued supply
chain challenges;
• technologies becoming
uncompetitive; and
• access to feedstocks and markets.
RISK THEME: SUSTAINABILITY
AND TRANSITION
Includes risks associated with:
• our ability to develop and implement
an appropriate climate change
mitigation response;
• our ability to implement appropriate
adaptation responses;
• increasing societal pressures;
• access to low- and lower-carbon
energies; and
• our ability to meet new and future
policy and regulatory requirements,
particularly in South Africa.
SASOL INTEGRATED REPORT 2023
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RISK THEME: INFORMATION
MANAGEMENT
Includes risks associated with:
• information and cyber security
threats including business
operations outages as well
as a force majeure.
ASPECT 3: Employee Value Proposition
RISK THEME: PEOPLE
Includes risks associated with:
• our ability to ensure an enticing Employee Value
Proposition;
• retaining and attracting people with required skills
to enable delivery of strategy and strategic objectives;
• maintaining a high-performance culture anchored in
our Values and ethics, with high levels of engagement
and productivity;
• ensuring diversity globally;
• managing organisational change;
• ensuring good labour relations (includes labour
actions or disruptions);
• changing workplace dynamics post COVID-19; and
• new normal/future workforce.
ASPECT 4: Stakeholder impact
RISK THEME: STAKEHOLDER
Includes risks associated with:
• being a credible stakeholder partner with a good
reputation;
• managing stakeholder relations across a broad
spectrum of key stakeholders;
• upholding human rights;
• delivering on commitments; and
• meeting transformation and local content objectives.