Sasol Limited Climate Change Report 2021 - Book - Page 38
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CLIMATE CHANGE IN BUSINESS PROCESSES
Incentivising climate change action
Our rewards
Sasol’s Purpose “Innovating for a better
world” informs our Remuneration Policy.
The Board fundamentally believes that we
have to robustly address ESG-related matters
because it is the right thing to do; however,
through the Remuneration Committee, we
use the Remuneration Policy to provide
additional motivation in this regard. Sasol’s
Remuneration Policy is governed by the Board,
with delegated authority to the Remuneration
Committee. The Remuneration Committee
takes care in balancing the expectations of all
stakeholders when assessing which metrics
to include in our short-term incentive (STI)
and long-term incentive (LTI) plans. The LTI’s
performance period is measured over three
years, while the STI is yearly.
We have a comprehensive set of rewards.
Specifically, ESG including climate change
targets are incorporated to incentivise
sustainability, to the extent that employees
are able to influence the outcomes. Incentive
scorecards are included at the Group and
business level. Additionally, supervisory and
management employees have individual
performance agreements – the outcomes of
which are multiplied with the final incentive
score to provide an aggregated incentive.
Sasol is one of the first South African
companies to have included environmental
metrics in our variable pay plans, which
illustrates the priority that these matters
have with the Board. Incentives linked to
environmental and social performance are
significantly weighted. Further information
is contained in our Remuneration Report
( IR refer to page 35 - 42).
Progress on the 2021 STI and LTI targets
In 2020, we included environmental matters in our STI
and LTI plans. This was done to incentivise key emission
reduction technologies and enablers. Incentivising in this
way is used when complexity and age of the operations
do not lend itself to year-on-year percentage reductions.
Sasol’s emission reduction 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 50 years old, which requires
detailed process understanding, time and floor space
to implement renewables, hydrogen and gas-enabling
technologies.
Climate change targets in our 2021 STI and LTI plans, and the resultant outcomes are indicated below.
LTI targets from threshold
to stretch
Interventions that result in step-change emission
reductions, while creating value for stakeholders, were
prioritised for achievement by end 2021 for the STIs and
2023 for the LTIs. Our scorecards included a combination of
output and input targets. The Group’s performance against
the environmental targets in the 2021 STI was 11,17% out of
the maximum 15%.
Global energy efficiency
The delivery of 150 – 300 MW improvement of 1%
of renewable energy to our
Secunda site
Deliver the 2050 long term
ambition and roadmap
The 2050 long term ambition and roadmap was approved (2% out
of 2%)
A RFP was issued and a shortlist of bidders were selected. However,
contracts were not finalised and therefore only 2% out of 3% was
scored. This initiative is jointly managed by Sasol and Air Liquide.
For 2022, the Remuneration Committee approved the retention of global energy efficiency improvement, and to support our 2030 targets and Net Zero, with prioritisation of renewable energy
and hydrogen. The delivery of 200 MW (our share of the 600 MW) of renewable energy to the Secunda site was added, as well as progressive inclusion of renewable electricity for our International
Chemicals Business. Setting up a new sustainable business venture, establishment of global PtX partnerships and completion of two feasibility studies shows our commitment to decarbonising for
sustainability. As part of our remuneration process, we engage shareholders and interested stakeholders to provide feedback on our Remuneration Policy. This process resulted in our metrics being
further developed to include emission reductions related to each intervention and the addition of a percentage reduction milestone for our Energy Business. Subsequently, we received positive
feedback from our large institutional investors supporting these targets, and our transparency and disclosure. The 2022 LTI awards have a performance vesting period that runs from 1 July 2021 – 30
June 2024, carrying a weighting of 25%.
2022 LTI scorecard
Metric
KPI
Deliver renewable energy PPAs for 200 MW1 that will result in at least 0,6 MtCO2e
reduction
Set up the FT sustainable solutions business and advance business cases for key catalytic
projects that will deliver sustainable fuels and chemicals
ESG (Planet) (25%)
ESG (Planet) (20%)
Select and contract with
preferred bidders to deliver
600 MW of renewable energy
Energy efficiency improvement was measured at 0,4%. This target
was not achieved mainly due to the ramping down of our operations
as a result of reduced product demand caused by COVID-19 (2,17%
out of 5%)
2022 targets
Energy efficiency improvement measured from2021, which has consistently been part
of our incentives since 2016
Advancing sustainability:
Climate change
STI performance results
Deliver the 2030 GHG Emission
Reduction Roadmap by
The roadmap was delivered on time (5% out of 5%)
30 September 2020
2022 STI scorecard
KPI
STI Targets from threshold to
stretch
Advancing sustainability:
Climate change
Incentivising our Net Zero
ambition by 2050, inclusive
of the 2030 targets as a
start, which if achieved will
allow us to progress delivery
of the overall ambition
1. Sasol's portion of the initial 600 MW we are contracting from IPP's in partnership with Air Liquide.
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Sasol Climate Change Report 2021
Metric
Achieve 3 - 4,5% reduction in scope 1 and 2 emissions for our Energy Business, off a
2017 baseline by the end of 2024, resulting in 1,8 Mt CO2e - 2,8 Mt CO2e reductions
Introduce 40 - 80% renewable electricity for our Chemical operations in Europe and
Americas, resulting in 0,14 MtCO2e - 0,27 MtCO2e reductions by the end of 2024
Achieve a Dow Jones Sustainability Index (DJSI) score that is within 3 - 10% of the required
rating for inclusion into the index by November 2023