Sasol Limited is a publicly listed integrated oil and gas company headquartered in South Africa. In 2020, it had USD 13.00 billion in revenue and a reported 31,001 employees*. Sasol is the largest company by revenue in South Africa. Its coal feedstock serves for gasification and electricity and steam generation. Sasol plans for natural gas to be its bridge towards a low-carbon transition.
Sasol has board-level management of climate change issues, with one board member having significant climate change expertise. The company has also implemented climate change incentives for its executive team and managers, and it plans to reinforce the existing 2019 climate targets in its 2021 integrated report. Sasol’s low-carbon transition plan is detailed and contains both short- and long-term targets, though the company lacks a scope 3 emissions reduction target. The climate scenario analysis conducted by Sasol includes carbon pricing in the testing conditions and has led the company to focus its portfolio on renewables and gas instead of oil and coal.
Sasol demonstrates leadership in policy engagement. It is one of the few companies assessed in this benchmark that has publicly reviewed the alignment of trade associations with its own climate ambitions, and states that it tries to use its position in associations to drive change from within. No evidence has been found that Sasol has provided funds to trade associations with negative positions on climate policy or that it has board-level involvement within such trade associations. This illustrates an effective implementation of the company’s policy for engaging with trade associations.
Sasol aims at a 10% reduction in its scope 1 and 2 emissions intensity by 2030 compared to 2017. However, this target is not ambitious enough for the company to align with its 1.5°C pathway, which would require it to ramp up its emissions reduction rate by around 10 times its current targeted rate.
The company plans to reduce its scope 2 emissions through the development of renewable energy facilities but has not translated this goal into a target that could be assessed. It also appears to focus on energy efficiency improvements to reduce scope 2 emissions. Sasol needs to set up a more comprehensive scope 2 emissions reduction target as well as define a strategy to reduce its scope 3 emissions.
Sasol has shifted a few of its oil extraction operations to regions that are less emissions-intensive for extraction. This has resulted in a decreasing trend in its 1 and 2 emissions intensity, though this decrease is negligible. However, Sasol remains far behind its 1.5°C pathway, which requires an 8% reduction in scope 1 and 2 emissions intensity by 2024. Sasol’s locked-in emissions are also projected to overshoot its 1.5°C carbon budget by nearly 11% by 2050, and there is no indication that the company is allocating capital to deploy low-carbon and mitigation technologies.
Sasol reports that it has sent climate-related questionnaires to its strategic suppliers regarding the main climate change risks and opportunities the company faces and to calculate its carbon footprint. It plans to use the responses to design a Supply Chain Sustainability Strategy and, to this end, has also started assessing some of its suppliers’ CO2 emissions.
Despite these initial steps, Sasol scores low in terms of its performance on supplier engagement because its planned supply chain strategy has not yet led to emissions reduction by suppliers. The company could improve its performance by developing demand for low-carbon products and equipment or financing low-carbon innovation in the supply chain.
In 2020, the company has made requests for proposals (RFPs) to construct two solar power facilities with a capacity of 10 megawatts (MW) at its Sasolburg and Secunda facilities. This is a first step towards the company’s plan of generating a total of 600 MW of renewable energy by 2030. Sasol can improve its performance in terms of its low-carbon business model by ramping up its plans for the expansion of its renewable energy generation projects, disclosing the profitability and size of these projects, and by diversifying the range of its business activities supporting a low-carbon transition.
Sasol receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. Sasol is still heavily reliant on coal and plans for natural gas to be its bridge towards a low-carbon transition. The company includes solar and wind energy projects in its long-term strategy but to a lesser extent than gas because of the intermittent output of these renewable sources. Sasol is reluctant to develop biomass or green hydrogen projects. The company states that the high costs, nascency and challenges in scalability means the timelines for such projects are not aligned with its 2030 and 2050 targeted emissions reductions.
Sasol plans to rely on natural gas to transition away from its coal operations and has set up a target for a 10% reduction in its scope 1 and 2 emissions intensity by 2030 compared to 2017. Sasol also plans to reach a renewable energy capacity of 600MW by 2030, which will reduce its scope 2 emissions.
As a first step, Sasol is planning to reduce emissions through energy and process efficiencies complemented by integrating renewable energy generation at its facilities. Subsequently, it plans to transition from coal to gas operations and finally to develop low-carbon products and businesses such as green hydrogen production.
Sasol has decided to stop developing coal mining activities that could lead to stranded assets and has discontinued all oil growth activities in West Africa. Sasol’s future investments are focused on its petrochemicals business, notably the Lake Charles project, rather than low-carbon business activities.
Despite a marginal decrease in the share of its oil mix coming from more emissions-intensive regions, Sasol has maintained its oil and gas production volumes. Even if this change can drive a decrease in Sasol’s scope 1 and 2 emissions intensity, it is not enough to ensure it fully aligns with its 1.5°C pathway.
Sasol has recognised that it needs to transition away from its coal activities towards lower-carbon feedstocks but has not yet developed projects or implemented measures that have led to a significant emissions reduction. As such, Sasol’s portfolio is not on track to align with its 1.5°C pathway.