| addressing the challenge of climate
change (continued) |
|
Page | 1 | 2 | 3 | 4 |
|
|
|
| Sasol’s climate change dialogue |
|
| |
|
| "Sasol should look to the
opportunity of taking a
leadership position on
climate change. The fact
that it might be seen as an
unlikely champion on this
issue would make it all the
more powerful." |
|
| Executive director, Chemical and
Allied Industries' Association |
|
| |
|
| The following summary is written by Incite Sustainability, the convenors of this dialogue.
A more detailed account is available on request from the Sasol SH&E centre. |
|
| |
|
| On 7 August 2007, Sasol hosted a "climate change dialogue" with some leading South African
climate change practitioners. Sasol was represented throughout the meeting by nine executives
and senior managers from the group executive committee, group strategy, the SH&E centre,
investor relations and group communications. Sasol chief executive Pat Davies participated
at the start and end of the meeting. The seven external representatives comprised: |
|
| |
|
| • |
climate change policy researchers - from the University of Cape Town's Energy Research
Centre, the CSIR, and the South African Carbon Disclosure Project; |
| • |
non governmental organisation (NGO) representatives - from the South African Climate
Action Network and the WWF; and |
| • |
external business participants - from the Chemical and Allied Industries' Association
(CAIA) and the National Business Initiative (NBI). |
|
|
| |
|
| The dialogue was facilitated by a respected climate change expert and facilitator currently
involved in the development of the Long Term Mitigation Scenarios (LTMS) project for
South Africa. |
|
| |
|
| Prior to the meeting each external participant had been asked to provide a set of questions
relating to Sasol's climate change activities. Around 60 individual questions were submitted,
relating to the following main themes: |
|
| • |
Sasol's acceptance of the climate science (as suggested by the UK Government's Stern
report and the reports of the Intergovernmental Panel on Climate Change); |
| • |
Sasol's overall assessment and response to the risks of a carbon constrained future; |
| • |
Sasol’s approach to the potential need for revisiting its core
business model; |
| • |
Sasol’s interface with climate policy discussions; and |
| • |
Sasol’s involvement with the Clean Development Mechanism. |
|
|
| |
|
| "Sasol should consider
developing a multi-stage
climate strategy that is robust
to various external scenarios.
This should include a target of
reducing emissions intensity
by 20% by 2014, an absolute
target on total emissions by
2020, and a target to start
reducing emissions in
absolute terms from 2020." |
|
| Climate policy researcher -
University of Cape Town |
|
| |
|
| Perspectives on Sasol’s climate change performance |
|
The dialogue was informed by the shared perspective that there will be a need, within a
comparatively short timeframe, for a significant global reduction in absolute greenhouse gas
emissions, possibly as much as 60% of current levels by 2050. With this understanding there
was a shared agreement that any large company that is not preparing for a future constrained
by carbon, runs the risk of misallocating capital.
During the discussions differing perspectives were raised regarding Sasol's current approach
to addressing the challenge of climate change. A brief summary of some of the views raised
by the external participants is presented below. The following views do not necessarily
represent the opinions of all those present, nor is this list a comprehensive account of
all the issues raised. |
|
| • |
While Sasol's GHG policy statement shows clearly that the company is thinking
proactively about this issue, and while it is correct in highlighting carbon and water as its
two key environmental constraints, it was nevertheless suggested that Sasol's statement
lacks sufficient detail and ambition, and is not commensurate with the challenge. Although Sasol's broad approach may have been appropriate six months ago, there is
seen now to be a need for a more strategic plan containing specific targets, timeframes
and technologies. It was suggested that intensity targets, on their own, are unlikely to solve
the climate problem, and that reporting should not only be at corporate, global level, but
also by country and site. |
| • |
In terms of Sasol's growth plans relating to CTL facilities, it was suggested that the company
should consider adopting a policy of only building new CTL plants if there is provision for
carbon capture and storage (CCS). Some also questioned whether the company's growth
opportunities really lie in the area of CTL technology, or whether greater opportunities may
be found in other more diversified areas. |
| • |
Regarding Sasol's proposed approach of focusing on various "technical wedges", with
CCS being seen as a key element, it was emphasised that it is critical for Sasol to make
this succeed as carbon-based fuels are likely to be here for at least a few decades. While
many challenges were identified regarding CCS, this was nevertheless seen as an essential
technology to investigate, and it was suggested that if South Africa is to get engaged with
CCS, then this should start with Sasol. |
| • |
It was suggested that Sasol should more actively investigate opportunities for diversification
into other business areas, and that more is needed to hedge against possible failures in
terms of the delivery of "fairy godmother" technologies. There was seen to be scope for
Sasol to rethink its product offering as being "mobility" rather than the provision of fossil
fuels. Such a shift in thinking was seen to be necessary if Sasol is to meaningfully address the
carbon issue. It was noted that Sasol could build on the ingenuity that it has demonstrated
in successfully commercialising Fischer-Tropsch and other technologies into the climate
change regime. |
| • |
Sasol was encouraged to adopt a more visible leadership position on climate change.
In terms of the scenarios currently being developed within the LTMS process, it was
suggested that there is a distinction between "automatic reduction paths", "technical
reduction paths", and "where we need to get to". Leadership is seen to be about promoting
this third option, the so-called "ethical space" which is beyond short-term rationality. |
| • |
In demonstrating leadership, Sasol was encouraged to consider engaging further with the
South African government in terms of the strategic thinking required for the country from
both an economic and environmental perspective, building, for example, on the existing
dialogue that the company has had with the National Treasury, as well as through the
current LTMS process. |
| • |
Various issues were raised regarding the CDM, including a proposal for a CDM tax to be
imposed to address the social components of CDM projects, as well as suggestions that
Sasol's Mozambique gas project should not qualify as a CDM project as it was a project that
would have happened anyway and thus would have failed the CDM "additionality" test. |
| • |
While it was recognised that Sasol needs to communicate more effectively on its climate
change activities, the company was complimented for initiating this dialogue, being seen
as the first company in the country to do so. |
|
|
| |
|
| |
|
|
|
