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Shareholder Resolutions

2019:

Sasol: (AGM 27 November 2019)

On 21 October 2019, a group of six South African institutional investors co-filed another climate risk shareholder resolution with the Sasol board, which sought to compel Sasol to report on how its greenhouse gas emission reduction strategy aligns with the goals of the Paris Climate Agreement. The six investors – Old Mutual Investment Group, Sanlam Investment Managers, ABAX, Coronation, AEON Investment Management, and Mergence Investment Managers – were supported by Just Share in the early stages of this process. The co-filers, which consider these matters a material risk to the organisation, submitted their resolution to Sasol’s board for voting on at the company’s AGM on 27 November 2019, but the tabling of this resolution was also rejected by the board. Sasol’s continued resistance to shareholder attempts to hold it accountable via the tabling of shareholder resolutions is regrettable, especially from a board looking to restore trust. The institutional shareholders have indicated that they are planning further engagements with Sasol’s board on the company’s emission reduction strategy.

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FirstRand Limited (AGM: 28 November 2019)

FirstRand’s Notice of Annual General Meeting, released on 8 October 2019, includes two climate risk shareholder resolutions proposed by the RAITH Foundation and Just Share. FirstRand is the second South African company to table climate risk-related shareholder resolutions. The first was Standard Bank in April 2019 (see below). Like the Standard Bank resolutions, the FirstRand resolutions call for improved disclosure on FirstRand’s exposure to climate-related risks, and for it to adopt and publicly disclose a policy on lending to fossil fuel-related projects. Both resolutions would require more than 50% of shareholder votes to pass.

Standard Bank “TCFD shareholder resolution” (AGM: 30 May 2019)

In April 2019, Standard Bank tabled a resolution submitted by two shareholders, the RAITH Foundation and Theo Botha, with support from Just Share. This was the first climate-related resolution to be tabled at a JSE listed company. The resolution was in two parts (10.1 and 10.2). The first required the bank to prepare a report on its exposure to climate risk in its lending, financing and investment activities, and the second part required the bank to adopt and publicly disclose its policy on lending to coal-fired power projects and coal mining operations. Both 10.1 and 10.2 needed more than 50% vote to pass.

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Voting results

While the first part of the resolution did not pass, it received significant support with 38% of shareholders voting in favour, indicating strong shareholder demand for climate risk-related disclosure. The second part of the resolution was passed with 55% of shareholders voting in favour. Resolution 10.2 is therefore binding on the company.

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Resolution 10.2

After engaging with the bank as to when it would publically disclose its policy on lending to coal-fired power projects and coal mining operations, as a date had not been stipulated in the resolution, Standard Bank announced the release of its Coal-Fired Power Finance Policy (Policy) on 31 July 2019. This partly discharges the obligation imposed on Standard Bank by the 55% of shareholders who voted in favour of Resolution 10.2. In its associated SENS announcement, Standard Bank stated that it is “in the process of developing a policy on lending to coal mining operations”.

In the interim, shareholders can assess for themselves whether Standard Bank’s position on lending to coal-fired power stations is sufficiently transparent and accessible, and whether it adequately addresses the severe climate and financial risks posed by the financing of new coal-fired power infrastructure. There are, however, several areas in which shareholders might consider the Policy to be disappointing.

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2018:

Sasol Limited “2 degree scenario” shareholder resolution (2018):  in June 2018, Sasol informed the shareholders who proposed this resolution – the RAITH Foundation and shareholder activist Theo Botha, with support from Just Share – that the company would not be tabling the resolution at its 2018 AGM. At the time, Sasol’s refusal was based on a legal opinion it had commissioned, but refused to share. It also claimed that it would be addressing all the matters raised in the 2018 resolution in its 2019 Climate Change Report. (However, a review of the Report quickly reveals that this is not the case.)

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