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Old Mutual Investment Managers sent a letter of intent to other industry stakeholders signalling its intent to vote against a number of resolutions at the November 17 annual general meeting of petrochemicals and fuel company, Sasol, because of its poor performance on climate targets.
And in a first for South Africa, the unit of 178-year-old Old Mutual, which has about $23 billion under management including 4% of Sasol, urged fellow investors to do the same in a letter, saying that the company’s “commitment to achieving stated targets with respect to climate is regressing.”
Massive polluter
South Africa’s biggest company by revenue accounts for about a fifth of the nation’s greenhouse gas emissions and emits a slew of other pollutants including sulfur dioxide, which can cause heart attacks and strokes. It has set a target of cutting emissions by 30% by 2030 and reaching so-called net zero by 2050.
“From a shareholder perspective the top line statement doesn’t align with what we see on the ground,” Nicole Martens, head of stewardship at OMIG, said in an interview.
Martens, who signed the letter, said it was sent to clients and industry peers including Ninety One, Sanlam Investment Management, M&G, Allan Gray, Professional Provident Society and Coronation Asset Management.
“We are hopeful that this pre-declaration of our voting intentions, both to our peers, clients and to the company itself, will go some way to catalysing positive action,” she wrote in the letter.
While OMIG has a policy of telling companies how it plans to vote this is the first time it has told peers, she said.
Sasol said it’s preparing a response.
Taking umbrage
OMIG pointed out that it plans to vote against the following resolutions:
- Approval of the implementation report of the remuneration strategy because climate-related targets used to determine executive pay are being postponed because they haven’t been achieved
- Approval of the climate change report because the resolution makes no reference to targets, which is “a step backwards” as resolutions in previous years did
- Re-election of Muriel Dube as a non-executive director as she is responsible for climate strategy and the investment company has “discontent” with the company’s performance and implementation of that strategy
Old Mutual’s move was applauded by Just Share, a Cape Town-based shareholder activist group that urges companies to, among other things, improve their performance on climate matters.
“OMIG has made responsible investment history in South Africa: this is the first time that a significant Sasol shareholder has acknowledged that its engagement strategy with Sasol is not delivering results,” Tracey Davies, executive director of Just Share, said in an emailed response to questions.
