Climate Action 100+: Old Mutual clears up confusion over lead role in Sasol engagement

Observers had assumed South African firm was lead investor under CA100+

Old Mutual Investment Group, the South African institutional investor, might apply to become a signatory of the Climate Action 100+ initiative, Responsible Investor understands, bridging a perceived gap in investors’ scrutiny of oil company Sasol.

South African energy group Sasol is one of the few African companies on the CA100+ focus list of high emitters.

But there had been confusion about Old Mutual’s role in engaging with Sasol under the CA100+ banner, with the understanding being that the firm was lead engager with Sasol as part of the initiative.

Old Mutual undertook a “managed separation” from UK-based Old Mutual Plc to relist and be headquartered in Johannesburg last year.

Jon Duncan, Head of Responsible Investment at Old Mutual Investment Group, told RI that a partnership with CA100+ would be considered by the newly listed South African operations.

Duncan said Sasol has been engaged with through the Principles for Responsible Investment’s Oil and Gas platform.

“We have been the engagement point person on that PRI program for Sasol,” Duncan said.

RI understands that CA100+ might have handed over Sasol to the PRI engagement platform.

“We generally don’t disclose details on which investor is leading engagement with specific companies,” a media coordinator for CA100+ told RI.

This lack of disclosure has been an issue of concern for a number of civil society organisations, which in May wrote a letter with suggestions recommending the international investor initiative to be more transparent and accountable.

Among the signatories to the letter were Just Share, the South African responsible investment organisation.“Their processes are fairly opaque, of course they say there are good reasons to that, but people on the outside can’t really tell what’s happening or who is responsible for what,” Tracey Davies, Executive Director of Just Share, told RI.

Davies noted that CA100+ is an important initiative and that there should be more South African representation.

In that respect, she recalled the comments of PRI CEO Fiona Reynolds at the annual conference of the Institute of Retirement Funds Africa on July 29.

“People on the outside can’t really tell what’s happening”

“She was very vocal about the fact that there are no big South African members of the CA100+. In response to questions, she said it’s better to have a locally based investor as lead engager for obvious reasons,” Davies said.

Just Share last year filed a shareholder resolution at Sasol, which is responsible for more emissions than Portugal, but management rejected it.

“They absolutely blocked it, on the basis that climate change is not an issue that shareholders have the right to propose resolutions on, it’s a matter for management only.”

Sasol has said their Climate Change Report, whose publication has been pushed back to September 19, will address everything Just Share asked for in the resolution.

Sasol’s carbon reporting showed missed targets and GHG emissions intensity increases of 23% from 2013 to 2017. The company did not respond to a request for comment at the time of writing.