Seasoned shareholder activists are divided on the implications of climate protestors interrupting company meetings following the cancellation of Sasol’s AGM last week. 

The meeting in Johannesburg was abandoned on Friday after activists from climate organisations stormed the stage, holding signs with slogans including “Coal Kills” and voicing their discontent over the climate record of the South African chemicals group. They also shared testimonies from communities allegedly impacted by the firm’s plants.

Prior to the AGM, South Africa-based investors Old Mutual Investment Group and Ninety One predeclared their intention to vote against Sasol’s decarbonisation pathway. 

Old Mutual, which is on the engagement group for the company as part of Climate Action 100+, also announced plans to vote against Sasol’s remuneration report and the re-election of director Muriel Dube.

Citing the repeated lack of targets, the manager described the climate vote as a “step backwards” and said it was “not aligned to the initial objective of the resolution put forward in 2019, which was to encourage improved performance with respect to climate impact”. 

Similarly, Ninety One, which is a supporting investor in the company for CA100+, wrote that there is “still too much uncertainty and lack of momentum” around the implementation of Sasol’s decarbonisation strategy, “particularly the uncertainty around gas supply and a clear alternative”.

Sasol described the vote by Old Mutual and others as perplexing. “We consider the motivation advanced by Old Mutual for this recommendation to be flawed and underpinned by conjecture,” it said before the AGM.  

AGM cancellation response

In a statement issued after the cancellation, Sasol said its chairman had “accommodated the protestors” and invited them to a meeting with representatives of the Sasol Board, “which was declined”.

“Once it became clear that the protestors would not accommodate the effective participation of other shareholders, cancelling the meeting became the only prudent option, as the chairman was inhibited from effectively communicating with the shareholders present,” the firm said. 

Robyn Hugo, director of climate change engagement at shareholder activism organisation Just Share, tells Responsible Investor: “Given the nature of Sasol’s business and its impacts, it is quite surprising that this hasn’t happened before at a Sasol AGM.”

While Hugo says it was unfortunate that the AGM was cancelled before shareholders could vote or engage with management, she fully understands and empathises with those “who feel that protest is the only, and an essential, lever to get attention on these critical issues and Sasol’s dire impacts”.

She also notes that Sasol was very quick to shut the AGM down in response to the interruption. “It was as if they saw the protest as an opportunity to postpone the AGM in circumstances where this could be advantageous to them.

This delay provides the company with more time to engage with shareholders after Sasol has, for the first time, faced serious opposition from institutional shareholders to their climate plans. In this respect, the postponement of the AGM at this critical juncture is a blow for accountability.”

Hugo urges investors who have already voted – or decided to vote – against Sasol’s climate plans to maintain that position.

“Every year that Sasol fails to reduce its emissions, and continues to emit enormous amounts of toxic pollution and GHGs into the air, is a year that its impact on the planet and surrounding communities worsens,” she says.

“Shareholders who purport to integrate ESG into their investment decisions and to be concerned about climate change are complicit in these impacts if they are not taking all action required to ensure that Sasol sticks to its commitments.” 

RI asked Old Mutual and Ninety One for comment on the disruption and whether they will continue engagement with the firm in the interim.

A spokesperson for Old Mutual said the investor has been “actively engaging Sasol on its approach to the climate emergency for a number of years”, and reiterated its decision to vote against the resolutions at the AGM.

They added: “Out of respect for the process and our engagement with Sasol, we cannot make any further public statements at this time. We will revisit media engagement on our position following the conclusion of Sasol’s AGM.”

Ninety One had not responded at the time of publication.

Virtual AGM fears

The disruption of AGMs by protestors is nothing new. Other disruptions by climate protestors in this year’s proxy season included a cake being thrown at Volkswagen’s CEO, re-worked Spice Girls songs sung at Barclays’ AGM, and repurposed renditions of “YMCA” and The Specials’ classic “Rudy” at HSBC. 

None of the above led to the AGMs being stopped completely. Indeed, seasoned shareholder filers contacted by RI could only recall meetings being temporarily stopped or held behind closed doors due to protestors – and even that has been rare.

Nevertheless Andy Behar, CEO of As You Sow, warns that incidents such as that at Sasol could well prompt firms to revert to the virtual AGM model developed during the Covid pandemic. “This is a shame as we have gotten major deals done during coffee breaks at AGMs when we can meet with board members directly in a professional way,” he tells RI.  

Mark van Baal, founder of Follow This, agrees. “AGMs are the rare occasions where board members must honestly answer questions they do not like to answer. Storming the stage will give companies an excuse not to hold AGMs and will deprive society of the opportunity to confront boards.

“Sharp questions and shareholder resolutions are more effective to expose the behaviour of these companies than violent protests. These will only push the boards deeper into the trenches, further away from society than they are already.” 

Protestor action directly targeted at institutional investors has also been unhelpful to the cause of physical AGMs, according to market participants.

Speaking at RI Europe in June, ICGN CEO Kerrie Waring said: “Some of our members are literally being spat at. We’re now kind of thinking that, actually, fully virtual AGMs might not be that bad after all, so watch this space.” 

Earlier in the year, ICGN had called on regulators to “discourage” companies from offering virtual-only AGMs, seeing it as an infringement of shareholder rights.

In Eumedion’s evaluation of the 2023 AGM season, the investor network said that, while it is “not necessarily a bad thing” that special interest groups join the discussion at shareholder meetings, “all shareholders, including activist groups, have to respect the rules of the meeting”. 

“It is a key task for listed companies to ensure a safe environment at the entrance of and within the venue where the meeting is held,” the group added. “The notice of shareholders’ meeting should make it clear that unacceptable behaviour will not be tolerated at the meeting and that it will be dealt with appropriately by the chair.”  

At the same time, Just Share’s Hugo notes that companies “that fail to put up credible transition plans, and don’t meaningfully engage with and address communities’ concerns about their impacts”, can increasingly expect disruptive protests at their AGMs. 

Simon Rawson, ShareAction’s director of corporate engagement, agrees. “The level of anger that is boiling over in some company AGMs is a sign of how out of touch some companies are with the expectations of their stakeholders.

“It is in the best interests of these companies – and their investors – to understand and engage with stakeholders on critical issues like the climate crisis.”