Sasol : Climate Change Report

CCR

SASOL LIMITED

CLIMATE CHANGE REPORT

for the year ended 30 June 2023

Progressing a sustainable Future Sasol

INTRODUCTION

TRANSFORMING FOR RESILIENCE

GOVERNANCE

CLIMATE ADVOCACY AND POLICY

DATA AND ASSURANCE

CONTENTS

Our suite of reports

Integrated Report

Concise communication on Sasol's

INTRODUCTION

Sasol at a glance	2
Highlights of the year	3
Sasol's climate change management approach	4
Year in review	6
Progressing efforts to achieve our targets	7
Message from the Chairperson of the SSEC	9
Message from the President and Chief Executive Officer	10
Message from the Chairperson of the Climate Change	11
Advisory Panel
Our commitment to climate action	12
Improving our emissions reporting	14
The links between FT, green hydrogen and decarbonisation	15
Risks and opportunities	16
TRANSFORMING FOR RESILIENCE
Resilience of our portfolio	19
The Future Sasol strategy	25
Implementing the Future Sasol strategy	27
Allocating capital	28
Energy Business	30
Chemicals Business	36

Our suite of reports is informed by the following standards and initiatives.

We have sought alignment with key reporting expectations and compliance with all relevant legal requirements.

The International Integrated Reporting Framework	IR
South African Companies Act 71 of 2008, as amended	IR	AFS
Johannesburg Stock Exchange (JSE) Listings Requirements	IR	AFS
King IV™ Report on Corporate Governance for South Africa, 2016	IR	AFS
International Financial Reporting Standards (IFRS)	IR	* AFS	20-F
Global Reporting Initiative (GRI) Sustainability Reporting Standards	SR	CCR
Task Force on Climate-related Financial Disclosures (TCFD)	IR	SR	CCR
United Nations Advanced Reporting Criteria and Sustainable	SR	CCR
Development Goals (SDGs)
United States Securities and Exchange Commission	20-F
rules and regulations
Sarbanes-Oxley Act of 2002	20-F
JSE Sustainability and Climate Disclosures Guidelines	IR	SR	CCR
Global tax regulations and principles	TR
* Financial data extracted from AFS and complies with IFRS

IR
			strategy, governance, performance
	SASOL LIMITED	and outlook, and how these lead to
	the preservation and creation of value
	INTEGRATED REPORT
	Progressing a sustainable Future Sasol	over the short, medium and long term.
	IR
	Sustainability Report
SR			Communication on Sasol's
			sustainability journey reflective
	SASOL LIMITED		of our environmental, social and
		governance (ESG) performance.
	SUSTAINABILITY REPORT
	Progressing a sustainable Future Sasol
	SR	Climate Change Report
CCR			Information on Sasol's climate
			change risk management process,
	SASOL LIMITED		response and summary of work
		underway to address our climate
	CLIMATE CHANGE REPORT
	Progressing a sustainable Future Sasol		change risks and opportunities.
	CCR
	Climate Advocacy and
CAPS			Policy Supplement
			Information on Sasol's advocacy
	SASOL LIMITED	efforts and participation in policy
	CLIMATE ADVOCACY AND	advocacy bodies.
	POLICY SUPPLEMENT
	Progressing a sustainable Future Sasol

Sasol ecoFT	40

Directors' approval

OUR THREE-PILLAR EMISSION-

CAPS

Scope 3	41
Sustainability certification	43
Offsets	44
Adaptation	46
Just transition	52
GOVERNANCE

The Safety, Social and Ethics Committee (SSEC) of the Sasol Limited Board (the Board) is responsible for ensuring the integrity of our sustainability and climate change reporting. We confirm that the 2023 Climate Change Report addresses all material matters relating to climate change from a double materiality perspective and fairly represents the Group's

REDUCTION FRAMEWORK

	REDUCE	People	Planet
	EMISSIONS
	TRANSFORM	FUTURE
	SASOL
	OPERATIONS	Profit

SASOL LIMITED

ANNUAL FINANCIAL STATEMENTS

Progressing a sustainable Future Sasol

AFS

Annual Financial Statements

A complete analysis of the Group's financial results, with detailed financial statements including the Report of the Audit Committee.

Governance	57
Executive remuneration	61
CLIMATE ADVOCACY AND POLICY
Climate policy advocacy	63
Regulatory developments	64

climate change performance. The SSEC, authorised by the Board, approved this report on 30 August 2023 for publication.

Signed on behalf of the SSEC:

Muriel Dube // Chairperson of the SSEC

SHIFT THE

PORTFOLIO

Our prioritised SDGs are indicated;

this report primarily focuses on SDG 13 and 17.

	Tax Report
	Our approach to tax reporting
	including defining our tax
	principles and fulfilling our
SASOL LIMITED	compliance and disclosure
TAX REPORT
Progressing a sustainable Future Sasol	obligations globally in accordance

Sasol's Climate Advocacy Declaration	67
DATA AND ASSURANCE
Performance data	69
TCFD index	70
Assurance statement	71
CA 100+ net zero benchmark assessment and Sasol's	72
response
Forward-looking statement	74
Appendix: Sasol's scope 3 emissions categories	75

Reporting frequency

This annual report is focused on our climate change risks, response and work in the financial year, 1 July 2022 to 30 June 2023. Unless otherwise stated, '2023' refers to the above-mentioned12-month period. This report is published annually and should be read in conjunction with our suite of annual reports, including our 2023 Climate Advocacy and Policy Supplement (CAPS).

We incorporate the ten Principles of the United Nations (UN) Global Compact in our business activities to uphold our purpose and values.

Principles	Principles	Principles	Principle 10
1 and 2	3, 4, 5 and 6	7, 8 and 9

TR	with all relevant legislation.
	Form 20-F
	Our annual report filed with
	the United States Securities
	and Exchange Commission (SEC),
	pursuant to our New York Stock
20-F	Exchange listing.

Our 2023 suite of annual reports reflects the clear actions taken to deliver progress as well as plans and prospects ahead.

1. These reports are available on our website, www.sasol.com or on request from Investor Relations. Additional content related to stakeholders' burning issues and our responses can also be sourced on our website. Contact details are on page 74 of this report.

SASOL CLIMATE CHANGE REPORT 2023 1

INTRODUCTION

TRANSFORMING FOR RESILIENCE

GOVERNANCE

CLIMATE ADVOCACY AND POLICY

DATA AND ASSURANCE

SASOL AT A GLANCE

We have more than 70 years' experience in the production and marketing of fuels and chemicals. We are committed to sustainability and accelerating our transition to a net zero1 ambition by 2050.

Our business is global but our roots are strongly grounded in our South African operations.

We are located in 22 countries.

2,3%	UNITED STATES

		EURASIA
UNITED	THE	1,1%
KINGDOM BELGIUM	NETHERLANDS
	GERMANY
IRELAND
FRANCE
	SLOVAKIA	UZBEKISTAN
SPAIN

CHINAJAPAN

MEXICO

ITALY

QATAR

UNITED ARAB

EMIRATES

NIGERIA

INDIA

Sasol is a global

chemicals and energy company. We are

BRAZIL

SINGAPORE

	1,3%	MOZAMBIQUE
LEGEND		95,3%
Office Operations	Sales
Projects at the pre-feasibility, feasibility or implementation phase	SOUTH
AFRICA
Research activities	Exploration Technology licensing services

Total Group greenhouse gas (GHG) emissions split for 2023

2		SCOPE3
SCOPE1 AND	64%
	36%

Total Group GHG emissions split for 2023 (scope1 and 2)

ENERGY								CHEMICALS
AFRICASOUTH	Secunda	Sasolburg	Mining	Natref2	MOZAMBIQUE2	EURASIA
83,7%	8,4%	1,2%	1,9%
	1,3%		1,1%
	Other strategic business units and Functions2, 3
		0,1%
		95,3%

NORTH AMERICA

2,3%

purpose-drivenand resolute in our transition to being a sustainable entity while creating shared value for our stakeholders.

1. Net zero for Sasol is to reduce emissions to the point where only hard-to-abate emissions remain or are zero. Any residual hard-to-abate emissions will be neutralised using carbon dioxide removals (CDRs).
2. Mozambique, Natref and some Other strategic business units and Functions are excluded from our scope 1 and 2 GHG target for 2030. However, Natref's products are included in our scope 3 target.
3. Includes emissions from pipeline operations.

PEOPLE		PLANET			PROFIT
Pursue Zero Harm and improve our culture		Advance sustainability			Deliver and maximise value
		SASOL CLIMATE CHANGE REPORT 2023	2

INTRODUCTION	TRANSFORMING FOR RESILIENCE	GOVERNANCE	CLIMATE ADVOCACY AND POLICY	DATA AND ASSURANCE

HIGHLIGHTS OF THE YEAR

OUR

COMMITMENT

TARGETS AND AMBITION

Reduce absolute scope 1 and 2 emissions by 30% by 20301

5% reduction milestone

by 2026 for Sasol Energy3

Reduce absolute scope 3 emissions by 20% by 20302

20% reduction milestone

by 2026 for Sasol Chemicals3

Net zero ambition

for absolute scope 1, 2 and 3 emissions by

20501,2

PERFORMANCE

~5% GHG reduction4

from 2017 baseline

20% - 25% pay weighting linked to ESG targets

A- score for CDP climate disclosure

REDUCE & RESET

Signed a 69MW PPA5,6 for the Sasolburg green hydrogen pilot project

Signed >600MW PPAs towards Sasol Energy's emission-reduction roadmap9

Integrated ~3MW renewable electricity at Sasolburg7

Signed ~24MW PPAs

towards Sasol Chemicals' emission-reduction roadmap10

Committed R15 - 25 billion (real 2023 terms) cumulative capital expenditure to 2030 for the emission-reduction roadmap

Developed a just transition roadmap

to support our decarbonisation roadmap and responsibly tackle socio-economic impacts

Named energy- efficiency industrial corporate company of the year by the SAEEC8

Received ~500MWh renewable electricity at Sasol Augusta, Italy11

	TRANSFORM	Extended Mozambique
	gas plateau from 2026
	& TRANSITION	to 2028 and discovered
		additional gas at
		PT5-C12

Achieved ISCC13 PLUSCompleted CCUS14 studies

recertification of sustainable for the Lake Charles

feedstocks for our Eurasian Chemicals Complex operations

Research laboratory, Sasolburg, South Africa

SHIFT &

REINVENT

Announced 50/50 JV15 agreement with Topsoe to advance SAF16 production17

Produced first	Demonstrated 10% higher SAF	Established Sasol
volumes of	yields19 with Sasol's proprietary	Ventures corporate
green hydrogen	G420 catalyst through the CARE-	venture capital
from Sasolburg	O-SENE research programme	fund to advance our
Operations18		decarbonisation ambition

Signed carbon offsets

MoU with Vertree21 to support delivery of our carbon offsets strategy

1. For the Sasol Energy and Chemicals businesses (excluding Natref and Mozambique).
2. For Category 11; applicable to Sasol Energy.
3. Reduction milestones have been developed for the context within which we operate and based on ability to reduce emissions. Sasol Energy has limited opportunities for reduction by 2026, as compared to Sasol Chemicals.
4. For combined Sasol Energy and Chemicals baseline and due to production variances and mitigation.
5. Power purchase agreement.
6. Msenge Emoyeni project (20-year PPA), in addition to the committed 1 200MW procurement.

7. Sasolburg Midlands solarphotovoltaic (PV) project to kick-start green hydrogen production.

1. South African Energy Efficiency Confederation.
2. Initial 600MW procured jointly with Air Liquide, of which 200MW is Sasol's portion.
3. For our Eurasian and North American sites.
4. Resulting in 230 tCO2e reduction to date.
5. Reducing feedstock costs and allowing Sasol to re-evaluate timing of potential liquefied natural gas (LNG) intake, PT5-C is a Mozambique gas exploration-licence area where we hold a 70% interest.
6. International Sustainability and Carbon Certification.

SASOL CLIMATE CHANGE REPORT 2023 3

14. Carbon capture utilisation and storage.

1. Joint venture.
2. Sustainable aviation fuel.
3. To exploit the competitive advantages of our FT and Topsoe's reforming technologies.
4. Initially using energy from the Midlands solar PV project - to potentially be scaled via Msenge Emoyeni.
5. Relative to our reference commercial catalyst.
6. Fourth generation.

21. Memorandum of understanding.

INTRODUCTION	TRANSFORMING FOR RESILIENCE	GOVERNANCE	CLIMATE ADVOCACY AND POLICY	DATA AND ASSURANCE

SASOL'S CLIMATE CHANGE MANAGEMENT APPROACH

OUR THREE-PILLAR

EMISSION-REDUCTION

FRAMEWORK

		2030 AND 2050 SCOPE 1 AND 2 GHG EMISSION-REDUCTION ROADMAPS		ADAPTATION AND
		• Assess and define interventions to reduce emissions in the short (up to 2025) to medium term (2026 to 2035) and transform our
			JUST TRANSITION RESPONSE
		operations in the medium to long term (2036 to 2050).

REDUCE EMISSIONS

• Short- to medium-term reductions, including switching to lower- and low-carbon energy sources
  and additional process and energy- efficiency improvements.
• Integrate and scale renewable energy

into operations.

TRANSFORM OPERATIONS

• Integrating cleaner alternative feedstocks such as gas and green hydrogen.
• Employing optimised processes and sustainable carbon feedstocks to reduce our emissions profile, where viable.
• Collaboratively finding opportunities to beneficiate our concentrated carbon dioxide sources.

SHIFT PORTFOLIO

• Creating sustainable products for new value pools using our FT technology.
• Actively reviewing equity in assets
  not aligned with our long-term strategy.
• Enabling the creation of a new green hydrogen production and market footprint.

SASOL ENERGY

SASOL CHEMICALS

2017 // Scope 1 and 2 ~63 MtCO2e1

2021 // Process and energy efficiency

(scope 1 and 2 reductions)

2025 - 600MW renewable

2026 // energy2 (scope 2 reductions)

2026 // -5%

Scope 1 and 2 ~60 MtCO2e

600MW3 renewable energy in a phased approach, and energy efficiency (scope 1 and 2 reductions)

Transition gas4; partial boiler turndown and asset optimisation (scope 1 and 2 reductions)

2030 //	-30%5 -20%6
Scope 1 and 2	Scope 3
	~44 MtCO2e	~28 MtCO2e

Decarbonising and creating new value pools (feedstock transformation - gas, green hydrogen, more renewable energy and biogenic carbon. Green hydrogen derivatives such as SAF and green methanol)

(scope 1, 2 and 3 reductions)

North America	Eurasia		BASELINE
2017 // Scope 1 and 2 ~1,1 MtCO2e	2017 //	Scope 1 and 2 ~1,1 MtCO2e
0,6 MtCO2e Lake Charles growth	Renewable electricity
Renewable electricity (scope 2 reductions)	(scope 2 reductions)
	Low-carbon feedstocks and utilities
Process and energy efficiency	(biomass, hydrogen and natural gas)
(scope 1 and 2 reductions)	(scope 1 and 2 reductions)	MILESTONES
CCUS and asset closures7	Process and energy efficiency
(scope 1 and2 reductions)	(scope 1 and 2 reductions)

2026 //	-20%	2026 //	-20%	AND
Scope 1 and 2 ~1,4 MtCO2e	Scope 1 and 2 ~0,9 MtCO2e
Advanced technologies and asset	Process electrification	ACTIONS
closures7 (scope 1 and 2 reductions)
(scope 1 reductions)
2030 //	-30%5	2030 //	-30%5	TARGET
	Scope 1 and 2 ~1,2 MtCO2e		Scope 1 and 2
			~0,8 MtCO2e
Further reduction of our carbon footprint	Further reduction of our carbon	ACTIONS
footprint (enhancement of current
(enhancement of current reduction levers,
reduction levers, extension of lower-
extension of lower-emission processes and
emission processes and advanced
advanced technologies) (scope 1 and 2 reductions)
		technologies) (scope 1 and 2 reductions)

20508 // NET ZERO9	20508 // NET ZERO9	20508 // NET ZERO9	AMBITION

Resilience to physical weather impacts10

• Proactively responding to the physical risks associated with climate change, including extreme weather events.
• Continuing to take steps to respond to current and projected future weather and climate risk for our people, surrounding communities, business and infrastructure

Enabling initiatives and partnerships

• Using quality carbon offsets as a last resort measure to complement our three-pillaremission-reduction framework.
• Developed a just transition roadmap with prioritised interventions focusing on affected workers and communities.
• Developing a global network of research, partnership and community initiatives to accelerate change.
• Communicating with our stakeholders through transparent climate change disclosures.

CCR Our framework is elaborated in more detail on page 7.

1.	Re-baselined our 2017 target base year, removing divestments and including methodological changes; also includes the	6.	Baseline 2019, Category 11 emissions, sales from Sasol and Natref's products included, representing >80% of total
	South African Chemicals value chain.	CCUS		scope 3 emissions.
2.	200MW is Sasol's portion of the initial jointly procured 600MW in partnership with Air Liquide.	7.	Non-value-adding or redundant assets.
3.	Having sold part of the Air Separation Units (ASUs) to Air Liquide, 800MW represents Sasol's consumption of the total	8.	Net zero ambition follows a strict mitigation hierarchy prioritising on-site reduction before offsets.
	1 200MW target for Sasol.		9.	In the best case scenario the fossil-fuel-free vision materialises, with no need for CDRs, while the worst-case net zero scenario
4.	Incremental transition gas, if economically viable.			leaves ~<35% hard-to-abate residual scope 1, 2 and 3 (Category 11) emissions, which will require CDRs to neutralise.
5.	Targets include carbon dioxide, methane and nitrous oxide, representing 95% of total emissions.		10.	See pages 46 - 51 for our adaptation approach.

SASOL CLIMATE CHANGE REPORT 2023 4