Sasol : Climate Advocacy and Policy Supplement

SASOL LIMITED	Delivering
		Delivering with Purpose
	CLIMATE ADVOCACY	FUTURE SASOL
	AND POLICY SUPPLEMENT
	for the year ended 30 June 2022

CAPS

CONTENTS	OUR SUITE OF REPORTS

CLIMATE ADVOCACY AND POLICY

Advocacy	2	Annual review of our trade associations	6
Advocacy activities	4	Additional information	18
Methodology for annual review of our trade associations	5

Director's approval		Our three-pillar
The Safety, Social and Ethics Committee (SSEC) of the Sasol	emission-reduction
framework
Limited Board (the Board) is responsible for ensuring the
integrity of our sustainability and climate change reporting.
We confirm that the 2022 Climate Change Report addresses		REDUCE
all material matters relating to climate change from a
	EMISSIONS	People Planet
double materiality perspective (see IR	page 36) and
fairly represents the Group's climate change performance.		TRANSFORM	FUTURE
The SSEC, authorised by the Board, approved this report		OPERATIONS	SASOL
and its publication on 26 August 2022.			SHIFT THE	Profit
Signed on behalf of the SSEC:
		PORTFOLIO
Muriel Dube		Our prioritised SDGs are
	indicated; this report focuses
Chairperson of the SSEC
	on SDG 13 and 17.
African Business
Leadership Coalition	Applying the United
(ABLC)	Nations (UN) Global Compact
In pursuing collaboration	Ten Principles, TCFD and
and strengthening	prioritising five Sustainable
partnerships, Sasol accepted	Development Goals (SDGs).
the invitation to join the

Founding Group of the ABLC.

IR	Integrated Report
	Concise communication on Sasol's strategy, governance, performance and outlook
	and how these lead to the preservation and creation of value over the short-,
	medium- and long-term.

SR	Sustainability Report
	Communication on Sasol's environmental, social and governance (ESG) performance.
CCR	Climate Change Report
	Information on Sasol's climate change risk management process, response
	strategy and summary of work underway to address climate change risks
	and opportunities.
CAPS	Climate Advocacy and Policy Supplement
	Information on Sasol's advocacy efforts and participation in policy advocacy bodies.
AFS	Annual Financial Statements
	A complete analysis of the Group's financial results, with detailed financial
	statements, as well as the Remuneration Report and Report of the Audit Committee.
20-F	Form 20-F
	Our annual report filed with the United States Securities and Exchange Commission
	(SEC), pursuant to our New York Stock Exchange listing.
	These reports are available on our website, www.sasol.com, or on request
	from Investor Relations. Contact details available on website.

Our suite of reports are informed by the following standards and initiatives. We have sought alignment with key reporting expectations and compliance with all relevant legal requirements.

	REPORTS
The International Integrated Reporting Framework	IR	AFS
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	IR	AFS
for South Africa, 2016
International Financial Reporting Standards (IFRS)	IR	AFS	20-F
Global Reporting Initiative (GRI) Sustainability	SR	CCR
Reporting Standards
Task Force on Climate-related Financial Disclosure (TCFD)	IR	SR	CCR
UN Advanced Reporting Criteria and SDGs	SR	CCR
United States Securities and Exchange Commission	20-F
rules and regulations
Sarbanes-Oxley Act of 2002	20-F
JSE Sustainability and Climate Disclosure guidelines	IR	SR	CCR

SASOL CLIMATE ADVOCACY AND POLICY SUPPLEMENT 1

CLIMATE ADVOCACY AND POLICY

Advocacy

Our climate change advocacy position

Sasol engages with policymakers and collaborates

with trade associations to advocate our position on matters that are critical to managing climate change and our business operations. We advocate and engage in public policy discussions, with a view to maintain a balanced approach and endeavour to not compromise the interests of our shareholders, employees, customers and communities. There may be times when our views diverge from those of our trade association partners, in which instance we aim to ensure our views are noted and recorded. We engage in support of the Paris Agreement, development of low and lower-carbon sectors such as green hydrogen, renewables and gas, as well as the development of

a conducive policy and regulatory environment to encourage climate action, within the confines of our national circumstances and need for a just transition.

We are committed to having an honest conversation. This means sharing our perspective, listening to others, respecting differences and working collaboratively to find solutions. In all our climate advocacy activities, we are committed to compliance, transparency and accountability.

We rarely agree 100% with all trade associations mandates, however we believe our annual trade association review findings demonstrate our approach to managing these divergences.

Sasol is a member of various industry associations that enables us to improve our insight into a broad range of issues and facilitates the exchange of knowledge and expertise. Governance requirements are in place within the relevant industry associations to safeguard against individual business positions dominating or advancing over others.

Managing relationships with industry associations are firmly embedded in our governance and risk management processes, including within the competition/anti-trust law compliance remit. We subscribe to key national and international industry associations relevant to our business. In these associations, we constructively and collectively pursue technical outcomes and advocate for policy that relates to our respective businesses. Sasol participates at different levels within an industry association, including holding general memberships, chairing specific committees and sitting on board committees. These associations provide a platform for the collective voice of business and creates momentum to effect positive change.

Approach to managing our memberships

In instances where there is misalignment between an industry association's position and our climate change position, we voice our views clearly and reserve the right to publicly communicate this position. We may even consider termination should continued membership no longer be in Sasol's best interests. In light of our 2030 target and 2050 net zero ambition, we have enhanced monitoring, assessment and disclosures on our alignment with industry associations, by annually taking into account amongst others, credible and publicly available third-party assessments on such associations.

Recognising that an industry association's view will not always accord with ours, we also review the value-add of these memberships prior to joining, during active membership and when renewal is due.

Other engagements with government

We believe over the years we have had a positive impact when engaging with associations in supporting climate-related policy and regulatory developments, including advocating in South Africa for an aligned carbon budget/tax system and a climate change act, lifting renewable energy limits, developing a green hydrogen strategy and related incentives and supporting mandatory reporting of GHG emissions.

Sasol is an active attendee at the United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP) annual meetings. Since 2018, we continue to co-sponsor the country pavilion for the annual COP meetings and we will do so again this year for COP27. South Africa's aim in hosting a pavilion is to showcase the country's climate change activities.

Establishing the Energy Council of South Africa

The South African energy sector is still heavily reliant on fossil fuels.

To enable a thriving and sustainable energy sector in South Africa, Sasol played an instrumental role in the formulation of the Energy Council of South Africa, with other like-minded organisations that recognise the challenge and opportunities the energy transition brings given the country's national context.

The Energy Council of South Africa has set itself a mandate to play a leadership role in South Africa's energy sector, driving stakeholder and policy alignment and assisting in addressing major issues in the energy landscape for inclusive economic growth. The Council aims to advocate for accelerated policy, regulatory reform and certainty across the energy sector as the country transitions to a low-carbon economy. For further details access www.energycouncil.org.za.

SASOL CLIMATE ADVOCACY AND POLICY SUPPLEMENT 2

CLIMATE ADVOCACY AND POLICY (CONTINUED)

Advocacy (continued)

The Energy Council of South Africa has established multiple workstreams which

SASOL'S PRINCIPLES FOR RESPONSIBLE CLIMATE-RELATED ADVOCACY

includes gas, electricity, hydrogen, storage, just transition, funding and sustainable and

liquid fuels. At this stage, not all associated climate-related positions have been formulated, approved by their Board and communicated externally. Nonetheless, we undertook a review to check initial alignment with our relevant climate advocacy principles. The Council is also taking

Acknowledgement and support for climate science

The Intergovernmental Panel on Climate Change (IPCC) provides a view of how global warming is likely to affect us, if unmitigated. The scientific evidence for warming of the global climate system is unequivocal, particularly in light of the 2021 IPCC science findings. Sasol acknowledges the scientific basis relating to anthropogenic climate change. We recognise the role of industry and our responsibility in playing a part in holding global average temperature increase below targeted levels.

a collaborative approach with other industry associations to advocate for policy conducive to a low-carbon economy; this advocacy approach is still being shaped.

Other memberships

To complement our participation in formalised industry associations, we continue to subscribe to and are members of voluntary benchmarking

Support for the Paris Agreement goal

The Paris Agreement articulates the need for society to act with greater urgency to limit global warming to well below 2°C above pre-industrial levels and to pursue further efforts to limit this increase to 1,5°C. Sasol recognises that much more than current global effort is required to support the aims of the Paris Agreement. We are therefore pursuing transformational changes to our business, cognisant of the principle of common but differentiated responsibilities and respective capabilities as it relates to developing countries.

platforms to enhance our insights, governance expectations and reporting and disclosure of climate- related information. These bodies are not categorised as industry associations and therefore are not part of the self-assessment review. Nonetheless, these associations play a critical role in enriching our climate change management approach, including achieving our targets and net zero ambition.

These memberships extend to bodies, such as the CDP and Energy Productivity 100 (EP100) that seek to aggregate and provide useful mechanisms for sharing and disclosing climate-relevant information.

Support for carbon pricing that provides greater incentives for innovation and low-carbon choices

Carbon pricing provides an incentive to accelerate the low-carbon transition through emission trading schemes (ETS), budgets or taxes. Setting a price on carbon requires an integrated, well-designed, nationally determined and holistic policy response to the challenge of climate change. Sasol supports carbon pricing to enable a transition to a low-carbon economy. In our view, appropriately designed fiscal instruments and supporting mitigation action is critical, including the use of market mechanisms, such as carbon offsets and Nature-based Solutions (NbS) NbS and Technology-based Solutions (TbS) Carbon Dioxide Removals (CDRs). To ensure the viability of our projects and long-term strategy, we developed and implemented internal South African carbon prices to assist us in evaluating business decisions.

Sasol has joined EP100 as a means to demonstrate our commitment to improving energy productivity to reduce GHG emissions.

Sasol's participation in these bodies is not driven by a policy advocacy need but rather to enhance our disclosure and offer an independent measure of assurance, which can be relied upon by our stakeholders. We also actively leverage national and international industry associations, such as National Business Initiative (NBI), who recently conducted an independent study and assessment of plausible net zero pathways for South Africa. The application of independently validated outcomes enables us to

Development of low- and lower- carbon energy solutions in the form of renewable energy, green hydrogen, natural gas (as a transition feedstock and fuel) and energy efficiency

Through ambitious energy targets, the global industry is driving innovation, increasing competitiveness and reducing GHG emissions. Significant emission reductions can be achieved through energy efficiency. Renewable energy is a critical enabler for a low-carbon future and deployment at scale must take place urgently. Sasol has been a proponent of energy efficiency since as early as 2005 and committed to the EP100 initiative. Our 2030 roadmap is focused on renewable energy to reduce our emissions. Natural gas is a key enabler for an effective and efficient energy transition in developing economies. Even though it is a fossil fuel, it is a bridge for coal-based economies and can be more easily integrated with renewable energy. Sasol views transition gas and renewable energy as a springboard into green hydrogen to fully decarbonise our operations.

focus on key technical and policy levers that could unlock and accelerate our transition to a low-carbon economy dominated by green hydrogen and renewables.

Transparency and	Increased transparency is critically important to enable informed decision-
disclosure	making and instils confidence with our stakeholders that Group top risks,
	including climate change, are being addressed. We support and advocate
	for disclosure aligned with best practice standards, such as the TCFD, GRI,
	UN SDGs and their reporting criteria.

SASOL CLIMATE ADVOCACY AND POLICY SUPPLEMENT 3

CLIMATE ADVOCACY AND POLICY (CONTINUED)

Advocacy activities

Inventory of our influences and how it links to our activities

Overview of policy advocacy activities

DIRECT POLICY ADVOCACY

Climate change policy areas of engagement1

COULD INCLUDE:

South African	South African	Just transition	European Union (EU)	Adaptation strategy
Carbon tax	Climate Change Bill		Delegated Acts	technical working groups

INDIRECT POLICY ADVOCACY

CARBON TAX ENGAGEMENTS IN SOUTH AFRICA:

Executives and technical teams participated in three meetings with National Treasury on the proposed 2022 Budget Review relating to the carbon tax rates and its implications for our business, which, based on the current proposal and assuming minimal allowances, could significantly impact our economic viability and hinder the transition. Sasol reiterated support for carbon pricing and emphasised that rapid hikes in the carbon tax rate without allowances and incentives, and which is out of sync with mitigation potential, will hinder our transition rather than accelerate it. In addition, Sasol is participating in the Tax Law Amendment Bill consultation process.

CLIMATE CHANGE BILL IN SOUTH AFRICA:

Technical teams and climate change specialists attended three Parliamentary briefings by the Minister of Forestry, Fisheries and the Environment on the tabling of the Climate Change Bill to establish a legal framework for climate change management for South Africa.

• Carbon budgets: We undertook various engagements during the course of the year on allocating Sasol's next carbon budget, including engagements with the Department of Forestry, Fisheries and the Environment (DFFE) and their consultants on the development of the mandatory petrochemical sector carbon budget methodology to regulate GHG emissions.

JUST TRANSITION IN SOUTH AFRICA:

Technical teams and climate change specialists attended the Presidential Climate Commission's (PCC) dialogues on the development of a Just Transition Framework and various stakeholder consultations across the country.

• Technical teams engaged the Department of Mineral Resources and Energy (DMRE) on the Just Energy Transition Framework and its alignment with the PCC's Just Transition Framework.

EU DELEGATED ACTS:

Formal submissions were made to the European Commission. This was undertaken as part of the public consultation process in support of EU recognition for Fischer-Tropsch (FT) produced sustainable products to allow for a phased decarbonisation of Secunda towards our fossil-fuel-free vision.

Sasol's executives and technical teams engaged various German government departments and the European Commission in Brussels to indicate the importance of recognising a flexible GHG allocation methodology for co-processing fossil fuel and sustainable feedstocks in an existing facility and to extend the use of industrial fossil CO2 feedstocks as sustainable carbon sources beyond 2035.

OTHER:

Participated in a South African National Treasury multi-stakeholder consultation on the Oil and Gas Draft Discussion Document which sought to obtain views on the most appropriate tax regime for the Oil and Gas sector. In addition, support for transitioning South Africa to a net zero economy was indicated through the use of gas as a lower-carbon transition fuel.

CARBON TAX ENGAGEMENTS IN SOUTH AFRICA:

Participated with other Business Unity South Africa (BUSA) members on three engagements with National Treasury on the proposed 2022 Budget Review of the carbon tax rates and implications for business in support of a just transition. Sasol reiterated support for carbon pricing and emphasised that rapid hikes in the carbon tax rate without allowances and incentives, and which is out of sync with mitigation potential, will hinder our transition rather than accelerate it.

BROAD CLIMATE CHANGE POLICY IN SOUTH AFRICA:

• Participated with other BUSA members in two meetings of the Parliamentary Committee on Environment, Forestry and Fisheries.
• Participated with other Chemical & Allied Industries' Association (CAIA) members and the DFFE on the chemical sector's carbon budget methodology.

MEMBERSHIPS:

• Roundtable on Sustainable Biomaterials (RSB): Participating in the Power-to-X (PtX) policy and Sustainable Aviation Fuel (SAF) working groups to encourage the use of green hydrogen to produce sustainable chemicals and fuels.
• Global Alliance Powerfuels (GAP): Contributed to a policy position advocating for
  recognition of unavoidable CO2 from industrial facilities as eligible feedstocks for the production of Renewable Fuels of Non-Biological Origin (RFNBOs), such as SAF.
• Hydrogen Council: No policy engagements have taken place thus far.
• Energy Council of South Africa: No policy engagements have taken place thus far.
• NBI: Participating in the Climate Pathways Study through various steering and technical committees that are proposing pathways for achieving net zero in support of the Paris Agreement.
• EP100: Participating in the initiative which encourages greater energy efficiency uptake within business. Sasol has committed to a 30% energy efficiency improvement by 2030, off a 2005 baseline.

1. For more information on the regulatory developments Sasol is tracking and participating in see CCRpage 48.

SASOL CLIMATE ADVOCACY AND POLICY SUPPLEMENT 4