Material matters

Our material matters are those issues that could substantially affect Sasol's ability to create value in the short, medium or long term and result of not being able to execute on our strategy and impact our ability to stay competitive.

We use the following process to manage our material matters:

step 1

By reviewing:

  • Board submissions
  • Quarterly submissions to the Group Executive Committee
  • Our operating environment
  • Risk management process and findings
step 2

By assessing:

  • Materiality
  • Impact on delivering our strategy
  • Risk metrics in the context of our strategy
step 3


  • Assessing impact on risk tolerance and risk appetite
  • Actioning activities required to manage material matters
  • Evaluating scenario modelling outcomes
  • Evaluating trade-offs between capitals
step 4
  • Plausible outcomes to the Board
  • Report to stakeholders
step 5



Material matters which impact on our ability to create value


Safety is our top priority. It is integral to our culture. Our approach to ensuring a safe workplace for Sasol’s people and our contractors is built on a strong foundation of leadership and competency and is strengthened by clear policies and procedures. We believe zero harm is possible, through a singular focus and disciplined teamwork.


Sasol operates in a cyclical environment which is increasingly volatile. Oil prices and foreign exchange rates continue to be influenced by a host of factors that include geopolitics. Disruptive technologies are altering the way businesses operate.


Through our clear strategic choices, we are well positioned to remain competitive and drive sustainable, value-based growth for all. We will deliver this by driving Continuous Improvement, enabled by effective digital technologies, high-performing people, fit-for-purpose processes, developing a diverse portfolio and better engagement with our stakeholders.


Effective human capital management is critical to the execution and delivery of our strategy. By promoting diversity and cultural transformation, attracting, developing and retaining high-performing people, engaging all employees and respecting human rights we are able to operate our facilities safely, reliably and sustainably, and deliver on our growth objectives.


In a context in which industry is increasingly being held accountable for its impact on the environment and is under pressure to deliver greater societal value, Sasol regards its response to environmental challenges not simply as a compliance obligation but rather as a business and social imperative.

  • Refer to page 4 for further details on material matters.



Safety is a core value and a top priority for Sasol. It is integral to our culture. Our approach to ensuring a safe workplace for our people and service providers is built on a strong foundation of leadership and competency and is strengthened by clear policies and procedures. We believe zero harm is possible, through singular focus and disciplined teamwork.

Given our commitment and approach to safety, we are deeply saddened to report that we experienced four tragic work-related fatalities in 2018. An incident, which resulted in the tragic death of an employee, was investigated as a fatality and the harm was determined to have been self-inflicted

All these incidents have been investigated and the learnings have been shared across the organisation. Nothing matters more than everyone returning home safely and, as such, improving safety in our operations is of the utmost importance and we remain focused on further improving our safety performance across the business.

It is encouraging to report that the Group recordable case rate (RCR) has improved to 0,27 from 0,28, our lowest level yet. The lost workday case rate improved to 0,11 from 0,12. We had six high severity injuries (HSI) during the year which is equal to the previous year.

We investigate safety incidents and near misses - including low probability and high consequence events. We use leading indicators, like inspections and equipment tests to monitor the robustness of controls and to prevent incidents. What we learn from performance insights assists with maintaining focus on our safety efforts.

All our employees have the responsibility and authority to stop unsafe work. We have safety requirements to guide our people and service providers on staying safe while performing tasks with the potential to cause harm and have daily safety talks and safety moments to reinforce our safety rules and behaviours.


There is no trade-off for the safety of people. Any loss of life in the workplace is absolutely unacceptable and damaging to most of the capital stocks - human, social and relationship, intellectual and financial. Investing in digital technologies to improve our safety performance will boost the stock of human, social and relationship and intellectual capital but have a negative impact, in the short term, on financial capital.


Following an executive safety workshop, a group-wide HSI programme was launched, centred on the elimination of fatalities and the prevention of HSIs. This programme evaluates current best practice and enable a standardised approach under four key areas:

  • Identification, mitigation and communication of hazards during pre-task risk assessments and consistent field verification of critical controls;
  • Understanding how mindset and human behaviour influences safety performance;
  • Reviewing, standardising and disciplined implementation of life saving rules;
  • Ensuring consistent sharing, implementation and embedment of Safety, Health and Environment (SHE) incident learnings to eliminate incidents.

A change management programme supports the implementation of the four focus areas, with pre-task risk assessment used as a vehicle to deliver the overall programme. We allocated 70% of the annual safety short-term incentive (STI) target to pro-active, leading indicators rather than to lagging indicators. In addition, a modifier penalty for fatalities is applied to the total incentive so that there is a direct link between the safety record achieved and the manner in which senior leadership is rewarded. Our measurement of safety is reflective of focusing our safety performance on pro-active initiatives under the STI.

Over and above the HSI focus areas, we continue to drive process safety management, which has resulted in a decreasing trend in the number of fires, explosions and releases (FERs). This can be attributed to the identification and assurance of critical controls and their effectiveness, managing process safety critical equipment and effective root cause analysis for high severity incidents .

Sasol fatalities

Sasol fatalities



The world is changing at a fast pace and there is uncertainty as to what the future will actually look like. Our aim is to build a strong and flexible strategy with a high-quality portfolio so that we can quickly adapt to the changes in the environment.

Our profitability is impacted in particular by changes in the crude oil price and the rand/US dollar exchange rate as most of our products have a rand cost base and a dollar-based final selling price.

The rand moved in a wide range, weakening in the first half of the financial year on political instability before strengthening sharply on the change in the country’s leadership. Towards year-end, the rand again weakened to R13,73 which significantly impacted the valuation of our foreign assets and liabilities. The currency volatility has significantly impacted our results and there is a risk that the rand could again strengthen to levels of R13,00. As a sensitivity, we expect that for a 10 cents change in the rand/US dollar exchange rate will impact earnings before interest and tax by approximately R880 million (US$68 million) in 2019.

We have seen crude oil prices trading at much higher levels and since December 2017, spot prices have moved closer to the US$75/bbl mark which positively impacted our results. Current rand per barrel prices are ranging between R950 and R1 050 per barrel which is between 15% – 25% higher compared with 2017 financial year. We however expect that oil prices will trade in the US$70/bbl band into the long term.

Disruptive technologies are altering the way businesses operate. This requires us to modernise the way we work using data and technology to work more efficiently, digitising our processes, embracing new advanced technologies and maintaining our downward pressure on costs.


Through our continued cost cutting and cash conservation initiatives we preserved financial capital, growth of which was however limited by our hedging activities as the crude oil price rise exceeded expectations. Reduced earnings continued to affect our spending with suppliers, negatively impacting on human as well as social and relationship capital. Our continued reprioritising of capital projects was to the detriment of manufactured capital but to the benefit of natural and financial capital. Our cost initiatives to protect our competitive advantage supported intellectual capital. Continuous Improvement and our focus on modernising how we work will grow intellectual capital and we expect financial capital will be neutral as the savings from Continuous Improvement will support our digital initiatives in the early years and thereafter financial capital will be positive.

  • Start-up the LCCP later this calendar year. Once commissioned, it will triple our chemical production capacity in the US, enabling us to further strengthen our position in a growing global chemicals market. It will diversify our earnings base, partially mitigating the impact on profitability of market volatility.
  • Completed our hedging programme for 2019 and hedged 70% of our rand/US dollar exposure for 2019 using zero-cost collar instruments, which equates to approximately US$4 billion. These will provide some cash flow and deleverage the balance sheet. They will also partially mitigate the negative translation impact of valuing the balance sheet at each reporting date. We are considering our hedging strategy for 2020 given the current oil price outlook and exchange rate volatility.
  • Entered into crude oil put options, we have hedged 48 million barrels for 2019 to protect against adverse movements in commodity and product prices and reviewed other commodity and currency hedges.
  • Driving Continuous Improvement initiatives to strengthen our cost position and improve our robustness through the cycle. We enhanced our robust foundation by conserving R85,3 billion in capital and cash between January 2015 and June 2018, exceeding the R65 billion – 75 billion target we set for ourselves. By reprioritising our capital portfolio, we are positioned well to operate profitably in a US$40/bbl oil price environment.
  • Sharpened our capital allocation discipline to maximise returns to shareholders.
  • Adopting various digital solutions to enhance our efficiency and responsiveness to the macroeconomic landscape.

Crude oil

Crude oil

Rand/US dollar exchange rate

Rand/US dollar exchange rate



Through our clear strategic choices, we are well positioned to remain competitive and drive sustainable, value-based growth for all. Our business model is robust and customer relationships globally are deep. We are strong in most of our South African businesses and retain solid standing in speciality chemicals worldwide. We have proven operational discipline as well as cost control, as exhibited over the past few years. Our management of complex value-chains is focused and we deploy and develop good technology. Our competitive asset base allows for continued free cash flow generation that positions Sasol well in those areas where we choose to compete.

The industries in which Sasol participates are increasingly being impacted by the adoption of digital solutions, which are transforming the way of work and offering opportunities for improved safety, efficiencies and returns. By harnessing technologies and talent, driving a Continuous Improvement culture, developing a diverse portfolio, leveraging talent and better engaging our stakeholders, we will be able to deliver on our strategy and ensure Sasol’s long-term competitiveness and sustainability. As part of leveraging our core strengths for focused growth, climate change considerations influenced Sasol's decision to no longer consider investments in greenfields CTL and GTL, and further increasing our crude oil refining capacity.


Improving our safety, production, technological, environmental and financial performance has positive implications for all the capital stocks. By clearly articulating our refined value-based growth strategy through greater stakeholder engagement, we support an increase in the stocks of human, social and relationship, and ultimately financial capital. Our investment in digital technologies benefits manufactured and intellectual capital but has a negative impact in the short term on financial capital. Ultimately, as we become more efficient, this investment should boost this capital but potentially be to the detriment of human and social and relationship capital.

  • In November 2017 we detailed our plans for the future by providing clarity on our near-, medium- and longer-term value-based strategy and will focus on: (Refer page 26)
    • growing our portfolio of high-value specialty chemicals;
    • pursuing progressive, disciplined growth in exploration and production in Mozambique and West Africa; and
    • growing our liquid fuels retail business in Southern Africa, capitalising on our strong brand and existing cost advantage.
    • launched our work to embed a Continuous Improvement approach, digitalisation and asset performance by:
    • focusing on improving our customer experience, co-operating closely with customers on research and technology to drive innovation, and growing with the needs of the market;
    • approving the Sasol digital journey, appointing a Chief Digital Officer to take accountability for executing on this plan and establishing a global digital office. We launched a project to modernise the information management department; approved a fund for digital programmes across the value chain; and embarked on the formalisation of our approach to data. We launched specific initiatives to release value with relatively short payback periods. These include predictive maintenance; productivity and efficiency; drones to enhance the efficiency of equipment inspections; big data to improve decision-making; and robotic process automation to automate our standard and industrialised processes and, in so doing, free up our people’s time to do more tactical and strategic work and working to improve the returns of our existing assets, optimise our annual sustenance capital expenditure and drive a widening in margins by improving our product and customer portfolios and containing our cost increases. We progressed a review of our portfolio to test the alignment of each asset to our value-based growth strategy and so enhance our competitive advantage.
  • Engaged extensively with our stakeholders to map a journey to be considered a credible stakeholder partner that makes meaningful socio-economic impact in the countries and communities in which we operate. This includes creating and maintaining a stable workforce.
  • Refocused our capital allocation framework to drive a disciplined and transparent process. We will now focus on delivering improved cash flow generation through the cycle, adopting a balanced approach to shareholder returns and a capital structure that is fit-for-the-future.
  • Improved our project execution, progressing the LCCP to plan, with the first units due to start up before the end of this calendar year.
  • Carrying out rigorous asset reviews to further improve performance and profitability.



Effective human capital management is critical to the execution and delivery of our value-based growth strategy. By promoting diversity and cultural transformation, attracting, developing and retaining high-performing people, engaging all employees and respecting human rights, we are able to operate our facilities safely, reliably and sustainably, and deliver on our growth objectives.

During 2018, we refocused our people approach to better align with our purpose of creating superior value for our stakeholders. We continued work to build a resilient organisation and engaged workforce for the future by defining our aspirational culture as well as the behaviours that accompany our refreshed values. We determined our desired leadership style and leadership competencies and have rolled such out in the organisation. We have further invested in leadership training for our senior leaders to ensure that they are equipped with appropriate tools and skills to deal with a changing workplace. In parallel, we continued on our culture transformation journey, and to invest in sponsored study, technical learning programmes, as well as leadership, career and succession development interventions and critical skills development to secure a pipeline of future talent.

Our employee value proposition remains a key focus area. We are committed to ensuring that our employees are paid appropriately, have meaningful jobs and operate in a safe environment. We are evaluating our employee value proposition to ensure that we attract and retain the best people.

Enhancing diversity and inclusion remains essential and forms part of our top priorities. We achieved our targets under our 10-Point Plan which provides a set of quantitative measures designed to enable the achievement of our diversity objectives, including the recruitment, development and retention of candidates from under-represented groups, as well as measures to enhance gender equity. We continued to promote high ethical standards, combat corruption and promote respect for human rights by creating awareness of our Code of Ethics, provide independent whistleblowing facility and conduct periodic human rights due diligence reviews of our activities and new business opportunities.


Our initiatives over the past seven years to achieve cost savings targets included efforts to manage our headcount. This negatively impacted human capital but supported our financial capital. Our focus on Continuous Improvement and digitalisation targets a more efficient and effective Human Resources (HR) model and remains key and enhance human and social and relationship capital. Although cost savings are always top of mind, these will not be to the detriment of the health, wellbeing and development of our employees. Managing our external spend on service providers negatively impacts human and social and relationship capital but benefits our financial capital.

  • To promote a healthy workforce, we advanced our approach to employee wellbeing contributing not only to employees’ health but also to the safety of employees and service providers and thus improving productivity.
  • Focused on enhancing our employee value proposition, significantly improving employee engagement. In the execution of our revised employee relations strategy, we focused on stakeholder management and prioritised constructive relationships with our employees, trade unions and works councils to maintain labour stability in our operations. We also rolled out a programme to further equip our line managers with the necessary skills required to improve employee engagement.
  • In addition, in South Africa, carried out a staff indebtedness and affordability study and a detailed survey to assess our employees’ quality of life. The results will inform future changes to our employee value proposition.
  • Invested R1,3 million in bursaries, learnerships and employee skills development. Our bursary and graduate programmes aim to secure the critical and scarce skills required to operate our plants and deliver on our value-based growth strategy.
  • Continued to focus on empowerment of women and launched an initiative to encourage open and honest discussion on how to accelerate progress on gender equity. We doubled our female workforce in our North American Operations through a programme encompassing every development entry point, including university partnerships and scholarship funding, a public education plan and elementary science, technology, engineering and mathematics education programme.

Global gender diversity

Global gender diversity

Ethnic diversity improvement of South Africa

Ethnic diversity improvement of South Africa



Sasol is dedicated to minimising the environmental impact of its operations globally, while delivering greater social value. Our key focused efforts include management of climate change related risks and air quality compliance for our South African operations. We continue to engage with the authorities regarding proposed changes to environmental regulatory frameworks and participate in the associated public participation processes.

In mitigating the compliance risks associated with increasingly stringent obligations regarding air quality management, Sasol relies on seeking extended compliance time frames through postponement applications. This enables the execution of our committed roadmaps. Sasol invests in capital and expenditures to enable the above. At Sasol, we recognise the importance of effectively managing climate change related risks and accordingly monitors and analyses the potential impacts, risks and opportunities posed by climate change on the company. Continued political attention to issues concerning climate change could have a material impact on our business globally.

We manage and mitigate the impact of our processes globally. In South Africa we do this through:

  • an extensive environmental monitoring network;
  • reporting our environmental performance, as well as deviances through various channels, including transparent engagement, reporting and our enhanced disclosure objectives; and
  • environmental stewardship where we aim to make a positive impact beyond our facilities by investigating alternative solutions for some environmental issues.


In enabling compliance with stricter emission standards that apply to our South African operations, we consider the trade-offs between the various issues affecting natural capital. As our plant processes are highly integrated, implementing emission abatement equipment could have technical implications and negatively impact manufactured capital on account of the space constraints. We use our intellectual capital to identify solutions for our unique plant processes. Addressing emissions from community sources to offset our own emissions offers an opportunity to achieve desired environmental outcomes cost effectively and with potentially greater socio-economic outcomes, thereby enhancing social and relationship capital. In some cases, there may be depletion of financial capital where new solutions are more capital intensive yet market driven.


Taking action to reduce our emissions and increase the resilience of our operations. Our value-based growth strategy has been developed by leveraging our core strengths, in response to climate change as one of the global mega trends. Scenario analysis continues to inform our long-term strategy. We pursue options for further reductions and for a greater role of gas in South Africa's energy mix. We are involved in the pilot carbon budget process for the period 2016-2020. Over the past two years we emitted approximately 115 million tons of carbon dioxide equivalents of our carbon budget limit of 302 million tons to 2020. Current projections indicate Sasol is on track with its budget. Work already commenced to enhance Sasol's climate change disclosures in 2019 to include a view on long term GHG targets, internal fiscal instruments and an update of our climate change scenario work.


Committed to limiting the impact of our South African operations in a sustainable manner, aligned with the objectives of legislation. Existing plants are required to comply with stricter minimum emission standards by 1 April 2020. While most of our processes will be able to comply with these, there are certain activities for which we will require extended timeframes beyond 2020. For these, we have applied for and intend to submit further postponements that outline a proposed roadmap to sustainable air quality improvements. We have developed an implementation plan to offset particulate matter and sulphur dioxide in areas near our facilities.

Atmospheric emissions

Atmospheric emissions


Continue to look for ways to move up the waste hierarchy. As far as possible, we apply a closed-loop system with waste streams being used as an input into other processes. This will also support adherence to new landfill prohibitions that are taking effect in South Africa.

Total waste

Total waste


Sasol is the largest industrial water user in the Integrated Vaal River System. As a signatory to the UN Global Compact CEO Water Mandate, we have adopted the Water Stewardship framework in responding to water risks. Our responses include driving voluntary water target setting; supporting catchment management; partnering in community water projects; and shaping public policy.

Total water use

Total water use