introduction The six focus areas of the UN Global Compact CEO Water Mandate are: DIRECT OPERATIONS TRANSPARENT REPORTING COMMUNITY ENGAGEMENT

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1 sasol water sense 2013

2 introduction fresh water resources are globally accepted as being scarce and under increasing pressure. We are acutely aware of the responsibility that comes with being a large industrial water user, particularly in South Africa where our largest operations are situated. We recognise the challenging regulatory and voluntary commitment landscape ahead of us and have made the management of water a strategic priority. Water presents a security of supply and regulatory risk to Sasol globally. Responding to this risk is a business imperative that Sasol is determined to meet head-on. We are doing this not only for ourselves but for the benefit of other consumers as well, says Lean Strauss, Sr. Group Executive, International Energy, New Business Development and Technology. To this effect Sasol has endorsed the United Nations Global Compact CEO Water Mandate, which is a public-private initiative aimed at assisting companies in the development, implementation and disclosure of water sustainability policies and practices. The mandate presents a comprehensive approach to corporate water stewardship and is a voluntary initiative developed to inspire businesses to positively contribute to sustainable water resource management. As signatories of the CEO Water Mandate, we recognise that inadequate water management, investments and governance pose a range of challenges and risks to our The six focus areas of the UN Global Compact CEO Water Mandate are: DIRECT OPERATIONS SUPPLY CHAIN AND CATCHMENT MANAGEMENT COMMUNITY ENGAGEMENT COLLECTIVE ACTION TRANSPARENT REPORTING PUBLIC POLICY business operations. These include business continuity risks; reputational and regulatory risks; and health risks for our employees and those living in the communities where we operate. While we represent a diverse range of industries and geographies, we are united in our belief that improving water resource management and governance are urgent global priorities. In this regard, we support international efforts to improve water management, and the exchange of experiences, lessons and best practices. We are committed to helping to accelerate progress in achieving international development goals, both in the coming years and over the long term. Communiqué endorsed by David Constable, Chief Executive Officer, Sasol Limited, with other CEO signatories to the CEO Water Mandate launched during the Rio +20 World Summit on Sustainable Development, June 2012 To bring the principles of the Water Mandate to life we have initiated Sasol Water Sense, a comprehensive One Sasol approach to water stewardship. 02 Water Treatment Plant section of the Central Processing Facility in Mozambique 03

3 direct operations we aim to reduce our direct water footprint by undertaking water-use assessments, setting targets, implementing new technologies, raising awareness within the corporation and including water considerations in business decision-making. Sasol s refining and chemical manufacturing processes require water primarily to regulate temperatures and generate steam. Supported by Sasol Technology, our operations are working hard to improve our direct water use and water efficiency through technological improvements, as well as the re-use and recycling of water and the development of more water-efficient plants. As it is seen as an essential operational issue, water-use efficiency has been added to our Operational Excellence Management System (OEMS), where defined metrics and practices are used as tools to deliver excellent operational performance. We have to set an example by improving our own direct water-use efficiency. We re achieving this by changing the way we operate and focusing on water efficiency through site-specific water targets," says Bernard Klingenberg, Group Executive, Southern Africa Energy. With usage in 2010 as a baseline, Sasol Synfuels and Sasol Infrachem are targeting improved water use efficiencies on behalf of the Secunda and Sasolburg sites respectively. Water use by our operations varies widely, depending largely on feedstock, technology choices and the design of the facility. A gas-to-liquids (GTL) plant typically has a much lower water demand than a coal-to-liquids (CTL) process which has greater cooling requirements. Both GTL and CTL processes also generate useful quantities of process water that is beneficially re-used. We have to set an example by improving our own direct water-use efficiency Our existing operations and future growth projects are considerate of the increasing demand and competition for water as a scarce resource. Responsible water stewardship is a business imperative. 04 Maintenance being performed on the biological water processing plant at Sasolburg 05

4 catchment management and supply chain we support catchment management initiatives, share best practices and encourage suppliers to reduce their water footprint. The Integrated Vaal River system is the lifeblood of the domestic, industrial and agricultural sectors concentrated in the province of Gauteng and surrounds being the engine room of South Africa s economy, and arguably one of the key economic nodes of the continent. Sasol s demand from this system accounts for about 4% of the Vaal River supply capability which in turn represents 80% of Sasol s global water requirements. Accordingly, we realised that it makes sense to go beyond our factory fence line and become actively involved in helping to address water issues in the Vaal River catchment. We are exploring water-related issues in this region in a holistic manner, engaging, for example, with stakeholders through catchment management forum structures. We also actively participate in the Vaal River Strategy Steering Committee, which informs decisions regarding infrastructure, planning and resource management. The agricultural sector is responsible for about 40% of water use from the Vaal River system. In order to promote responsible water management in this sector, Sasol sponsors farmers training days, focusing on the improvement of agricultural water-use efficiency. Web-based material has been developed and published to help ensure the sustainability and expansion of this education and awareness initiative (estimate), billion cubic metres Commercial Public Household Leakage Mining Manufacturing Power Irrigation Ground water Surface water be a supply demand gap of 17% in 2030 Principal water management areas in South Africa Surplus Moderate gap Severe gap Demand 2030 Supply 2030 NOT INCLUDED Losses due to acid mine drainage Additional irrigation requirements Climate change SOURCE: National Water Resource Strategy, September 2004; WRG Vaal River 07

5 collective action we recognise that a multi-stakeholder approach is key to water security and commit to building closer ties with local, national and international civil society organisations and governments. Recognising that, due mainly to ageing infrastructure, water losses by municipalities in the Vaal River catchment can be as high as 45%, Sasol has concluded three multistakeholder partnership agreements to help reduce these physical water losses. These collective action partnerships include repairs of household, distribution system and school water leaks. To date, Sasol has committed R8 million and leveraged an additional R9 million through partner funding, to implement these water conservation projects. For our flagship partnership the savings would equate to about a 15% reduction in water demand for the municipality and avoided expenses of about R60 million annually compared to the 2010 baseline. Through these actions beyond our factory fence line, we aim to enable municipalities and to unlock substantial savings which will enable them to fund and implement further water conservation projects. Sasol is also a founding member of the Strategic Water Partnership Network in South Africa (SWPN) a collaborative platform for the Department of Water Affairs (DWA) and a number of key private and public sector partners. The objective of the SWPN is to jointly address water risks facing South Africa and to reduce the current gap between water supply and demand. Sasol recognises the benefits of collective efforts, across sectors and stakeholders, in addressing water challenges. Together we can do more. Water losses by municipalities in the Vaal River catchment can be as high as 45% 08 Repairing leaks in Emfuleni, as part of the partnership between Sasol and the local municipality 09

6 community engagement we support and actively engage with communities to address water sustainability issues. Water security is not just about projects that save water. Too many people both rich and poor take water for granted. The challenge is to create a culture where water is valued and viewed as the precious natural resource it is. To help meet this challenge, Sasol has partnered with various municipalities and the Department of Water Affairs to share the water message. Community engagement of this nature is just one aspect of our multi-faceted water strategy. The other is education. Sasol is conducting a comprehensive water education and awareness campaign at selected schools, using material developed by the Department of Water Affairs (DWA) as part of their 2020 Vision for Water Education. Sasol is The challenge is to create a culture where water is valued and viewed as the precious natural resource it is sponsoring the printing of the learner and teacher booklets for schools in the Metsimaholo Municipal area and is rolling out the material through water awareness road shows and teacher training in collaboration with DWA. 10 Community bore holes in Mozambique 11

7 public policy we contribute to the formation of government policy and regulations and exercise business statesmanship as advocates for water sustainability. We participate in a number of government-led initiatives, including participation in the South African Department of Water Affairs Water Sector Leadership Group (WSLG) and catchment specific initiatives such as the Vaal River Strategy Steering Committee. An example of Sasol s involvement is to provide meaningful input to South African National Water Resource Strategy 2. At an international level we are involved in drafting UN Global Compact CEO Water Mandate guides. Guidelines for Responsible Engagement with Water Policy, as well as Guidelines for Collective Action have been completed. Sasol is collaborating with the National Department of Water Affairs for the development of a water-offsetting policy. Such a policy would have the potential to incentivise the large-scale replication of water conservation partnership projects, such as those Sasol are involved in. We participate in a number of government-led initiatives, including participation in the South African Department of Water Affairs Water Sector Leadership Group (WSLG) 12 13

8 transparency we transparently disclose and report on water issues, guided by the indicators established by the Global Reporting Initiative (GRI). Our actions include the following: We disclose water usage and other water-related issues in terms of the GRI indicators in our annual Sustainable Development report We participate in the annual Water Disclosure Questionnaire of the Carbon Disclosure Project We publish an annual Communication of Progress on water matters to the CEO Water Mandate We publish discussion pieces on Sasol s water challenges, water technology efforts and on the water conservation partnerships We contribute to the development of a water disclosure guideline by the CEO Water Mandate By reducing our water risks we are also establishing Sasol as a credible partner in the water sector, willing to work collectively to improve water security for the benefit of all users. Our initiatives also show that working together as one Sasol, we can achieve benefits for and beyond our company. We realise that managing water does not have an end point and we will continually respond to opportunities and challenges as they arise. Water security impacts our sustainability as a business, as an economy and as a society. By optimising our own operations and partnering with communities, industries and governments, we believe we can develop a culture of water sense and make a difference. Because together, we are better. Nolitha Fakude, Executive Director Sustainability & Business Transformation 14 Water cooling circuit at Oryx, Qatar 15

9 For more information on Sasol's water sense go to