Gas company Santos has successfully defended a landmark greenwashing case in which it was accused of making misleading claims about its net zero plans and being a producer of “clean” energy.
In a blow for climate activists, the federal court on Tuesday dismissed the case brought by the shareholder advocacy group the Australasian Centre for Corporate Responsibility (ACCR).
The ACCR, represented by the Environmental Defenders Office, alleged the gas company breached the Corporations Act by engaging in misleading or deceptive conduct in its 2020 annual report, an investor briefing and a 2021 climate change report.
Central to these allegations were three key claims by Santos: that it was a producer of “clean energy” and natural gas was a “clean fuel”; that hydrogen it produced with carbon capture and storage was “zero emissions hydrogen” and “clean hydrogen”; and that it had a clear and credible pathway to net zero by 2040.
Santos argued ACCR’s case ignored years of its work in the lead-up to its 2020 investor briefing and annual report, and its 2021 climate change report.
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It told the court its climate targets – to reduce emissions by 26% to 30% by 2030 and reach net zero emissions by 2040 – represented a statement of “present intention” and “not a promise or prediction”.
Justice Brigitte Markovic dismissed ACCR’s case in a brief hearing on Tuesday, and ordered the organisation to pay Santos’s costs. The reasons for the decision will be published on 23 February.
The case, heard over 13 days in 2024, was a test for how courts assess statements made by companies about how they are managing the net zero transition.
Santos welcomed the decision and said it was “committed to transparent, accurate and compliant reporting”.
The company said in a statement on Tuesday afternoon that since the publication of its net zero roadmap it had developed a climate transition plan that continued to evolve “with the progression of technology, markets, and public policy over time”.
“Santos said in 2020 that we would develop the Moomba Carbon Capture and Storage project, we said we would work with governments to get a CCS methodology and regulatory framework in place to support its development – and we did,” a Santos spokesperson said.
“Moomba CCS has been up and running since September 2024.”
The ACCR holds shares in fossil fuel companies, such as Santos, to try to force them to meet the goals of the Paris climate agreement.
Brynn O’Brien, the co-chief executive of the ACCR, said the organisation was disappointed and would now consider the “complex” judgment and its more than 250 pages of reasons.
“This was a landmark case that paved the way for others around the world to challenge corporate net zero claims in court,” she said.
“It has been a David versus Goliath battle, and Goliath won this round.
“While the court found that Santos’s conduct was insufficient to breach the law, the case has shone a powerful spotlight on how Santos’s plans were developed and used to secure market advantage.”
O’Brien said the case was about “standing up for market integrity and ensuring that investors are given all the information necessary to confidently assess emissions targets and net zero plans” – and was not aimed at “punishing climate ambition”.
Comment has been sought from Santos.
