Unmasking Greenwashing: ACCR Takes Santos to Federal Court
The Australasian Centre for Corporate Responsibility (ACCR) has taken Santos Ltd to court, alleging that the company engaged in greenwashing—misleading investors and the public about its environmental impact and plans for achieving net-zero emissions. The groundbreaking legal case that could reshape corporate accountability began on October 28, 2024 in the Federal Court of Australia.
This case marks the first global legal challenge to the veracity of a corporate net-zero plan, highlighting the growing pressure on companies to align their sustainability claims with reality. The trial is set to conclude on November 15, 2024.
The Origins of the Case
The case began in August 2021 when ACCR filed a lawsuit against Santos, accusing the energy giant of breaching the Corporations Act 2001 (Cth) and the Australian Consumer Law by making misleading representations in its 2020 Annual Report.
In 2022, ACCR expanded the allegations to include misleading claims in Santos’ 2020 Investor Day Briefing and its 2021 Climate Change Report. Following further litigation discoveries, the Federal Court supervised negotiations between the two parties in early 2023, streamlining the issues in dispute.
This litigation draws attention to a critical question: Are corporate climate commitments genuine roadmaps for reducing emissions or mere marketing strategies designed to placate investors and regulators?
Advertisement:
Allegations Against Santos
ACCR’s case centers on three core claims:
- Net Zero Pathway Misrepresentations
Santos asserted in several reports and briefings that it had a credible plan to achieve net-zero emissions for its Scope 1 and 2 emissions by 2040. However, ACCR alleges that the company failed to disclose significant emissions growth planned beyond 2025 through expanded oil and gas operations. ACCR contends that the company’s reliance on carbon capture and storage (CCS) and blue hydrogen production is based on unreasonable assumptions, lacking adequate disclosure of limitations or risks. - Natural Gas as ‘Clean Energy’
Santos marketed natural gas as a clean fuel in its 2020 Annual Report. ACCR disputes this claim, arguing that Santos misled investors by omitting data on the environmental harm caused by natural gas production, including the emission of significant quantities of CO₂ and methane. According to ACCR, Santos’ operations in 2020 alone were responsible for 7.74 million tonnes of direct CO₂ emissions, with an additional 28.6 million tonnes emitted through the end-use of its gas products. This information, ACCR argues, was conspicuously absent from public reports. - Blue Hydrogen Misrepresentations
Santos promoted blue hydrogen—hydrogen produced from natural gas with CCS—as a clean, zero-emission solution. ACCR alleges that this representation was misleading because it failed to account for the increased emissions generated by the process. The lawsuit highlights that the carbon capture technology used for blue hydrogen is still evolving, making it uncertain whether the emissions can be fully offset as claimed.
Legal Implications
ACCR’s case invokes both the Corporations Act and the Australian Consumer Law, arguing that Santos misled shareholders about the environmental sustainability of its operations. Specifically, the lawsuit contends that Santos’ misleading claims could affect the value of its shares and skew investor decision-making, a violation of Section 1041H of the Corporations Act.
ACCR further argues that Santos engaged in misleading conduct in trade and commerce, violating Section 18 of the Australian Consumer Law. Additionally, the complaint alleges that by branding natural gas as “clean,” Santos violated Section 33 of the law, misleading the public about the environmental impact of its products.
Why This Case Matters
The outcome of this trial has significant implications for investors, corporations, and the broader climate debate. Investors rely on accurate information to assess risks associated with the global transition to cleaner energy.
Misleading claims about emissions reduction plans can distort markets, diverting investments from responsible companies toward those providing inaccurate or incomplete environmental disclosures.
“Without transparency, investors cannot make informed decisions,” said an ACCR spokesperson. “This case challenges the idea that companies can make vague promises about net-zero goals without having concrete, achievable plans.”
Beyond financial markets, misleading environmental claims hinder global efforts to address climate change. As nations work to transition away from fossil fuels, false or exaggerated claims delay investment in sustainable alternatives, making it harder for the world to meet its emissions targets.
Relief Sought
ACCR seeks several outcomes from the Federal Court:
- Declarations of Misleading Conduct: The court could declare that Santos engaged in misleading or deceptive conduct, violating corporate and consumer laws.
- Injunctions Against Future Greenwashing: ACCR seeks an injunction to prohibit Santos from making similar misleading claims in the future.
- Corrective Statements: The court could require Santos to issue a public statement acknowledging the environmental impacts of its operations and correcting previous misleading claims.
If the Federal Court rules in favor of ACCR, it could set a precedent, forcing companies worldwide to rethink how they communicate their climate goals and sustainability initiatives.
The Global Impact of a Local Case
This trial is being closely watched by investors, regulators, and environmental advocates worldwide. If ACCR’s claims are upheld, it could open the door for similar lawsuits against companies that use greenwashing tactics to mislead the public.
The case also reinforces the importance of holding companies accountable as governments and markets transition toward sustainable energy.
While Santos argues that natural gas and CCS are essential components of the energy transition, ACCR’s case highlights the need for companies to back such claims with transparent data.
The legal battle unfolding in the Federal Court could redefine the standards for corporate environmental reporting and reshape how businesses approach sustainability in the years to come.
The hearing will continue until November 15, 2024, with live streaming available through the Federal Court’s website. Investors, activists, and corporate leaders alike are waiting to see whether the court will usher in a new era of accountability for companies navigating the shift to net-zero emissions.
This case stands as a litmus test, signaling that as the stakes of climate change rise, so too does the scrutiny of corporate promises.
Related stories
Santos accused of misleading advertising
Santos Faces Backlash Over Controversial CSG Project Refusal
Santos want to frack coal seam gas in the Pilliga
ASIC & ASX asked to investigate if Santos misled investors over Barossa gas
Meet The Frackers: Santos Limited company information
What is “Net Zero” and How do we get there?
Advertisement:
