Court dismissal raises questions about how far companies can stretch climate claims without breaching the law in Australia, the region’s most progressive jurisdiction for tackling greenwashing.
Gas company Santos has won a closely watched greenwashing lawsuit after Australia’s federal court dismissed allegations that it misled investors about its net zero plans with claims of producing “clean” energy. -
The case, brought by shareholder advocacy group the Australasian Centre for Corporate Responsibility (ACCR), was thrown out on Tuesday, with Justice Brigitte Markovic ordering the organisation to pay Santos’s costs.
ACCR, represented by non-profit environmental legal centre Environmental Defenders Office, had accused Santos of breaching the Corporations Act by making misleading statements across its 2020 annual report, an investor briefing, and a 2021 climate change report.
Santos decarbonisation plan [click to enlarge]. The company says its emissions targets are statements of “present intention”, not guarantees. Source: Santos Climate Transition Action Plan
The group argued that Santos overstated the cleanliness of its gas, misrepresented hydrogen produced with carbon capture and storage (CCS) as “zero-emissions”, and claimed to have a credible pathway to net zero emissions by 2040.
Santos rejected the allegations, arguing that ACCR ignored the company’s long-running work leading up to the reports in question. It told the court its emissions targets – a 26–30 per cent cut by 2030 and net zero by 2040 – were statements of “present intention”, not guarantees.
The case, heard over 13 days last year, was seen as an important test of how courts assess corporate climate claims at a time when regulators and investors are demanding greater scrutiny over green claims.
“
This ruling is disappointing but all fossil fuel companies, banks and super funds that are greenwashing while enabling new coal, oil and gas projects are far from off the hook.
Will van de Pol, CEO, Market Forces
Santos welcomed the ruling, saying in a statement that it remained “committed to transparent, accurate and compliant reporting”. A spokesperson said the company’s climate transition planning had progressed since the publication of its net zero roadmap, evolving with “technology, markets, and public policy”.
The spokesperson noted that the company had delivered on commitments made in 2020, including securing a regulatory framework for CCS and developing the Moomba Carbon Capture and Storage project, Australia’s first large-scale onshore carbon capture site which has been operational since 2024.
ACCR, which holds shares in major fossil fuel companies to push for Paris-aligned strategies, expressed disappointment at the outcome. Co-chief executive Brynn O’Brien said the organisation would now review the “complex” 250-page judgment.
“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.”
O’Brien said the lawsuit was aimed at strengthening market integrity by ensuring investors had the information needed to assess climate commitments – not at punishing ambition. While the court did not find Santos’s conduct unlawful, she said the proceedings had “shone a powerful spotlight on how Santos’s plans were developed and used to secure market advantage.”
Environmental finance campaign group Market Forces said the ruling should not embolden companies or their financiers to continue overstating climate progress.
“This ruling is disappointing but all fossil fuel companies, banks and super funds that are greenwashing while enabling new coal, oil and gas projects are far from off the hook,” said the group’s chief executive Will van de Pol.
He added that worsening climate impacts made accountability urgent.
“The social and economic risks of climate change are skyrocketing with worsening floods and bushfires, so fossil fuel companies and their financial backers must be held to account.”
“Santos and others expanding the scale of the fossil fuel industry are undermining the clean transition needed for a stable climate and economy,” he said.
The decision is likely to reverberate across Australia’s corporate sector as companies continue to navigate heightened scrutiny over the credibility of net zero claims and the role of CCS in decarbonisation plans.
Australia is Asia Pacific’s most progressive country for policing green claims, with stiff penalties metred out for exaggerated green claims in recent years to brands including household goods company Clorox and investment firm Vanguard.
