Judgment looms for Santos net zero ‘greenwashing’ case
The veracity of promises to cut emissions from one of Australia’s biggest gas companies will be put to the test as the Federal Court decides a landmark greenwashing case.
In the decision, which is expected to affect the climate commitments of all businesses, the court will rule on claims that Santos violated corporate and consumer laws by representing environmental targets.
The lawsuit, filed by the Australasian Center for Corporate Responsibility, challenged Santos’ claims that natural gas provides “clean energy” and that the company has a “credible and clear plan” to reach net zero by 2040.
Lawyers for the shareholder advocacy group also argued that the energy company’s description of blue hydrogen as “clean” and “zero emissions” was misleading.
Blue hydrogen is a fuel created using gas that relies on carbon capture technologies to deal with emissions.
The company’s defense lawyers rejected arguments that its net-zero targets lack credibility; He argued that these were always goals, not promises, and claimed that the “clean” hydrogen fuel label was only used accompanied by carbon credits.
Monash Business School Green Lab researcher Ella Vines said the case was all about the credibility of corporate climate promises.
“This sends an important signal about how companies should shape their net zero commitments and transition pathways,” Dr Vines said.
An expert on corporate sustainability regulations said courts are increasingly being asked to determine whether long-term emissions reduction claims are supported by concrete, short-term action and reliable assumptions.
“The decision will shape how boards approach climate risk disclosure, transition planning and public communications,” Dr Vines said.
Santos allegedly made misleading statements at its investor day in December 2020 and in its 2020 annual report and climate change report, both published in February 2021.
The advocacy group is seeking an injunction forcing the firm to issue a corrective notice about the environmental impacts of its operations.
It does not seek damages or compensation, saying it filed the lawsuit to justify the public interest in ensuring that corporate climate change commitments are reasonably based.
The corporate responsibility center holds shares in companies like Santos and is trying to force them to meet the goals of the Paris Agreement, the key international climate change agreement.
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