{"id":507664,"date":"2026-02-27T14:03:09","date_gmt":"2026-02-27T14:03:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/507664\/"},"modified":"2026-02-27T14:03:09","modified_gmt":"2026-02-27T14:03:09","slug":"yes-santos-was-cleared-of-greenwashing-but-a-climate-law-reckoning-still-looms","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/507664\/","title":{"rendered":"Yes, Santos was cleared of greenwashing. But a climate law reckoning still looms"},"content":{"rendered":"

The judgment in the long-running greenwashing case brought against Australian gas producer Santos \u2013\u00a0published earlier this week<\/a>\u00a0\u2013 was, on its face, a blow to efforts to hold major fossil fuel companies accountable for climate change.<\/p>\n

The Federal Court dismissed all greenwashing allegations levelled at Santos by the Australasian Centre for Corporate Responsibility (ACCR), finding Santos had not misled consumers or shareholders about its decarbonisation plans or status as a producer of \u2018cleaner fuels\u2019.<\/p>\n

The judgment was largely disappointing for those seeking to hold major fossil fuel producers, like Santos, accountable through legal action. However, analysis of the judgment provides useful insight into the status of Australian climate law and the extent to which the law continues to fail to grapple with the unique and complex issues of climate justice.<\/p>\n

The ACCR alleged that in a series of corporate reports published between 2020 and 2021, Santos had made three key categories of misrepresentations that:<\/p>\n

\u2013 Santos is a producer of \u2018clean energy\u2019 and that natural gas provides \u2018clean energy\u2019.<\/p>\n

\u2013 Santos had a \u2018credible and clear\u2019 plan, based upon reasonable assumptions, for reducing emissions in line with its 2030 and 2040 targets forming part of a \u2018Net Zero Roadmap\u2019.<\/p>\n

\u2013 Santos could, in the future, deliver \u2018zero-emissions\u2019 or \u2018clean\u2019 hydrogen, and hydrogen with \u2018no emissions in its production\u2019, while intending to produce \u2018blue hydrogen\u2019 from fossil gas.<\/p>\n

The case represented a first-of-its-kind legal test of the credibility of a fossil fuel company\u2019s climate transition plans, particularly one that relies heavily on carbon capture and storage (CCS) technologies and carbon offsets.<\/p>\n

Much of ACCR\u2019s case centred on what it alleged were the unreasonable assumptions that Santos had made about its future business, including the future viability of CCS technologies, the size of the future market for hydrogen and the basis on which it claimed gas was a source of \u2018clean energy\u2019.<\/p>\n

ACCR also alleged that Santos had made a series of material omissions from its corporate reports, including those that concealed the impacts that its plans to increase the production of gas would have on the company\u2019s future emissions and that Santos\u2019 plan to achieve its emissions reduction targets was heavily reliant on the use of carbon offsets.<\/p>\n

What is the law?<\/p>\n

While the term \u2018greenwashing\u2019 does not appear in any corporate legislation,\u00a0the act of greenwashing<\/a>\u00a0is effectively rendered unlawful by laws that protect against misleading or deceptive conduct or representations.<\/p>\n

Various laws protect different groups from different types of misleading representations. For instance, the Australian Consumer Law is primarily focused on protecting the buyers of products or services from misleading claims and many of the provisions of the\u00a0Corporations Act\u00a0are designed to protect shareholders from misrepresentations about the prospects of the businesses in which they are invested.<\/p>\n

In many cases, a key factor in determining whether a claim is misleading is a test of whether a person or company had \u2018reasonable grounds\u2019 for making that claim. If someone doesn\u2019t have \u2018reasonable grounds\u2019 for a claim, then the claim is likely to be deemed misleading or deceptive.<\/p>\n

The \u2018reasonable grounds\u2019 test was considered throughout the\u00a0ACCR v Santos\u00a0judgment in assessing whether the gas company\u2019s claims were misleading. Much of the court\u2019s focus was on whether Santos had sufficient contemporaneous documentation of its decision making processes and the evidence it relied upon to make the statements it did.<\/p>\n

What did the Federal Court conclude?<\/p>\n

In short, the Federal Court accepted virtually all of the counterarguments put forward by Santos and found that none of the issues raised by ACCR amounted to misleading or deceptive conduct. ACCR\u2019s case was dismissed in its entirety, and ACCR was ordered to pay Santos\u2019 legal costs.<\/p>\n

Gas is clean and Santos is a clean fuels company<\/p>\n

One of the more contentious conclusions of the Federal Court judgment is the acceptance of Santos\u2019 claim that gas is a \u2018clean energy\u2019 source and that the company is a \u2018clean fuel producer\u2019.<\/p>\n

In finding those claims were not misleading, the court accepted that Santos had made it sufficiently clear that gas was being called \u2018clean\u2019 in comparison to other fossil fuels. The court found the \u2018statement does not convey that natural gas is \u201cclean\u201d but that it is in relative terms cleaner than coal and diesel.\u2019<\/p>\n

The court concluded that a \u2018reasonable member of the target audience would have understood that consumption of natural gas was a material contributor of GHG emissions\u2019 \u2013 in other words, those reading Santos\u2019 statements would have understood that Santos\u2019 use of the term \u2018clean energy\u2019 did not imply that gas produced zero emissions.<\/p>\n

The court also found that Santos\u2019 description of itself as a \u2018clean fuels company\u2019 was not misleading, because Santos had the ambition of producing lower emissions fuels in the future:<\/p>\n

\u2018the description by Santos of it as a \u201cclean fuels company\u201d was made in the context of its statements about the \u201ctransition to a lower-carbon future\u201d and \u201cthe transition from natural gas to hydrogen.\u201d That and the associated statement of Santos as a \u201cclean fuels business\u201d spoke of Santos\u2019 future aims. That is, as Santos put it, the type of company that Santos wanted to be as it transitioned to net zero by 2040.\u2019\u00a0\u2013 at [521].<\/p>\n

A Clear and Credible Plan to Net Zero<\/p>\n

Santos\u2019 corporate documents outlined what it described as a \u2018clear and credible roadmap\u2019 for achieving net zero by 2040, backed up by \u2018a realistic, doable plan\u2019 and that it was a \u2018realistic roadmap, real activities and a plan to achieve net zero by 2040.\u2019<\/p>\n

This plan was largely predicated on Santos making significant progress in three key areas: being able to maintain its level of gas production while reducing emissions, expanding the use of carbon capture and storage technologies, and substantial growth in the market for net zero emissions hydrogen. It was also heavily reliant on the use of carbon offsets to meet targets.<\/p>\n

ACCR alleged that Santos\u2019 plan fell considerably short of being \u2018clear and credible\u2019, and that parts of the plan presented to shareholders were contradictory to what Santos\u2019 own analysts were recommending.<\/p>\n

Crucially, the court held that despite calling it a \u2018clear and credible\u2019 plan that was \u2018realistic and doable\u2019, that none of these statements amounted to a promise to actually deliver the plan.<\/p>\n

\u2018The impugned statements concern Santos\u2019 long-term objectives which necessarily and reasonably remained subject to uncertainty and contingencies and dependent upon the emergence of new markets.<\/p>\n

The target audience would understand expressions like \u201crealistic and doable\u201d or \u201cclear and credible\u201d as measured descriptors setting expectations lower than certainty. That a plan is realistic suggests that it can be achieved but not that it will be achieved.\u2019 \u2013 at [828-829].<\/p>\n

CEOs and Senior Executives have singificant discretion<\/p>\n

The fluid nature of Santos\u2019 \u2018net zero roadmap\u2019 was made clear in correspondence between senior Santos staff and its executives, and the manner by which the company produced forecasts of its future emissions and gas production.<\/p>\n

While preparing a draft investor presentation outlining Santos\u2019 net zero strategy, analysts within Santos produced a chart of future gas production and greenhouse gas emissions. The first version of this chart showed Santos\u2019 future emissions rising in future years, corresponding to increases in forecast gas production.<\/p>\n

This forecast was based on the analyst\u2019s understanding of which projects Santos was likely to develop in the future, and the logical conclusion that increasing gas production would lead to higher company emissions.<\/p>\n

But, when this chart was reviewed by Santos CEO Kevin Gallagher, changes were ordered. Emissions had to be flat, and so must gas production.<\/p>\n

\"\"\/Draft Santos slide with handwritten comments from CEO Kevin Gallagher. Note the title \u2018Santos\u2019 emissions increase to 2030 with production growth\u2019.<\/p>\n

ACCR alleged that Santos had no reasonable grounds for assuming that both its emissions and gas production would remain flat out to 2035. Evidence showed Santos\u2019 internal teams were forecasting increases in both metrics and the \u2018flatline\u2019 scenario that Santos ultimately published was purely based on the request from Gallagher. Internal correspondence showed that at least one analyst thought there was \u2018effectively no basis\u2019 for the flatline forecast.<\/p>\n

However, the Federal Court ruled that this did not mean the revised presentation was misleading or deceptive. Accepting Santos\u2019 arguments, the court concluded that it is within the remit of CEOs and other senior executives to amend the findings of their own analysts. Stating at [643]:<\/p>\n

\u2018Strategic decisions about production and emissions were made by the CEO and senior executives and not by more junior employees \u2026 Unsurprisingly, intervening strategic decisions may need to be made after preparation of the data. That is what occurred in 2020 with the development of the Targets and the Net Zero Roadmap.\u2019<\/p>\n

What does this mean for corporate accountability?<\/p>\n

On the surface, the case was a victory for Santos. Companies have significant flexibility when outlining their net zero targets and climate transition plans. Companies can consider the inherent uncertainty and evolving nature of future policies, markets and technologies as factoring into what constitutes \u2018reasonable grounds\u2019 for those plans.<\/p>\n

However, what the judgment really highlights is the extent to which \u2018the law\u2019 is a blunt tool for holding companies accountable for climate harms and delivering climate justice.<\/p>\n

This is not a new understanding.\u00a0Prior Australian climate cases<\/a>\u00a0have highlighted the extent to which the current law fails to adequately grapple with the evolving, complex and unique challenge of climate change. Climate litigation only emerged as a distinct area of\u00a0legal practice within the last two decades<\/a>.<\/p>\n

Part of the reason for this is that the fossil fuel industry actively works to prevent the emergence of new climate law. The fossil fuel industry knows it is on the wrong side of climate justice. It is in its (short-term) financial interest to maintain the legal status quo.<\/p>\n

It is why\u00a0it attacks groups like ACCR and the lawyers that represent them<\/a>. It is why companies like Santos\u00a0target environmental law firms with SLAPP tactics<\/a>.<\/p>\n

Did ACCR succeed in its greenwashing claim against Santos? No.<\/p>\n

But the judgment reinforced factual findings that the use of fossil gas is a contributor to global emissions and worsening global warming. Santos\u2019 representations might not be misleading, but that does not mean the company\u2019s actions are an adequate response to the climate crisis that we face,\u00a0and to which it is a major contributor<\/a>.<\/p>\n

The law will continue to evolve and the pressure on fossil fuel companies will continue to grow.<\/p>\n

This article was originally published on Tempests and Terawatts. Reproduced here with permission. Read the original version here<\/a>.<\/p>\n

<\/p>\n

Michael Mazengarb is a climate and energy policy analyst with more than 15 years of professional experience, including as a contributor to Renew Economy. He writes at Tempests and Terawatts.<\/p>\n","protected":false},"excerpt":{"rendered":"The judgment in the long-running greenwashing case brought against Australian gas producer Santos \u2013\u00a0published earlier this week\u00a0\u2013 was,…\n","protected":false},"author":2,"featured_media":507665,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[64,63,75,128],"class_list":["post-507664","post","type-post","status-publish","format-standard","has-post-thumbnail","category-environment","tag-au","tag-australia","tag-environment","tag-science"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/507664","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=507664"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/507664\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/507665"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=507664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=507664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=507664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}