The Federal Court has dismissed greenwashing claims brought by the Australasian Centre for Corporate Responsibility (ACCR) against Santos.
The Court found that Santos' descriptions of natural gas as "clean energy" and its 2040 net zero target were not misleading when read in context and from the perspective of the relevant target audience.
This is an important decision for any company sustainability-related claims, setting emissions targets, or labelling products with certain claims.
It confirms that context is critical, audience matters, future targets must be backed by reasonable grounds, and common terminology is evolving and must be kept in mind.
While Santos was successful, the case highlights how closely courts and regulators will scrutinise climate claims.
Now is a good time for companies to review their climate targets and supporting assumptions, assess whether their sustainability language aligns with current regulatory expectations, test whether a reasonable investor would clearly understand pathway and limitations, and ensure board and management oversight is appropriately documented.
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