ESG Enforcement Tracker

Key facts:

In August 2021, the Australasian Centre for Corporate Responsibility (ACCR) filed a claim in the Australia Federal Court against Australian oil and gas company Santos over alleged greenwashing statements made in its 2020 Annual Report.

The ACCR said that Santos’ claims that natural gas provides “clean energy” and that it has a “credible and clear plan” to achieve “net zero” emissions by 2040 are misleading under the Australian Corporations Act 2001 and the Australian Consumer Law.

The ACCR had said at the time that this was “the first court case in the world to challenge the veracity of a company’s net emission target”.

On 17 February 2026, the Federal Court dismissed the greenwashing case brought by ACCR, awarding costs to Santos.  It found that Santos had not engaged in misleading or deceptive conduct in its 2020 Annual Report, 2020 Investor Day Briefing and 2021 Climate Change Report.

The Court heard the matter over three weeks in October, November and December 2024.  In response to ACCR’s allegations, Santos told the court its climate targets represented “present intention” rather than “a promise or prediction.” 

Justice Brigitte Markovic dismissed the case and ordered ACCR to pay Santos’ costs.  The Co-CEO of ACCR, Brynn O’Brien, commented “It has been a David versus Goliath battle and Goliath won this round.”  The reasons for the decision will be published later this month. 

The reasons for the decision were published on 23 February 2026. They have been described in the legal commentary as a “blockbuster, both in length and significance.” The court reiterated the well-established test for establishing whether conduct is misleading or deceptive, as follows:

“[F]irst, identifying with precision the ‘conduct’ said to contravene [section] 18; second, considering whether the identified conduct was conduct ‘in trade or commerce’; third, considering what meaning that conduct conveyed; and fourth, determining whether that conduct in light of that meaning was ‘misleading or deceptive or … likely to mislead or deceive’.”

Justice Markovic found that Santos’ statements were not misleading when assessed in context and from the perspective of reasonable member of the target audience, who would understand terms like “clean energy” and “zero‑emissions hydrogen” as relative or net concepts, not literal claims of zero emissions.

The court held that net zero statements are statements as to future matters, which require companies to establish that there was a reasonable basis for the statement at the time that it was made. The judge accepted evidence that long-range environmental targets “necessarily involve assumptions about external future contingencies and do not require a basis only in existing, objective or verifiable facts.”  The court found that Santos’ 2030 and 2040 climate targets were forward‑looking statements supported by reasonable contemporaneous grounds, reflecting established law that companies need a reasonable basis, not certainty, when articulating long‑term climate goals.

Finally, the judge accepted that Santos’ Net Zero Roadmap appropriately conveyed uncertainty. Carbon capture and storage, offsets and emerging hydrogen technologies were framed as contingent elements of a long‑term transition pathway; the plan was not misleading simply because it depended on future market and technological developments.