One of Australia's largest oil and gas companies is being taken to court over claims of 'greenwashing' its clean energy credentials.
Santos is being accused by shareholder activist group the Australasian Centre for Corporate Responsibility (ACCR) of engaging in misleading or deceptive conduct relating to its "clean energy" claims and its net zero plan in its 2020 annual report.
The ACCR launched the case in the Federal Court last year but has now expanded its allegations to include comments made during a Santos investor day briefing and in its 2021 Climate Change Report.
The case is the first of its kind in the world to challenge the veracity of a company's net zero emissions target, according to the ACCR.
At the same time, the financial regulator Australian Securities and Investments Commission (ASIC) has confirmed it is in the early stages of investigating a number of listed entities, super funds, and managed funds for potential 'greenwashing'.
According to ASIC, greenwashing is "the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical".
ACCR executive director Brynn O'Brien said "the climate crisis requires everyone to take credible action … there is no room for exaggerating claims about decarbonisation in this moment".
"Investors have an expectation of accurate information going into the market, investors are making billion-dollar investments in companies on the basis of information they put out," Ms O'Brien said.
"So optimism is one thing, but misleading the market is another. It is our allegation that Santos, in these statements, has engaged in misleading or deceptive conduct."
The ACCR filed further allegations after reviewing documents submitted by Santos as part of the litigation process.
"We are concerned about the role that carbon capture and storage plays in Santos's future plans and the viability of the deployment of that technology," Ms O'Brien said.
"We are also concerned about the claims Santos has made about the role of blue hydrogen in decarbonisation."
Santos did not respond to ABC Rural's request for comment.
The company has pledged to achieve net zero carbon emissions in its scope 1 and 2 emissions by 2040.
Santos is working on a $220 million carbon capture and storage (CCS) project at Moomba in South Australia's far north and is expected to make a final investment decision on if it will go ahead with the world's largest CCS project, off the NT coast, in 2023.
ASIC keeping an eye on climate commitments
ASIC has made clear it is keeping a close eye on the climate change commitments being made by corporate Australia.
In June, the regulator published an information sheet reminding corporations of their responsibilities for disclosing information about their sustainability-related products.
In a speech last week, ASIC chair Joseph Longo said, "there has been a proliferation of investment products and companies appealing to consumers with sustainable or 'green' investments and 'net zero' emission promises".
"If you make net zero claims, you must have substance behind those claims.
"Aspiration on its own is not enough — the bar is set much higher.
"We want to ensure that firms moving towards net zero do so with integrity — fostering trust and practising transparency."
The Environment Centre NT's Kirsty Howey said for companies to maintain a social licence it was important they were being accurate about their climate actions.
"As interest and pressure in relation to climate change increases in Australia and internationally, it is absolutely paramount for companies to be truthful about their reporting, including in relation to emissions, and not to be misleading the public or shareholders," Ms Howey said.
"What this case is doing is attempting to shine a legal spotlight on these claims to ascertain if they stack up or whether they're misleading or deceptive."
