Australian gas producer Santos wins court fight over net zero claims

A court in Australia dismissed a lawsuit filed against the gas producer Santos on Tuesday. The suit alleged that the company had misled the public about its plans to achieve "net zero carbon emission". The Australasian Center for Corporate Responsibility (an activist shareholder) filed the lawsuit in 2021. It claimed it was the first of its kind to challenge a company's target of net zero carbon emissions in any country.

Companies around the globe have set ambitious targets to become carbon neutral in the next 20-30 years.

The Federal Court of Australia case was closely followed because of its potential implications on how legal action could be used to hold corporations accountable for their climate goals.

ACCR claimed that Santos had violated Australia's Corporations and Consumer laws by engaging in?misleading or deceptive behavior? when it stated it had a?clear?pathway? to reduce emissions by 26-30% by 2030 and reach zero emissions by 2040.

The group also disputed Santos’ claims that it was a manufacturer of “clean energy”, that natural gas is a “clean fuel” and that the hydrogen produced by Santos from natural gas using carbon capture and storage was both "clean" and "zero emission".

ACCR asked the court that Santos refrain from misleading or deceptive conduct in the future and correct any statements made by the company.

The Federal Court of Australia judge Brigitte Markovic dismissed the case. Her reasons will be published on 23 February.

Brynn o'Brien, the co-chief executive of the ACCR, said the result was disappointing and that the group would review the decision before deciding its next step.

She said that the case was "a landmark" and opened the door for other corporations to challenge net zero claims.

It was a David-versus-Goliath fight and Goliath has won this round."

O'Brien said that the decision meant it was the investors responsibility to "scrutinise each statement, every number, and every assumption made by companies regarding climate commitments".

Santos didn't immediately respond to our request for comment.

(source: Reuters)