Today Justice Markovic published her reasons for judgment in the case of ACCR v Santos Ltd.

The case contended that Santos Ltd had engaged in misleading or deceptive conduct in its 2020 Annual Report, 2020 Investor Day Briefing and 2021 Climate Change Report.

Commenting on the Court’s reasons for dismissing the case, Brynn O’Brien, Co-CEO of ACCR said:

“This case was always about market integrity and ensuring rigour in disclosures.

“Santos is immensely capable of long-term planning and analysis, and investors expect that expertise to be applied to climate risk and mitigation.

“This was the first court case in the world to test a company’s net zero claims, and it has helped drive significant improvements in climate reporting in the Australian market and internationally. It is disappointing that, in our view, the Court’s decision has not reinforced these advancements.

“Santos argued, and the Judge accepted, that it was not misleading in the circumstances for Santos to say:

  • ‘clean fuel’ in relation to gas to convey that gas is ‘cleaner than coal and diesel’ on consumption;
  • ‘zero emissions hydrogen’ to convey ‘hydrogen produced from natural gas with CCS and offsets’;
  • it had ‘a realistic roadmap, real activities and a plan to achieve net zero by 2040’ in the context of announcing a ‘long-term target that predicts what Santos can do if markets, technologies and regulatory regimes emerge as anticipated’.

“While we respect the judgment of the Court on this matter, and accept the findings that Santos did not engage in wrongdoing, our view is that the nature of this clarification of Australian consumer and corporations law puts an enormous burden on investors to interrogate the true meaning of corporate disclosures, including ambiguous language and assumptions.

“This was an important case. Whether the ruling ultimately helps or hinders companies trying to convince investors of their climate strategies remains to be seen. We will take time to review it carefully before considering next steps and our options.”

Background

In 2021, the Australasian Centre for Corporate Responsibility (ACCR) represented by the Environmental Defenders Office along with Noel Hutley SC, Sebastian Hartford-Davis, Jerome Entwisle and Zoe Bush, commenced landmark proceedings in the Federal Court alleging that Santos Ltd breached provisions of the Corporations Act 2001 (Cth) and the Australian Consumer Law by engaging in misleading or deceptive conduct relating to representations in its 2020 Annual Report, 2020 Investor Day Briefing and 2021 Climate Change Report.

This was the first court case in the world to challenge the veracity of a company’s ‘clean energy’ claims and its pathway to net zero.

The key allegations of misleading and deceptive conduct concerned three major areas:

  • representations that Santos is a producer of “clean energy” and that natural gas is a “clean fuel”.
  • representations that hydrogen produced by Santos from natural gas with carbon capture and storage (blue hydrogen) is “clean hydrogen” and “zero emissions hydrogen”.
  • representations that Santos had a clear and credible pathway to ‘net zero’ by 2040.

The Court heard the matter over three weeks in October, November and December 2024.

The ruling can be found at : https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2026/2026fca0096

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