The Federal Court of Australia has dismissed greenwashing claims brought by the Australian Centre for Corporate Responsibility’s (ACCR) against Australian energy company, Santos Limited.^[i] 

To read Litigation Senior Associate, Alice Poole’s interview with BusinessDesk on this case and it’s implications for businesses, click here [paywall] Dismissal of Santos greenwashing case not a signal for complacency | BusinessDesk

Snapshot

The proceeding was widely regarded as the first case globally to allege that a company’s net zero target itself was misleading, rather than merely inadequate. 

The Court found that Santos’ description 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 target audience. 

The decision is significant for companies making sustainability-related claims, setting emissions targets or applying environmental labels. It confirms that: 

• context is critical;
• audience matters;
• future-facing claims must be supported by reasonable grounds; and
• sustainability language continues to evolve. 

For New Zealand businesses navigating climate-related disclosures and sustainability messaging, the case provides both reassurance and practical guidance on how to frame defensible claims. 

The case in brief

ACCR commenced proceedings against Santos in August 2021, alleging that statements in Santos’ 2020 Investor Day Presentation, 2020 Annual Report, and 2021 Climate Change Report were misleading and deceptive under Australian Consumer Law and the Australian Corporations Act. 

ACCR alleged Santos misrepresented that it:

• had a “clear and credible” plan to reduce Scope 1 and 2 greenhouse gas emissions by 26% to 30% by 2030 and achieve net zero by 2040; and
• was a producer of “clean energy”, including by describing natural gas as “blue hydrogen”, “clean” or “zero emissions”.

On 17 February 2026, the Federal Court dismissed the claims in full and ordered ACCR to pay Santos’ costs. ACCR has not publicly disclosed whether it intends to appeal the decision. 

Why Santos succeeded

Whether a representation is misleading or deceptive in Australia depends on its likely effect on the target audience, assessed in context. The approach mirrors the position in New Zealand. 

The Court’s decision turned on its factual findings, including that: 

• at the time the statements were made (2020 - 2021), terms such as “clean energy” and “clean fuel” did not have settled or precise meanings in the Australian energy industry; Read in context, including alongside references to the “energy transition to lower carbon fuels”, a reasonable member of the target audience (in this case, a reasonable investor with general and not expert knowledge) would have understood “clean” as a comparative and aspirational descriptor rather than an absolute one; 
• similarly, “clean hydrogen” and “zero-emissions hydrogen” were not understood as meaning no production emissions, but rather hydrogen produced from natural gas with “no net emissions”; and
• Santos had reasonable grounds for its climate targets, including transparent disclosure of its reliance on offsets, and a reasonable investor would have understand that “net zero” allowed for the use of offsets. 

What this means for your organisation

This decision offers practical guidance for companies making climate-related disclosures, emissions targets and sustainability claims. 

1. Context is crucial
   Terms such as “clean”, “zero-emissions” and “net zero” will be assessed in light of surrounding disclosures, industry context, timing and audience. Sustainability claims should be appropriately framed and qualified. 
2. Target audience matters
   The Court considered the likely audience to be a broad group of investors with general (not expert level) knowledge of the energy transition. Companies should assess how their intended audience is likely to interpret their sustainability messaging.
3. Document reasonable grounds
   Forward-looking claims must be supported by reasonable grounds. Santos succeeded because its targets were supported by extensive internal analysis, board engagement, and expert input. Climate targets should be robustly supported and documented. 
4. Language continues to evolve
   While the lack of settled terminology at the time of the representations assisted Santos, regulatory standards and market expectations are continuing to develop. Arguments that succeeded in this case may not be available for statements made today. Companies should regularly review and update their language to reflect evolving expectations and standards. 
5. Greenwashing risk remains
   This decision does not signal that sustainability statements are safe from scrutiny. It reflects the Court’s assessment that, on the facts of this case, Santos’ disclosures were not misleading. 

Get in touch 

For more guidance on how your business can mitigate greenwashing claims see our previous article or contact one of our experts.

Special thanks to Achi Simhony for her assistance in writing this article.