Why the federal court case against Santos could have wide-reaching ramifications

Acting on behalf of shareholder advocacy organisation, the Australasian Centre for Corporate Responsibility (ACCR), the Environmental Defenders Office in August filed a federal court case against Australia’s largest gas supplier, Santos. It’s claiming the oil and gas giant’s branding of itself as “clean energy” provider on the path to net zero by 2040 is not credible and constitutes deceptive conduct under Australian consumer law.

It is the first court case in the world to challenge the veracity of a company’s net zero targets by applying longstanding consumer laws. The case is seeking to expose corporate greenwashing and legally scrutinise the promises of carbon capture and storage technologies and blue hydrogen which numerous fossil fuel companies rely on in their planned pathways to net zero.

While the case, which had its first court date today, only seeks to challenge the claims made by single company, Brynn O’Brien, the Executive Director of the ACCR, told pv magazine Australia the proceedings could have broad implications, which might just reach all the way down to how companies are permitted to use language.

Using consumer laws for climate

The case rests on Australia’s well established consumer laws which prohibit companies from misleading and deceptive conduct. “It’s the application of those laws that is novel,” Elaine Johnson, the Environmental Defenders Office’s Director of Legal Strategy, told pv magazine Australia.

Basically, the case is seeking to use those laws to expose greenwashing, which is when companies give a false impression of their sustainability practices. O’Brien described greenwashing in Australian corporations’ climate commitments as a “massive issue”.

For instance, Santos claims it has a pathway to net zero despite the fact it is actually expanding its fossil fuel operations in coming years. It is far from the only company to do so, with other major players like Origin following suit.

This outward touting of sustainability while continuing to pursue projects which emit carbon dioxide, O’Brien said, gives investors and society a false sense of security and hope, signalling corporations have the matter at hand “when that is so far from the case”.

Just last Friday, Greenpeace released its report Hero to zero: uncovering the truth of corporate Australia’s climate action claims, which came to a similar conclusion. It found that while 80 of Australia’s top emitting companies have now set net zero targets, just 16 had actually committed to reducing emissions from their operations by switching to 100% renewable electricity.

The Santos case, O’Brien hopes, will be something of a fact finding exercise – putting these abstract targets under real legal scrutiny to uncover credibility and therefore open the door for other companies to have their claims challenged through the court system.

Setting a precedent

Santos is far from alone in its touting of gas as a “clean” energy source, with our very own federal government using the same language.

O’Brien said she believes Australia has a serious problem around language use. “It’s untruthful for the government to say gas or fossil hydrogen is clean,” she said. “It’s just not right.”

Right as in scientifically sound. Which is why the ACCR believes Santos’ and indeed perhaps other bodies use of words could be classed as legally deceptive.

Johnson agrees, saying that under the law consumers are entitled to information that is supportable. “[It’s] important to ensure there is truth in advertising and communication,” the EDO director said.

She believes the world is on the cusp of an explosion of climate litigation, with all kinds of avenues to be pursued as governments and corporations either drag their heels or make claims they either can’t or won’t back up with real action.

“The courts are a place often of last resort, so when people and society and communities feel they can’t get justice and equity through other courses of engaging in dialogue, then courts are the places these issues ultimately end up and we’re seeing this with climate change,” Johnson said.