What the Santos Greenwashing Case Decided
by Sustainability Tracker 12/08/2026
News
by Sustainability Tracker 12/08/2026
News
This article was contributed by Sustainability Tracker.
On 17 February 2026, the Federal Court of Australia handed down its judgment in Australasian Centre for Corporate Responsibility v Santos Limited [2026] FCA 96, the first case anywhere in the world to test the integrity of a company’s forward-looking net zero claims in court. The Australasian Centre for Corporate Responsibility (ACCR) had alleged that Santos misled investors through its net zero and emissions reduction claims. Justice Markovic dismissed all of the claims. For businesses making sustainability claims of their own, the result is worth understanding properly, because the reasoning behind it matters more than the headline.
ACCR’s case, first brought in August 2021, centred on statements in Santos’ 2020 investor day presentation, 2020 annual report, and 2021 climate change report. The claims at issue were that Santos had a clear and credible plan to cut Scope 1 and 2 emissions by 26 to 30 percent by 2030 and reach net zero by 2040, and that natural gas produced by the company could be described using terms like “clean energy” and “zero emissions.” ACCR argued these statements were misleading and deceptive under the Australian Consumer Law and the Corporations Act 2001.
The judgment opens with its own definition of greenwashing: a company making itself, its products, or its services appear more environmentally friendly, sustainable, or ethical than they are in fact. Working from that definition, the Court examined whether Santos’ forward-looking statements had a reasonable basis at the time they were made, and found that they did. Justice Markovic found the terms “clean” and “clean energy” had no settled, precise meaning in the Australian energy industry at the relevant time, and that the target audience, a broad, diverse group of individual and institutional investors who weren’t assumed to have scientific or technical training, would have understood the statements in that context. The Court ordered ACCR to pay Santos’ costs.
That’s a meaningful outcome for how forward-looking climate statements get treated in Australian courts, and it offers a degree of reassurance for companies making genuine, evidence-based projections about their transition plans. It is not a signal that scrutiny of climate claims is easing. ACCR has since appealed the decision, arguing the legal issues raised warrant clarification by an appellate court.
Reading this case as a green light for looser climate marketing would be a misreading of it. The judgment turned on whether Santos could substantiate its statements with a reasonable basis at the time they were made, not on whether the statements themselves were aspirational or bold. The test the Court applied is the same test that trips up most greenwashing findings elsewhere: can you show your working?
That’s precisely why 2025 and 2026 have otherwise been active enforcement years. The ACCC secured an $8.25 million penalty over “ocean plastic” claims on kitchen and garbage bags where the plastic in question was sourced a considerable distance from any ocean, and has separately pursued action over “reef friendly” sunscreen marketing and claims about the future renewable status of gas. The ACCC has confirmed greenwashing remains a compliance and enforcement priority into 2026-27, and a Senate inquiry into greenwashing, examining whether further legislative reform is needed, was due to hand down its final report by 25 June 2026.
The Santos outcome and the ACCC’s enforcement record are two sides of the same standard. A claim survives scrutiny when it’s built on a reasonable, documented basis and falls over when it isn’t. Vague or aspirational language without a substantiation trail behind it remains exactly as risky as it was before this judgment, arguably more so now that a court has articulated what “reasonable basis” looks like in practice.
For businesses reviewing their own sustainability claims in light of this case, the useful exercise isn’t asking whether a statement sounds credible. It’s asking whether you could produce the evidence behind it if a regulator, a shareholder advocacy group, or a journalist asked you to. That’s the exact discipline behind Sustainability Tracker’s FACTS framework (Facts, Appearance, Context, Transparency, Substantiation) and our Compass tool for identifying greenwashing risk before it becomes a legal or reputational problem.
With AASB S2 mandatory climate reporting now extending to a much wider group of Australian businesses, forward-looking climate statements are only going to face more scrutiny, not less. Getting the evidence base right now is considerably cheaper than defending it later.
This article reflects the Federal Court of Australia’s judgment in ACCR v Santos [2026] FCA 96, handed down 17 February 2026. It is general information, not legal advice; businesses should seek professional advice specific to their circumstances.