Santos appeared in New South Wales Federal Court today for the first day of its trial, part of a lawsuit claiming it misled investors about its climate impact targets.
Brought by the Australasian Centre for Corporate Responsibility (ACCR), a shareholder advocacy group, the lawsuit argues Santos falsely claimed the company would reach net zero emissions by 2040.
The suit “alleges that Santos failed to disclose that it has firm plans to increase its greenhouse gas emissions through expected oil and gas growth and exploration opportunities beyond 2025,” according to the ACCR.
This lawsuit also contends that Santos misrepresented its blue hydrogen projects, promising these efforts would be emissions-free.
In court today, the ACCR’s barrister, Noel Hutley, noted that Santos claimed to have a pathway to net zero emissions by 2040 in its 2020 Annual Report. “We will be submitting that Santos lacked reasonable grounds for making these statements,” he said.
Santos' barrister, Neil Young, responded that the Annual Report "is a long term document setting out strategic targets, whose purpose is to identify those targets so as to incentivise the company and its executives to work towards the achievement of those targets.”
”It was made very clear that some of the elements depended totally on the development of a market that did not currently exist," he said.
The ACCR first began proceedings against Santos in 2021, arguing Santos had violated Australian law by engaging in misleading or deceptive conduct.
In this suit, it is seeking an injunction preventing Santos from “engaging in the same misleading or deceptive conduct in the future”, as well as a corrective statement from the company about its environmental impact.
The trial will end on November 15.
Santos’ (ASX: STO) share price stood at A$6.89 as of 3:51 pm AEDT, down from its previous close at $6.93. Its market cap is A$22.4 billion.