Santos sued for ‘clean fuel’ claims and net zero by 2040 target despite plans for fossil fuel expansion
Australian oil giant is being accused of trying to ‘greenwash’ their operations to appeal to investors
A shareholder activist group is taking Australian oil company Santos to court over its claims it produces “clean fuel” and plans to reach net zero emissions by 2040.
Papers were filed against Santos – Australia’s second largest independent oil company – on Thursday by the Environmental Defenders Officers acting on behalf of the Australasian Centre for Corporate Responsibility.
Court documents make two claims against the company; the first concerning statements Santos made in its 2020 annual report where it claimed natural gas is a “clean fuel” that provides “clean energy”.
ACCR argues this is a misrepresentation as the extraction of natural gas involves the release of “significant quantities of carbon dioxide and methane into the atmosphere”.
The second part of the lawsuit takes aim at statements by Santos that it had a “clear and credible” plan to achieve net zero emissions by 2040 by relying on carbon capture and storage (CCS).
ACCR argues reliance on CCS to achieve net zero is not credible as Santos has made “a range of undisclosed qualifications and assumptions about CCS processes” while also seeking to massively expand the extraction of fossil fuels over time.
Dan Goucher, ACCR’s Director of Climate and Environment, said the litigation was important to challenge oil and gas companies where it appears they are trying to “greenwash their operations”.
“We read annual reports and sustainability reports from a range of companies every day. And some of these claims are completely unjustified,” Gocher said. “The key point for us I guess is that it’s become very difficult for any investor to differentiate between companies making genuine claims and companies that are not genuine.”
Gocher said that both institutional investors and retail investors implicitly trust statements made by companies in their corporate documents and that it was important these are truthful.
“I’d say there’s a fairly significant number of Santos shareholders that are convinced its actions are genuine. We don’t believe they are genuine,” Gocher said. “They intend to produce oil and gas beyond 2040.”
Santos was contacted for comment but a spokesperson for the company said “it would not be appropriate for Santos to comment on matters before the court”.
Dr Laura Schuijers, a senior research fellow with the University of Melbourne, said the direct challenge to Santos makes it “one to watch” following a string of recent climate change related litigations.
“Big oil and gas companies are in the spotlight at the moment,” Dr Schuijers said. “The risk of being sued, litigation risk, is already significant enough. People don’t want to invest in companies that are potentially seen to be a liability.”
As the legal pressure mounts others are now calling on the finance sector to step up.
On Thursday, environmental finance group Market Forces published an analysis showing Australian super funds have pulled $2.5bn from high carbon emitting companies like BHP, Woodside and Santos since 2018.
The figure was obtained by calculations using disclosure documents from 10 of the largest 30 super funds to check their equity holdings for investments in 23 fossil fuel companies.
Extrapolated across the entire sector, it was estimated $5bn had been pulled from oil companies since 2018 – a figure Wil van der Pol from Market Forces said was a good start but needed to happen faster.
“Any company pursuing fossil fuel expansion doesn’t deserve any support from Australian super funds,” van der Pol said. “We’d like to see the flight of capital from these companies turn from a solid trickle to a raging torrent.”
Extracted from The Guardian