Greenwashing suits are becoming more commonplace as consumers and regulators hold companies’ feet to the fire on sustainability claims. In Australia, a greenwashing case against energy company Santos is headed to trial and shareholders are behind the litigation. We don’t often see shareholders bringing greenwashing litigation, but in this case an activist shareholder, the Australasian Centere for Corporate Responsibility (ACCR), brought the suit. The Guardian recently reported:
“A world-first greenwashing case that seeks to hold oil and gas company Santos accountable for its net zero commitments began in the federal court today, brought by one of its own shareholders, the Australasian Centre for Corporate Responsibility (ACCR).
The organisation claims Santos did not have a proper basis for saying it had a clear pathway to reduce emissions by 26% to 30% by 2030 and reach net zero by 2040, which constituted misleading or deceptive conduct in breach of Australian corporate and consumer laws.”
Santos is arguing that their net zero 2040 goals were targets and not promises. How the court receives these arguments will unfold over the 13-day trial. If this lawsuit goes in ACCR’s favor, activist shareholders may become bigger players in greenwashing litigation – although the effects may not reach beyond Australia. Similar efforts have been shut down in other parts of the world, making it unclear if this strategy can work outside of the Australian court system. In any event, it is clear that with ESG proxies pulling less support in recent years, activist shareholders will be looking for new and innovative ways to bring change to the companies they hold an interest in.
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Photo credit: Timon – stock.adobe.com
