In more greenwashing news, Australian energy company Santos also won its high-profile greenwashing case. Plaintiffs in this case argued that Santos misled investors when it set emissions reduction targets in 2020. Those targets failed to materialize, and shareholders sued, arguing that no clear path to those reductions existed. The Federal Court of Australia disagreed, finding that Santos’ targets were reasonable future-looking statements. A memo from A&O Shearman discusses the court’s reasoning:
“The court also considered the reasonableness of Santos’ 2030 target and net-zero roadmap, conducting a detailed analysis of evidence adduced by Santos supporting the targets. This included analyzing the reasonableness of Santos’ assertions that carbon capture and storage would be used to avoid or abate emissions. Importantly, the court found the following:
- Santos had reasonable grounds for its baseline emissions assumptions, and for its assumptions regarding hydrogen with carbon capture and storage forming part of its roadmap to net-zero emissions.
- The relevant targets were the product of years of strategic development regarding a potential market for hydrogen and were not rushed decisions.
- Santos’ net-zero roadmap was presented in a way that conveyed an appropriate level of uncertainty and flexibility.
- Santos had clearly indicated that certain activities, such as expansion of carbon capture and storage, were “planned” and conditional.”
I’ve written before about how US securities law treats forward-looking statements. It’s harder for shareholders to argue that these are misleading because the future is uncertain. We’ve seen several cases filed arguing that net-zero targets and commitments are false and misleading. So far, we haven’t seen any wins on this theory.
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