The Santos Ltd (ASX: STO) share price slumped today after news broke that the company is facing a lawsuit.
At market close, Santos shares are down 2.27% to $6.02. It is worth noting that this means the company's share price is now at a new low for the 2021 calendar year.
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What happened?
According to the Financial Review, Santos is being taken to the Federal Court by an activist group over wrongful claims. This relates to the company stating that it produces clean energy and has set itself up to achieve zero emissions in the future.
The Australasian Centre for Corporate Responsibility (ACCR) noted that Santos' 2020 annual report made false remarks about natural gas as a clean source of fuel. It also disputed that the company has a clear plan to reach net zero emissions by 2040.
Santos aims to expand production capacity at its Barossa gas/LNG project and Dorado oil field development. This will undoubtedly leave the company producing greater emissions, which the ACCR argues.
Previously, Santos said that it will rely on the development of carbon capture and storage (CCS) technology to negate emissions. The ACCR is calling into question whether this is credible.
The group filed the lawsuit on Wednesday stating that the company's approach to addressing climate change is misleading and deceptive.
Santos is yet to formally respond to the accusations by the ACCR. It did say however it would not be appropriate to comment on matters before the court.
The court case is being recognised as a world first in challenging a company's target of net zero emissions.
About the Santos share price
Over the past 12 months, Santos shares have moved in circles, up 7% in the period. However, year to date has moved in the opposite direction, down around 3%.
Based on today's price, Santos commands a market capitalisation of roughly $12.5 billion, with approximately 2 billion shares on issue.
