Santos Ltd (ASX: STO) shares are in the green today, up 0.3% to $7.37 per share.
That puts the S&P/ASX 200 Index (ASX: XJO) energy stock up 4.1% since the opening bell on 3 January.
But while Santos shares may be in the green for the New Year, the company itself has been accused of greenwashing its environmental credentials.
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What's all this about greenwashing?
Greenwashing, in a nutshell, is when a company misrepresents its carbon reduction plans or other sustainability measures.
And, according to the Australasian Centre for Corporate Responsibility (ACCR), Santos' labelling of gas as a clean energy source amounts to greenwashing.
Santos has plans in place to reach net-zero carbon emissions by 2040.
However, the ACCR alleges that the ASX 200 energy giant is ramping up its gas production and is depending on unproven carbon capture storage (CCS) technology to make the net-zero goal happen.
In September, Santos was awarded CO2 storage permits, opening the door to further CCS opportunities.
Commenting on the permits at the time, Santos CEO, Kevin Gallagher, said that carbon capture and storage is "critical for the world to reduce emissions and in line with Santos' net-zero scope 1 and 2 equity-share emissions by 2040 target".
Gallagher added:
At Santos, we have the technology, infrastructure and knowledge to be able to deliver low-cost CCS competitively on a global scale. We know a large scale-up of CCS is required to meet the world's climate objectives.
The Australian Securities & Investments Commission (ASIC) is keeping an eye on the legal row.
According to ASIC (quoted by The Australian):
ASIC is monitoring the greenwashing case brought by the Australasian Centre for Corporate Responsibility … regarding representations that Santos' natural gas product is 'clean fuel' and that Santos has a credible and clear plan to reach net-zero emissions by 2040.
But it's not just Santos shares that could come under some pressure from the alleged greenwashing.
"ASIC is currently investigating a number of listed entities, super funds and managed funds in relation to their green credentials claims," ASIC deputy chair Sarah Court said.
"Companies are on notice that ASIC is actively monitoring the market for potential greenwashing and will take enforcement action," she added.
How have Santos shares been tracking longer-term?
Santos shares have gained 37% over the past five years. That compares to a 21% gain posted by the ASX 200 over this same period.
Over the past year, as you can see in the below chart, the Santos share price is up 4%.
