Climate Litigation in Australia
When the Federal Court dismissed the Australian Centre for Corporate Responsibility’s (ACCR) claims against Santos in February 2026, some commentators suggested the result signalled a high bar for climate litigation in Australia. The fuller picture is more nuanced. The Santos appeal is now live before the Full Federal Court, the Australian Securities and Investments Commission (ASIC) has secured three consecutive civil penalty judgements for greenwashing, a new proceeding was commenced in October 2025, and Australia sits third globally for cumulative climate cases filed, behind only the United States and Brazil.
This article maps the current Australian climate litigation landscape, places it in global context, and examines what it means for companies, boards and investment teams.
Australia’s Position Globally
According to the Grantham Research Institute’s Global Trends in Climate Change Litigation 2026 Snapshot, more than 3,600 climate cases have now been filed across 62 countries, with 249 new cases filed in 2025 alone. The United States remains the largest jurisdiction with 2,078 cumulative cases, followed by Brazil with 354 and Australia with 193. The United Kingdom and Germany follow with 156 and 121 respectively.
The 2026 Snapshot’s central finding is that climate litigation has moved beyond novel strategic litigation to become a permanent feature of global climate governance and the corporate risk landscape. Climate-washing cases, encompassing greenwashing and related misleading conduct, are now the most common type involving corporate actors, with over 65% of decided cases ruled in favour of claimants globally.
The Australian Case Landscape
The Australian climate litigation landscape spans several distinct categories, each with its own trajectory.
Greenwashing – ASIC’s enforcement program
ASIC has secured three consecutive successful civil penalty judgements for greenwashing conduct. In 2024, the Federal Court ordered Mercer Superannuation to pay A$11.3 million and Vanguard Investments Australia to pay A$12.9 million, both for misleading representations about the ESG credentials of their investment products. In March 2025, the Federal Court ordered LGSS Pty Ltd as trustee for Active Super to pay A$10.5 million after finding the fund had made false or misleading representations about its green and Environmental, Social and Governance (ESG) credentials, including claims that it had eliminated investments in gambling, coal mining, oil tar sands and Russian companies, when in fact it continued to hold those investments.
In October 2025, ASIC commenced a fourth greenwashing civil penalty proceeding against Fiducian Investment Management Services Limited as the responsible entity of the Diversified Social Aspirations Fund, an ESG-oriented fund-of-funds. That proceeding is ongoing. While ASIC has stated that greenwashing will not be an express enforcement priority in 2026, ASIC Deputy Chair Sarah Court has been clear that this should not be read as a withdrawal from climate-related enforcement action.
Private climate litigation – ACCR v Santos
The ACCR v Santos case, first covered in our Week 2 article, remains the most significant private climate litigation in Australian history. The Federal Court dismissed all of the ACCR’s claims in February 2026, finding that Santos’ representations about natural gas as “clean energy” and its net zero target were not misleading in context. On 17 March 2026, the ACCR filed a Notice of Appeal to the Full Federal Court. The appeal is live and is being watched closely by Australian companies across all sectors.
The case is notable as the first time an Australian court has ruled on a private greenwashing action over a company’s public climate and sustainability claims, and one of the first globally to consider whether statements regarding net zero targets and transition plans can constitute misleading conduct.
Duty of care – Pabai v Commonwealth
In 2025, the Federal Court found in Pabai v Commonwealth that the Commonwealth Government did not owe a duty of care to the people of the Torres Strait Islands to protect them from the impacts of climate change. That decision is now on appeal to the Full Federal Court, filed November 2025. The case is significant because the International Court of Justice (ICJ) delivered an advisory opinion in July 2025 (after the Federal Court’s original decision) concluding that states have wide-ranging obligations to prevent climate harm. The ICJ opinion, while not binding, is expected to feature prominently in the appeal and its treatment by the Full Federal Court will be closely watched.
Settled cases
Two earlier cases resulted in significant settlements. McVeigh v REST in 2020 saw superannuation fund REST settle a member’s claim alleging it had failed to adequately disclose how it integrated climate considerations into its investment strategy. As part of the settlement, REST recognised climate change as a material financial risk and committed to align its portfolio with net zero by 2050, raising expectations across the superannuation sector. Parents for Climate v EnergyAustralia settled in 2024, with EnergyAustralia apologising to customers as part of the settlement.
Major projects
MACH Energy’s appeal of the New South Wales Court of Appeal’s decision regarding planning approval for the Mount Pleasant coal mine extension is pending before the High Court. A Federal Court hearing is also scheduled in 2026 on challenges to the Federal Government’s decisions regarding the extension of the North West Shelf gas project.
The Global Directors’ Duties Angle (ClientEarth v Shell)
While ClientEarth does not have active Australian litigation, its shareholder derivative action against the board of directors of Shell in the United Kingdom is relevant to how Australian climate litigation is likely to develop. Filed in 2023, the case alleged that Shell’s directors breached their duties under English company law by failing to adopt a Paris Agreement-aligned emissions reduction strategy and thereby failing to act in the long-term interests of the company and breaching their duty of care, skill and diligence.
The English High Court refused permission to continue the claim in May 2023, finding that ClientEarth did not make out a prima facie case, and ordered it to pay Shell’s costs. Permission to appeal was also refused.
The case is nonetheless significant for Australian directors. It tested, for the first time in a major common law jurisdiction, whether directors can face personal liability for failing to govern climate risk adequately as a matter of their duties to the company. The claim failed on its facts, but the theory remains live. The Australian Institute of Company Directors (AICD) has specifically referenced the case in its guidance to Australian directors on climate-related governance obligations. Combined with the ICJ advisory opinion and the Pabai appeal, the directors’ duties dimension of climate litigation is one of the more consequential areas to watch in the years ahead.
What This Means for Investment Teams
Climate-related litigation is a topic that deal teams in listed equities, private equity and other investment contexts are aware of and may discuss as part of their due diligence process. However, it is not yet being baked into valuations or modelled as a potential cash liability in any systematic way. As the litigation landscape becomes more established and penalty quantum becomes more predictable, the case for incorporating climate litigation exposure into investment risk assessments will strengthen.
The Active Super penalty is instructive in this respect. The court explicitly rejected the argument that a lower penalty was warranted because a higher one would reduce returns to fund members, finding that neutralising the sting of the penalty would undermine its deterrent purpose. That logic applies equally to corporate respondents: the court’s approach signals that scale, member base or profitability will not insulate an entity from a substantial penalty where the conduct is established.
Our View
Greenwashing has been a prominent term in ESG discourse for the past ~three years, but it has dropped somewhat from media prominence recently. That reduction in visibility carries a risk that whilst boards that received training on greenwashing in 2023 or 2024 may feel the topic is well understood and settled, the legal landscape is still actively developing. In our experience, most board and management teams are reasonably well educated on what greenwashing means. The challenge is that awareness of the concept does not always translate into the ongoing discipline needed to ensure that every external communication making an environmental or social claim has been reviewed against the data that supports it.
On the forward look, more data creates more visibility which works in both directions. As AASB S2 reporting becomes established across Group 1, 2 and 3 reporters, activist shareholders and regulators will have access to standardised, auditable climate disclosures that allow direct comparison between companies in the same industry. That comparability creates new leverage for climate-related litigation and engagement. A company that is materially behind a peer on emissions intensity, transition planning or climate risk disclosure will be increasingly visible in a way that was not previously possible. Broadly, however, the increase in data is a positive development as it is building a real (rather than estimated) baseline for Australia’s carbon footprint, and the ability to track progress against that baseline over time is needed to view the credibility of the national transition effort.
Sources
- Grantham Research Institute and Sabin Center, Global Trends in Climate Change Litigation: 2026 Snapshot, July 2026, lse.ac.uk/grantham
- Gilbert + Tobin, Climate Risk in the Courtroom: What the 2026 Global Trends Mean for Australian Companies, August 2026, gtlaw.com.au
- Allens, ACCR v Santos: Lessons for Mandatory Climate Reporting and the Future Direction of ESG Litigation in Australia, March 2026, allens.com.au
- Ashurst, Climate Litigation in Australia: Key Developments in 2025 and What’s Ahead for 2026, February 2026, ashurst.com
- Ashurst, Australia’s Greenwashing Regulatory Landscape: ASIC and the ACCC Stay Focused, May 2026, ashurst.com
- ASIC, Active Super Ordered to Pay $10.5 Million Penalty, 18 March 2025, asic.gov.au
- ASIC v Mercer Superannuation (Australia) Ltd (2024) Federal Court of Australia
- ASIC v Vanguard Investments Australia Ltd (2024) FCA 308
- ACCR v Santos Limited (2026) FCA 96
- Pabai v Commonwealth of Australia (2025) Federal Court of Australia
- ClientEarth v Shell Board (2023) English High Court
- International Court of Justice, Advisory Opinion on Climate Change Obligations of States, July 2025, icj-cij.org
- MinterEllison, Climate Litigation Development: Australia Leading the Pack, minterellison.com
Anabranch ESG Advisory provides independent advice on ESG strategy, climate disclosure, and sustainability reporting. The information in this article is general in nature and does not constitute legal or financial advice.
