Shareholder activist group the Australasian Centre for Corporate Responsibility (ACCR) lodged proceedings in the Federal Court in 2021, alleging the fossil fuel company engaged in misleading and deceptive conduct towards investors.

The ACCR has accused the company of "greenwashing" in its claims it would reach net-zero emissions by 2040 and that its blue hydrogen projects would be emissions-free.

Santos Ltd, worth about $22 billion, operates onshore and offshore oil and gas projects in Australia, the US, Papua New Guinea and Timor-Leste.

The ACCR says it's the first case of its kind in the world using consumer and corporate laws to challenge the veracity of a fossil fuel company's claims of being able to create clean energy and achieve the target of net zero emissions.

In its opening statement, the ACCR's barrister, Noel Hutley SC, told the NSW Federal Court Santos sent "a clear, powerful message" to investors in its 2020 annual report that laid out a pathway to achieve net zero emissions by 2040.

The shareholder advocacy group claims Santos lacked a proper basis for asserting it had a defined path to reduce emissions by 26 to 30 per cent by 2030, and reach full net-zero status by 2040, as it outlined in a 2020 report to investors.

In opening statements, the ACCR's barrister, Noel Hutley SC, argued Santos told investors it had a road map to achieve net zero but no concrete evidence to back it up.

"There is a clear credible road map that Mr Gallagher set out and wanted the market to hold him accountable for," Mr Hutley said, referring to Santos chief executive Kevin Gallagher.

"There was no statement that the collocation of events in the road map … were merely a random collection of possibilities. That's not what [Santos] said. To say it was just possible, would have put it in the class of aspiration, which is what they [Santos] were seeking to say they had moved beyond."

Mr Huntley argued Santos "went out of its way" to tell investors its plan towards net zero went beyond "mere ambitions … to be clear and tangible".

"The reality of this case is the so-called plan was not a plan at all, it was a series of speculations without the kind of modelling that is reasonable for statements of this kind."

The court heard that Santos would argue no reasonable investor would have believed the company was predicting to achieve net zero by 2040 in the particular way set out in its road map.

The ACCR also argues Santos misrepresented natural gas as "clean energy" and portrayed blue hydrogen (which is produced from natural gas) as emissions-free.

The organisation is relying on a barrage of documents including Santos's 2020 annual report, briefings on the ASX's Investor Day site, and a 2021 climate report.

The trial will run roughly three weeks.