The Federal Court on Tuesday found Santos did not breach corporate and consumer law with its representations of environmental goals.
Justice Brigitte Markovic's full reasons for making the decision will not be published for nearly a week to give Santos time to redact sensitive material.
The case was brought by the advocacy organisation Australasian Centre for Corporate Responsibility in 2021.
It challenged claims by Santos that natural gas provided "clean energy" and that the company had a "credible and clear plan" to achieve net-zero greenhouse gas emissions by 2040.
The shareholder advocacy group's lawyers alleged the energy company's descriptions of blue hydrogen as "clean" and "zero emissions" were misleading.
Blue hydrogen is a fuel created using gas that relies on carbon-capture technologies to deal with the emissions.
The company's defence lawyers rejected allegations its climate goals lacked credibility, arguing they were always targets not promises and claimed the "clean" hydrogen fuel label was used only when accompanied by carbon credits.
The case was all about the credibility of corporate climate promises, Monash Business School Green Lab researcher Ella Vines told AAP.
"It sends an important signal about how companies must frame their net-zero commitments and transition pathways," Dr Vines said before the decision was handed down.
Courts were increasingly being asked to determine whether long-term emissions reduction claims were backed by concrete, near-term action and credible assumptions, the expert in corporate sustainability regulation said.
"The decision will shape how boards approach climate risk disclosure, transition planning and public communications," Dr Vines said.
Santos allegedly made the misleading statements at a December 2020 investor day and in its 2020 annual report and climate change report, both published in February 2021.
The advocacy group had sought injunctions forcing the firm to issue a corrective notice about the environmental impacts of its operations.
It did not seek damages or compensation, saying it filed the lawsuit to vindicate the public interest in ensuring corporate climate change commitments were reasonably based.
It will have to pay Santos' legal costs of defending the dismissed case.
The corporate responsibility centre holds shares in firms such as Santos to try to force them to meet the goals of the Paris Agreement, the primary international climate change pact.
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