UniSuper has been given a September 16 deadline by which it must provide clarity on its investment in Australian oil and gas producer Santos, after the Environmental Defenders Office (EDO) argued it “may amount to a breach of the law.”

According to The Australian Financial Review, the environmental legal group issued a Monday letter to UniSuper CEO Peter Chun, directors and trustees arguing it has “failed to adequately examine the net zero and emissions reductions claims made by companies in which member funds are invested.”

The letter claimed UniSuper held over AU$163 million ($111 million) in Santos in the latest disclosure of its portfolio, despite the energy company’s continuing expansion of oil and gas production, in a manner it says is inconsistent with Paris Agreement goals.

The EDO outlined that its client, a research fellow at the Australian Catholic University, suggested divestment from Santos “as the best way for the fund to avoid significant liability risks arising from its potential breach of duties.”

UniSuper has been requested to respond by September 16 explaining how its continued investment in the oil and gas producer does not represent such a breach.

The letter also warned that the matter may be subject to further action, including “potentially raising the issues with regulators or commencing legal proceedings.”

The energy company has long faced allegations of greenwashing, with The Australasian Centre for Corporate Responsibility (ACCR) recently expanding the scope of its lawsuit against it over “misleading or deceptive conduct relating to its clean energy claims and its net zero plan.”

Market Forces has also been a long-term critic of Santos for pursuing sizeable new oil and gas projects, which it argues are “consistent with the failure” of key Paris Agreement climate goals.

Santos exists within the 25 largest Australian-listed shareholdings of UniSuper’s “balanced” investment option, despite the fund announcing it had significantly sold down investments in gas companies in 2021.