The advocacy organisation on Wednesday filed a Federal Court claim against Woodside, alleging the gas giant misled or deceived Australians about its climate performance and plans.
Woodside made out that it cut down on pollution produced from extracting and processing its gas and oil by 11 per cent in 2022, Greenpeace said.
However, it leaned heavily on carbon offsets and its actual emissions went up by more than 3 per cent, the organisation claimed.
The gas giant also publicly had a plan to be "net zero" by 2050 but didn't spell out that the target didn't apply to the emissions produced when its oil and gas was burnt, Greenpeace said.
Greenpeace Australia Pacific chief executive David Ritter claimed Woodside was treating the Australian public and shareholders "like mugs".
General counsel Katrina Bullock added greenwashing was dangerous because - as well as potentially misleading investors - it delayed action on reducing greenhouse gas emissions and undermined competition.
"We believe Woodside's statements are designed to make investors, governments and the general public think it is reducing its emissions, when in truth the company's emissions are increasing," Ms Bullock said in a statement.
"It is clearly in the public interest to ensure big polluters such as Woodside are held to account for their allegedly misleading or deceptive conduct."
Greenpeace hoped the civil action would ultimately improve companies' disclosure about their climate impacts.
A Woodside spokesperson said the company was aware Greenpeace on Wednesday had filed proceedings in the NSW Federal Court registry.
"Once we have been served with the relevant documents we will review and consider our position," the spokesperson said.
Greenpeace activists last week climbed a 140-metre crane next to Woodside Energy's Perth headquarters to decry the oil and gas producer as "Australia's biggest climate threat".
The organisation has retained the Environmental Defenders Office for the Federal Court action.
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