EnergyAustralia has apologised for allegedly misleading marketing over its Go Neutral carbon offset product, acknowledging carbon offsetting is “not the most effective way to assist customers to reduce their emissions” amid accusations of alleged greenwashing.
Over 400,000 Australians had signed up for the energy provider’s carbon offset program, which promised to do “good things for the environment” and offset emissions released due to their electricity and gas consumption. But back in August 2023, advocacy group Parents for Climate took the energy provider to court, alleging the company was deceptive in its claims of reducing emissions on behalf of its customers.
The case marked the first time a major Australian energy company faced legal action for alleged greenwashing — as in, making false or misleading statements about the environmental benefits of a product or practice.
The case against Energy Australia was set to begin in the Federal Court last week, but the parties have agreed to a settlement.
In a statement on Monday as part of its settlement, the company apologised to “any customer who felt that the way it marketed its go neutral products was unclear”.
The Go Neutral scheme began in 2016 but the company stopped offering it mid last year, claiming it is continuing to phase it out for residential customers this year.
“Greenhouse gases are harmful to the environment and contribute to climate change. While offsets can help people to invest in worthwhile projects that may reduce greenhouse gas emissions elsewhere, offsets do not prevent or undo the harms caused by burning fossil fuels for a customer’s energy use,” EnergyAustralia said.
“Even with carbon offsetting, the emissions released from burning fossil fuels for a customer’s energy use still contribute to climate change.”
EnergyAustralia is Australia’s third largest greenhouse gas emitter. In 2022–23, it released 17.4 million tonnes of greenhouse gases, and in 2023–24, it released 16.6 million tonnes, according to statistics from the Clean Energy Regulator.
Nic Seton, chief executive of Parents for Climate, described the settlement as a “historic acknowledgement” and a “powerful message that the era of unchecked greenwashing is over”.
“Climate claims must be backed by real action – not marketing spin. Today, EnergyAustralia’s statement makes clear that offsets should not be used as a license to pollute. It is no longer tenable to market polluting products as ‘carbon neutral’ and lead customers to believe that by signing up they are doing good for the planet,” he said in a statement.
“Parents have spent too long trying to make careful, considered decisions about where their money goes — especially in a cost-of-living crisis — but corporate greenwashing has pushed them off track.
“We launched this case as it’s deeply frustrating and emotionally exhausting to navigate a maze of vague claims and false promises. Greenwashing undermines trust and gives the dangerous illusion that coal and gas pollution is being addressed when they’re not.”
The advocacy group also called on the government to dump the carbon neutral certification by Climate Active, which is the government’s voluntary certification register allowing companies to report their carbon emissions and the offsets they are buying.
A number of corporates have withdrawn from Climate Active, including high profile participants like Australia Post, Telstra and PwC.
“Today, Climate Active’s biggest participant has come out and acknowledged the key problems with carbon offsetting. The Climate Active program clearly cannot continue in its current form,” Seton said.
He added that the case’s outcome also serves as validation “for the scientists, carbon market experts and community groups who have for years been speaking out against the way carbon ‘offsets’ are used by corporate Australia and in government policy as a false solution to the climate crisis”.
EnergyAustralia’s chief customer officer, Kate Gibson, said the company will remain in the scheme, but cited concerns about the value of the program.
“In recent years, questions have begun to emerge about the benefits of carbon offsets, including those offered as part of certified Government programs such as Climate Active and whether they are having the impact intended,” she said.
“While EnergyAustralia participated in the Climate Active certified carbon offset program in good faith, today EnergyAustralia accepts that there is legitimate public concern about the efficacy of these programs.
“Carbon offsets should not be used to delay or diminish the important work that needs to be done to actively decarbonise. EnergyAustralia is now focused on more effective ways of helping its customers to directly reduce the emissions associated with their energy use.”
David Hertzberg, principal lawyer at Equity Generation Lawyers, representing Parents for Climate, called the settlement a “watershed moment” for greenwashing litigation in the country.
“Companies need to seriously consider whether the environmental claims they make stack up – particularly, as this case shows, when claiming that their polluting products are ‘carbon neutral’,” he said.
“We are lucky in Australia to have strong consumer protection laws, but it took a lot of courage for Parents for Climate to stand up and take legal action against EnergyAustralia. And that courage has paid off.
“Our client hopes it marks the beginning of the end for ‘carbon neutral’ marketing based on offsetting and the beginning of the end of the use of offsets to distract from real action on climate change.”
Lead image: Getty / Twitter
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