EnergyAustralia, one of Australia’s leading energy providers, has apologised to over 400,000 customers for misleading claims regarding its “Go Neutral” carbon offset scheme. The company acknowledged that these offsets “do not prevent or undo harms” associated with fossil fuel consumption. This statement follows a lawsuit from the environmental group Parents for Climate set to be heard in the NSW Federal Court last week.
Parents for Climate, representing more than 20,000 members, hailed EnergyAustralia’s admission as a victory for consumers and a potential benchmark for corporate environmental marketing. The lawsuit, initiated in August 2023, accused EnergyAustralia of deceiving customers with claims that its Go Neutral offerings were carbon neutral and positively impacted the environment due to purchased carbon offsets.
In its statement, EnergyAustralia conceded that while carbon offsets might support projects aiming to reduce emissions, they do not mitigate the direct environmental damage caused by fossil fuel usage. The company asserted, “Even with carbon offsetting, the emissions released from burning fossil fuels for a customer’s energy use still contribute to climate change.” As a result, EnergyAustralia has chosen to discontinue its Go Neutral plans and will now prioritise direct emission reductions.
Kate Gibson, the chief customer officer, stressed that carbon offsets should not distract from the necessary urgent action to decarbonise energy production. This shift follows increasing scrutiny over greenwashing practices, whereby companies exaggerate their environmental capabilities. Nic Seton, CEO of Parents for Climate, highlighted the need for a higher standard for corporate environmental claims, especially during a cost-of-living crisis that pressures families to make careful spending decisions.
Seton pointed out that Australian regulations surrounding corporate environmental claims are insufficient. He urged the government to reconsider the effectiveness of the Climate Active carbon-neutral certification, which has been under review since October 2023. The anticipated outcome of the court case could pave the way for stricter standards on corporate environmental practices within Australia, as indicated by David Hertzberg, the principal lawyer representing Parents for Climate, who described the situation as a pivotal point for greenwashing litigation in the country.
As of 2023-2024, EnergyAustralia was the third-largest emitter in Australia, serving over 1.6 million customers. This public acknowledgement marks a significant turning point in how companies communicate their environmental responsibility and presents an opportunity for refining corporate accountability in Australia.