Greenwashing is rife in Australia, but could its days be numbered?
Have you ever ticked the box to 'fly carbon neutral', had something delivered via 'carbon-neutral shipping' or chosen to pay a bit extra to buy 'carbon-neutral gas' from your energy retailer?
These green premium products are marketed to us everywhere. They target eco-conscious consumers wanting to do the right thing and create the impression that by paying a premium, the carbon dioxide released into the atmosphere from flying, shipping or burning gas are neutralised or 'offset' with carbon credits.
But the settlement of a recent court case has shown not only that this kind of marketing is misleading Australian consumers; it's also a form of greenwashing. This is a practice by which a business makes its products or services seem more sustainable than they are, usually in a bid to create a positive brand image or improve their reputation.
According to a 2023 study by the Australian Competition and Consumer Commission, 57 per cent of businesses reviewed made concerning claims about their environmental credentials. This week, a case heard in the Federal Court of Australia offered us an up-close view of what this looks like in practice.
In 2023, the advocacy group Parents for Climate first filed a greenwashing case against EnergyAustralia, arguing that the company's 'Go Neutral' gas product misled the more than 400,000 Australian customers who signed up. That's because the carbon offsets purchased by the company did not prevent or undo harms caused by burning fossil fuels.
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In response to case, this week EnergyAustralia apologised to its customers and acknowledged that 'offsets do not prevent or undo the harms caused by burning fossil fuels for a customer's energy use. Even with carbon offsetting, emissions released from burning fossil fuels for a customer's energy use still contribute to climate change.'
The acknowledgement from Australia's third-largest gas retailer that offsets don't neutralise pollution caused from burning gas marks a significant moment for corporate accountability. It also highlights the need for stricter rules on how companies use carbon credits and clearer guidelines around how they communicate this to customers and shareholders.
Last year, Climate Integrity also referred Qantas to the ACCC for greenwashing, arguing that its 'Fly Carbon Neutral' option, which customers purchase for an additional fee, misleads customers about the impact of flying. Red Energy has also been approached by Climate Integrity regarding its 'carbon neutral' gas product, which uses a similar marketing tactic as EnergyAustralia.
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