EnergyAustralia settles landmark greenwashing case

EnergyAustralia has settled a high-profile greenwashing case brought by climate advocacy group Parents for Climate, publicly admitting that its now-defunct ‘Go Neutral’ product misled customers about the environmental impact of fossil fuel use.

The case, the first of its kind in Australia targeting “carbon neutral” marketing, centred on claims that EnergyAustralia’s offset-backed gas and electricity products had a positive environmental impact. The company has now acknowledged that offsets do not prevent or undo the harms of burning fossil fuels and that its customers' energy use continued to contribute to climate change.

As part of the settlement, EnergyAustralia issued an apology to more than 400,000 customers who participated in the Go Neutral program. It also conceded that carbon offsetting is not the most effective way to help customers reduce their emissions and admitted that its energy was still predominantly sourced from fossil fuels.

Parents for Climate CEO Nic Seton called the outcome a “historic acknowledgement” and said it sets a new standard for corporate climate claims in Australia.

“Not only does this send a powerful message that the era of unchecked greenwashing is over, but it’s incredibly reassuring to see one of the largest energy retailers in the country take accountability and want to do better for their customers and the climate,” Seton said.

David Hertzberg, principal lawyer at Equity Generation Lawyers, which represented Parents for Climate, described the outcome as a watershed moment in Australian greenwashing litigation.

“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’,” Hertzberg said. “Our client hopes it marks the beginning of the end for carbon offset marketing and the beginning of real action on climate change.”

The case comes amid growing national and international scrutiny of carbon offset schemes. EnergyAustralia is the largest participant in the government’s Climate Active certification program, which is itself under review. In recent months, several major brands have withdrawn from the scheme, and the European Parliament has already moved to ban carbon neutrality claims based on offsetting.

Initially set for a two-week hearing in the Federal Court, the legal action was resolved out of court just days before proceedings were due to begin. Parents for Climate had alleged that EnergyAustralia’s carbon neutral marketing amounted to misleading and deceptive conduct under Australian Consumer Law.

In its final statement, EnergyAustralia acknowledged legitimate concerns over the use and efficacy of offsets and admitted its marketing may have caused confusion among customers. The company has since withdrawn the Go Neutral product and committed to reviewing its approach to customer emissions reductions.