Climate change and greenwashing have rapidly reappeared on the agenda for brands and marketers following the release of the Labor government’s National Climate Risk Assessment and the looming review of the government-led carbon neutral certification scheme, Climate Active.
The National Climate Risk Assessment made stark reading for many. It said efforts to limit climate change around the world, including in Australia, were insufficient.
If global temperature increases were not limited to below 3ºC, deaths due to extreme heat could climb 440 per cent in Sydney, 260 per cent in Melbourne and 420 per cent in Darwin, for instance.
It added climate change could reduce overall economic output by $135-423 billion by 2063 and that Agriculture, construction, manufacturing and mining would be the worst hit, losing the equivalent of 700,000 additional days of work every year by 2061.
Coastal areas could see flooding rise from around 15 days a year to 272 days a year and the number of Australians exposed to coastal hazards would double to 3 million by 2090.
Amid this damning report, the government is also reviewing its Climate Active carbon neutral certification scheme. More than 100 brands have exited the scheme over the last two years, including Australia Post, Canva and Telstra.
Climate Active provides certification to businesses and other organisations to verify that they are carbon neutral. If certified, it is taken to mean that an organisation has neutralised the impacts its greenhouse gas emissions have on global warming by buying carbon offsets, which represent emission reductions achieved elsewhere.
To find out more about the scheme and what could come next following the release of the National Climate Risk Assessment, B&T spoke with Claire Snyder, founder of not-for-profit research and advocacy group Climate Integrity, and Environmental Defenders Office (EDO) lawyer Kirsty Ruddock.
The vice appears to be tightening for brands talking the talk on the environment but without walking the walk. For instance, Climate Active-certified EnergyAustralia was caught up in Australia’s first ‘greenwashing’ case back in May.
EnergyAustralia reached an out-of-court settlement with climate advocacy group Parents for Climate and apologised to more than 400,000 customers over its marketing of its “Go Neutral” carbon offset program.
Snyder said it was a “significant admission” on the part of EnergyAustralia, since its carbon neutral claims had been a huge part of its climate and marketing strategy.
“That scheme is the source for many carbon neutral claims; it’s a legacy climate program intended to support and accelerate climate action. The recent events have shown us that it has not stayed relevant and up to date with science. In some ways, it has supported corporate greenwashing,” Snyder said.
“Hopefully, the review will deal with the legacy role that Climate Active has had in supporting carbon neutral claims and hopefully offer an alternative for companies that want to promote their green activities and ensure it’s done responsibly,” she added.
“There is a growing integrity crisis in carbon marketing, which comes with legal and reputation consequences for brands. Marketing teams need to understand that risk,” Snyder said.
Climate Active held a public consultation in 2023 on a paper that outlined potential reforms to the scheme and sought input on the future of the program.
The department received 158 submissions. Climate Active’s website states that feedback is being considered alongside the future direction of the Climate Active program, which is subject to government feedback.
Red Energy has also faced scrutiny over its marketing.
In April, Climate Integrity filed a letter of concern to Red Energy, asking the company to drop its ‘carbon neutral’ gas product for the same reasons highlighted by Parents for Climate in its lawsuit against EnergyAustralia.
Red Energy has since changed the name of its carbon neutral gas product and included a detailed disclaimer that offsets don’t undo climate harms from energy use, but continues to offer the product.
“It’s important to us that we meet our customers’ expectations and put their needs first,” a Red Energy spokesperson told B&T, adding it was “aware that there is debate about the use of offsets and we will ensure our customers’ needs continue to be met as the debate develops.”
“They’re in a strange place in terms of what they’re marketing to their customers with some mixed messaging about what offsets are and what they do,” Snyder said.
Snyder advised any companies that are relying on carbon neutral claims to make sure they are aware of the increasing reputation and legal risks, and that their directors are aware of them, too.
And it isn’t just EnergyAustralia–greenwashing cases are starting to multiply. In April 2025, Clorox was ordered by the ACCC to pay $8.25 million in penalties for misleading claims that certain GLAD products were made of recycled ‘ocean plastic’.
Australian Consumer Law can apply to all of those involved in misleading advertising, including those who are involved in the development of the campaigns and advertising itself, not just the companies making the products themselves.
Other certification schemes exist that brands can voluntarily join to show their commitment to being green, such as B Corp certification. This is not free from controversy, either. Last year, a PR “disaster” ensued when four Havas agencies had their B Corp status revoked due to their work for oil giant Shell. B Labs, the organisation behind the certification, has since tightened its rules.
Where is carbon marketing heading?
“The Australian Consumer Law does provide protections against misleading claims as this case illustrates, but the broad nature of green claims has been the subject of significant debate about whether further laws are needed to protect consumers,” Ruddock said.
“For example, a Senate Committee is investigating green claims and whether existing laws are adequate, and is due to report later this year. Overseas in Spain and the UK, legislation is being considered to ban all fossil fuel advertising as an alternative approach.
“This area is constantly evolving, and we would like to see further action taken by regulators to ensure misleading claims are reduced,” she added.
In March of this year, the Legislative Assembly for the Australian Capital Territory voted for a Greens motion to ban fossil fuel and gambling companies from sponsoring school programs from next year.
It comes after Comms Declare released a national survey which found 56 per cent of parents were against coal, oil and gas companies sponsoring school programs and 87 per cent of parents said they would prefer government funding over fossil fuel companies.
There are more than 60 fossil fuel-sponsored school programs across the country, which some experts have claimed are used to improve the image of the industry and give often one-sided information about energy and climate change.
“The Capital Territory has again shown its climate leadership and we applaud this decision to free students from the insidious marketing of fossil fuels in classrooms,” Belinda Noble, founder and president of advocacy group Comms Declare, said.
“I think there is a strong case in Australia to regulate green claims and to help reduce green washing, and that would support companies on how they can make sure that they’re being clear and transparent with their customers and not making false or misleading claims when it comes to things like being carbon neutral,” she said.
Advertisers and marketers would do well to check and double-check what messages they’re putting out to consumers in any climate-related claims. It’s particularly important they keep an eye on changing regulations as brands await the government’s report from its Climate Active review to be published.
While it might be a tense time for some, for others, it’s a chance to step up in an industry that is struggling with integrity and cut through the noise with products and marketing that genuinely serve to help the environment. Though they’ll need to ensure that they’re on top of the Labor Government’s new 2035 emissions reduction target.
