Energy Australia has reached an out-of-court settlement with climate advocacy group Parents for Climate to resolve a greenwashing case that commenced last week and apologised to more than 400,000 customers over its marketing of its “Go Neutral” carbon offset program.
The case was the first in Australia to be brought against a company for “carbon neutral” and “greenwashing” marketing.
The two sides settled on Thursday 15 May, the day after court proceedings. While details of the settlement remain confidential, the agreement sees all legal proceedings discontinued.
The settlement avoids what could have been a landmark trial with implications for corporate climate marketing. Under the terms, EnergyAustralia acknowledged the product was “not the most effective” way to cut emissions and issued a formal apology.
Earlier this morning, Energy Australia apologised publicly to its customers, acknowledging the “Go Neutral” carbon offsets product would do nothing to address the impact of fossil fuels on climate change.
A spokesperson for Energy Australia told B&T last week that it has been “working closely with Parents for Climate over the last number of months” and is confident that the pair will be able to resolve the issue together.
“EnergyAustralia remains committed to decarbonising by investing in and supporting assets that enable the clean energy transformation, and helping our customers to directly reduce their emissions,” the spokesperson said.
The Parents for Climate group launched its legal action against Energy Australia in 2023. The group alleged Energy Australia misled customers about its “Go Neutral” product by claiming their electricity and gas would be carbon neutral because the company was offsetting the pollution by buying carbon credits.
“Today, EnergyAustralia acknowledges that carbon offsetting is not the most effective way to assist customers to reduce their emissions and apologises to any customer who felt that the way it marketed its Go Neutral products was unclear. Storing carbon in plants is not equivalent to keeping it stored in fossil fuels (by not burning those fossil fuels in the first place),” EnergyAustralia said in a public apology issued as part of a settlement with the charity Parents for Climate.
“Burning fossil fuels creates greenhouse gas emissions that are not prevented or undone by carbon offsets. This could have been made clearer to customers”.
More than 400,000 Australians signed up to EnergyAustralia’s “Go Neutral” program, which assured customers they were “doing good things for the environment”.
The program promised to “offset” the emissions produced by burning fossil fuels with a range of programs, including buying carbon credits from a geothermal development in Indonesia.
The energy giant has now admitted that offsets cannot undo or prevent the harm caused by polluting fossil fuels.
“Even with carbon offsetting, the emissions released from burning fossil fuels for a customer’s energy use still contribute to climate change,” the company said in a statement released on Sunday.
The company acknowledged that even when customers opted in to the “Go Neutral” product, their electricity or gas use was still sourced predominantly from fossil fuels.
Parents for Climate said the settlement would “set the standard” for how carbon offsetting is marketed in the future.
