ESG Enforcement Tracker

Key facts:

In August 2023, Parents for Climate, an Australian climate advocacy group, brought the first ever civil action in the Federal Court of Australia against a company for marketing a consumer product as “carbon neutral”.

Parents for Climate claimed that EnergyAustralia, Australia’s third largest energy company, was engaged in greenwashing by misleading over 400,000 consumers about the climate impact of its products. Specifically, it argued that the following claims made by EnergyAustralia were misleading and, accordingly, breached section 18 of the Australian Consumer Law:

• its “Go Neutral” electricity and gas was “carbon neutral”;
• emissions created by “Go Neutral” were “negated”; and
• by opting to purchase “Go Neutral” products, consumers had a “positive impact on the environment”.

“Go Neutral” products were sourced mainly from burning fossil fuels, but Energy Australia claimed that by purchasing carbon credits, it was able to “offset” the associated emissions.

However, Parents for Climate argued that this was a misleading statement to consumers: carbon credits did not eliminate emissions as neither of the two types of carbon credits, avoidance based and removal based, cancelled out emissions either fully or permanently. As a result, the overall impact was net positive emissions into the environment and, given EnergyAustralia’s misleading claims, an average consumer would not be alive to this issue.

A two-week hearing is scheduled for May 2025.