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 had been scheduled for May 2025. On 19 May 2025, Parents for Climate announced that a settlement had been reached with EnergyAustralia. EnergyAustralia agreed to send an email addressing the settlement to current and former customers of the Go Neutral product, in which it acknowledged that “offsets do not prevent or undo the harms caused by burning fossil fuels for a customer’s energy use”, and that “(e)ven with carbon offsetting, the emissions released from burning fossil fuels for a customer’s energy use still contribute to climate change”.

EnergyAustralia also apologised “to any customer who felt that the way we marketed our Go Neutral products was unclear.” EnergyAustralia no longer offers the Go Neutral products to new customers and has removed all marketing in relation to this product from its website. It now states that it has made a commitment to net-zero greenhouse gas emissions for its generation operations by 2050, which it intends to achieve by reducing its reliance on coal generation, and expanding the amount of renewable energy in its portfolio.