In a significant development, a major energy company in Australia has admitted that carbon offsets are ineffective at preventing or reversing environmental damage caused by greenhouse gas emissions. This acknowledgment followed an apology to customers for misleading marketing practices related to its “go neutral” carbon offset program. Since 2016, over 400,000 Australians had enrolled in this program, which promised to offset emissions from electricity and gas consumption.
The advocacy group Parents for Climate filed a lawsuit in 2023, arguing that the company misled the public by claiming to reduce emissions on behalf of its customers through international carbon offsets. According to a settlement agreed upon by the parties, the company has admitted that while carbon offsets can finance projects to reduce greenhouse gas emissions elsewhere, they do not mitigate the harm caused by burning fossil fuels for energy. This case, the first of its kind against a major Australian energy provider, sets a precedent against “greenwashing” — the practice of making false or exaggerating claims about environmental benefits.
Parents for Climate’s CEO, Nic Seton, hailed the outcome as a “historic acknowledgment” and a critical step forward for the company’s 1.6 million customers. He emphasized that it sends a powerful message that the era of unchecked greenwashing is over. The settlement highlights the importance of not relying on carbon offsets as a license to pollute and underscores the need for more direct actions to reduce emissions.
Energy Australia’s Chief Customer Officer, Kate Gibson, acknowledged the legitimacy of public concerns about the effectiveness of carbon offset programs. She stated that the company will now focus on more effective methods to help customers reduce emissions associated with their energy use directly. This incident also raises questions about the efficacy of the federal government’s Climate Active program, which certifies carbon offsets, indicating a broader need for scrutiny and accountability in environmental claims by corporations.
Source: https://www.theguardian.com/australia-news/2025/may/19/energy-australia-apologises-to-400000-customers-and-settles-greenwashing-legal-action
