Landmark greenwashing case against Energy Australia comes to an end

A landmark greenwashing case against Energy Australia was discontinued after the provider reportedly reached a settlement with activist group Parents for Climate.

A civil trial against Energy Australia was due to kick off this week, with The Australia Institute saying it demonstrated how Climate Active is little more than "state sponsored greenwashing".

Energy Australia was to face court over allegations it misled consumers about the green credentials of its Go Neutral products, whereby customers could opt-in to have Energy Australia buy carbon credits on their behalf at no extra cost to "offset" the use of fossil fuels in producing energy.

The action was originally filed in 2023 by Parents for Climate. It marked the first time a local energy provider has faced greenwashing claims and the first time an organisation has faced court over carbon neutral claims.

Records show that the case was discontinued on Thursday, May 15 at the request of Parents for Climate as a settlement had been reached. According to reports, a statement is to be made early next week regarding the settlement.

The case claimed the way in which the energy retailer marketed the Go Neutral range amounts to misleading or deceptive conduct, dating back to 2019.

These claims include that the product is 'carbon neutral', that carbon credits can cancel out emissions, and that consumers who opt-in can 'have a positive impact on the environment.'

Parents for Climate estimate some 400,000 customers were misled.

The group said the purchasing of carbon credits does not "cancel out" or "negate" the emissions generated by the Go Neutral products and therefore is not better for the environment.

As it stands, Energy Australia has denied any wrongdoing and said that any claims made on its website are to be taken as opinion, rather than fact. However, it no longer offers the Go Neutral products and has removed the webpages related to it.

As Energy Australia has been certified as carbon neutral by Climate Active for close to a decade. The Australia Institute said this case is further evidence that Climate Active is not what it claims to be.

"The fact that Energy Australia is now being taken to court, accused of making misleading claims, suggests that the government has failed to ensure that the product was indeed Climate Active," The Australia Institute executive director Richard Denniss said.

"Consumers, investors and community members have lost tolerance for industry and government putting the onus on individuals to tackle the climate crisis and expect more accountability by the private sector.

"Promoting big polluters as climate leaders punishes companies with legitimate climate ambition and misleads consumers. It rewards greenwashing while credible claims are unrecognised and unrewarded."

The case against Energy Australia was scheduled for an eight-day hearing.