The great greenwashing myth being sold to Australians

In an ideal world, governments would help citizens to spot greenwashing. In reality, governments are part of the problem.

We're exposed to stories of the climate crisis almost daily - catastrophic floods, extreme heat, species extinction, ecosystem collapse - and most of us are trying to do our bit to help. Government and industry tell us to recycle, turn off our lights, bring our KeepCup, offset our flights, get our solar panels. Because we're all in this together ... aren't we?

Advertising for sustainable, carbon-neutral, climate-friendly brands is everywhere. Companies want consumers to know they care about the climate and biodiversity crisis and their business and its products and services are part of the solution. And that's great, if it's true.

But if all the sustainability claims being made by government and businesses were true, habitat destruction would be decreasing. Greenhouse gas emissions would be falling, not rising.

While in most states, you need permission to prune a tree in your backyard, Rio Tinto can blow up a rock shelter dating back 46,000 years and get little more than a slap on the wrist. If you exaggerate your deductions on your tax return you face serious consequences with the ATO; but if Ampol says its petrol is "carbon-neutral", they're endorsed by the government.

Consumers and voters are fed up with the double standard and the tall tales from big business. There are currently three major civil litigation cases against fossil fuel companies running in Australia for greenwashing and there has been a call for a ban on fossil fuel advertising, like France has established.

Financial and consumer regulators ASIC and ACCC have announced welcome crackdowns on greenwashing by companies. But government is part of the problem.

A fundamental contradiction in Australia is that "we've got a government that is still subsidising fossil fuels, yet businesses are expected to be making emissions-reduction plans", as Polly Hemming, the Australia Institute's Climate & Energy program director told the Senate this week. The federal government has told voters it is cracking down on greenwashing and is committed to climate and integrity while it supports and subsidises climate-wrecking industries. Unless the government stops this, the easiest option is for it to make it look like polluting businesses are doing their bit for the climate and environment. In other words, to deploy a heavy arsenal of state-sponsored greenwashing.

What does state-sponsored greenwash look like? Take the government's Safeguard Mechanism. It notionally "regulates" Australia's biggest polluting facilities by requiring them to "reduce" their emissions. Except they don't really have to reduce emissions, they can simply purchase carbon offsets (which are usually junk). Minister for Climate Change and Energy Chris Bowen says new gas projects can offset their emissions, increase production and "meet climate goals". This is nonsense.

Or take the government's carbon-neutral certification scheme, Climate Active. More than 500 businesses have paid licence fees to the government to use the Climate Active carbon-neutral certification trademark, including: Ampol with its carbon-neutral petrol; Telstra with its carbon-neutral gas and electricity; and Cooper Energy, which says it is Australia's first carbon neutral gas producer because it has offset its operational greenhouse gas emissions while also increasing the emissions covered by the Climate Active certification from 4352 tonnes of Co2-e in 2021 to 102,638 tonnes in 2023.

Climate Active promotes these businesses to consumers as "making a real difference". Climate Active certification is a big ol' government tick of approval that consumers should be able to trust. But let's be clear, just like "clean coal" or "child-safe uranium", there is no such thing as "carbon-neutral petrol". It's as mythical as a unicorn.

Even though many businesses sign up to the scheme in good faith, Climate Active doesn't actually check whether these businesses are "climate active". While the ACCC can verify if Samsung's claims Galaxy phones are water-resistant is true, there is no science that says carbon-neutral fossil fuels are real. Climate Active does not check the offsets its members are buying (even though numerous independent investigations have shown they are junk). The icing on the faux cake is even the ACCC thinks the Climate Active scheme is dodgy.

In a senate inquiry this week, the ACCC said it refused to sign-off on the Climate Active certification and trademark because it was too "confusing" to consumers. The ACCC also conceded the whole term "carbon-neutral" was probably misleading; Australia Institute polling shows while 85 per cent of Australians have heard the term "carbon-neutral", only 33 per cent say they know what it means.

The day after the senate inquiry into greenwashing, a separate inquiry revealed new legislation that will impose a three-year moratorium on civil greenwashing litigation against Australia's biggest companies. So government will protect big business engaged in greenwashing from consumers, but won't protect consumers against misleading claims made by those same companies.

All this greenwashing crowds out genuine solutions and innovations, which are out there right now. This week the Australia Institute and Buildings Alive released a study which estimates if commercial buildings shifted one-third of their peak electricity consumption to the middle of the day, this would save consumers up to $1.7 billion a year, cut annual greenhouse gas emissions by 2,780,000 tonnes, and add additional peak capacity equivalent to 52 per cent of Australia's existing coal generation fleet. That's just by making buildings work smarter and more efficiently.

Companies that are genuinely reducing their emissions and their impact on the environment should be supported and encouraged by government. But for too long governments have been subsidising the polluting industries that created this climate and biodiversity crisis, while failing to regulate either their activities or their misleading claims to consumers. Governments should be protecting consumers from false and misleading claims, not making them.

If government and industry want us to "do our bit", they need to do theirs.

Correction: An earlier version of this article had incorrect details about Cooper Energy's use Climate Active offsets.