A new review of Australia’s biggest energy retailers has found more than 1 in 3 at risk of making misleading ‘greenwashing’ claims.

The review was conducted by Parents for Climate following its landmark lawsuit against energy giant, EnergyAustralia, which publicly apologised to over 400,000 customers of its ‘Go Neutral’ home energy product and later withdrew it from the market entirely.

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Parents for Climate reviewed the risk of greenwashing at 34 major Australian energy retailers by assessing their use of “offsets” and “carbon neutral” claims on their websites. Of those:

• 6 were identified as the “Worst Offenders” who falsely claimed their fossil fuel products to be fully “carbon neutral,” often under the federal Climate Active scheme, and
• 7 were “Cunning Compensators” relying on “offsets” to market fossil fuel products, sometimes with partial disclaimers.

More than just a marketing issue, these practices erode consumer trust, expose companies to legal and reputational risks, and delay urgent climate action, leaving future generations at greater risk of a hotter, more unstable planet.

Nic Seton, CEO of Parents for Climate said, “Greenwashing tricks well-meaning consumers and robs our kids of a safer climate future. And parents are sick of it. 85% of parents we surveyed feel strongly that the government needs to create stricter regulations around sustainability claims. It’s time the Federal Government switched from enabling these misleading claims, to clamping down on dodgy marketing.”

“It beggars belief that so many energy retailers continue to potentially mislead and deceive Australian energy consumers. These 13 companies are using so-called “offsets” as a license to sell polluting energy and they should be held to account. We took EnergyAustralia to court and they got with the program. Now we’re putting the remaining energy retailers on notice: their conduct is at risk of being unlawful under Australian consumer law.” 

In its public apology to the media and its customers in May 2025, EnergyAustralia said, “EnergyAustralia acknowledges that carbon offsetting is not the most effective way to assist customers to reduce their emissions and apologises to any customer who felt that the way it marketed its Go Neutral products was unclear. EnergyAustralia has now shifted its focus to direct emissions reductions.”

As well as demanding more integrity in companies’ product marketing, Parents for Climate is calling on the government to protect consumers, improve transparency and accelerate real climate action by: 

• Banning offset-backed “carbon neutral” claims tied to fossil fuels, as already done under the EU Green Claims Directive.

• Phasing out the Climate Active certification scheme in its current form and replace it with a framework that rewards genuine emissions reductions.
• Requiring clear, plain-language disclosure from energy companies about what offsets can and cannot do.
• Supporting households and businesses to cut emissions directly by incentivising renewable energy, electrification, and storage.

At a glance: Parents for Climate review of greenwashing by Australian energy companies

Many of these companies use the Australian Government’s Climate Active certification scheme to justify their “carbon neutral” claims. Whereas the European Union has directed that any product’s “carbon neutral” style claim based on “offsetting” is always misleading and unlawful. A number of overseas court decisions have also found “carbon neutral” style marketing to be misleading, including the 2024 judgment in the Netherlands that Dutch airline KLM’s “carbon neutral” claims were misleading and unlawful, as outlined in Parents for Climate’s report.

The Climate Nonsense report looks only at how energy retailers market their energy products, and not the climate performance of the companies or products overall. While there are definitely energy retailers that are doing the right thing, this report aims to highlight the prevalence and risks associated with misleading “carbon neutral” and “offset” language.

Parents who want to support Parents for Climate’s work against misleading advertising can join nearly 2,500 others in signing the open letter to power companies at www.parentsforclimate.org/greenwashing 

See how your energy provider stacks up here.