A former chair of Australia’s consumer watchdog wants the federal government to establish an independent investigation into its program that certifies companies and products as carbon neutral, citing “greenwashing” concerns.
Prof Allan Fels, an ex-boss of the Australian Competition and Consumer Commission, has told a Senate inquiry on greenwashing that “on the face of it” the government’s Climate Active program was guilty of “misleading and deceptive conduct”.
Critics of the program say Climate Active is enabling greenwashing because it allows companies or products to be certified as carbon neutral through the purchase of offsets – instead of requiring actual cuts in emissions.
Climate Active – run by the Department of Climate Change, Energy, the Environment and Water – has issued more than 600 carbon neutral certifications to more than 500 businesses, including some of Australia’s best-known brands.
The program has certified several fossil fuel companies or their products as “carbon neutral” including gas explorer Cooper Energy, petroleum company Ampol and AGL, which is Australia’s biggest corporate emitter of greenhouse gases.
Language used last year by Climate Active describing certified companies as “progressive climate leaders” and “climate champions” no longer features on the program’s website, a Guardian Australia analysis shows.
In a submission to the Senate inquiry into greenwashing, Fels wrote that Climate Active or the department “should be asked if any of its [carbon neutral] certificates are misleading or deceptive”.
He told Guardian Australia he wanted the ACCC to establish whether it had jurisdiction to investigate the Climate Active program under consumer law.
“If the ACCC rules it does not have jurisdiction, then Climate Active and its sponsoring department should explain what legal advice they take to avoid misleading certificates,” he said. “On the face of it, some certificates do not pass muster.”
Fels said he was “not convinced” that Climate Active was doing enough to make sure all its certificates represented genuine action on climate change. Climate Active “should be independently investigated”, he said.
In February, the progressive thinktank the Australia Institute asked the ACCC to investigate Climate Active for potential breaches of consumer law.
Polly Hemming, the director of the institute’s climate and energy program, is a former communications manager at Climate Active.
She said there was no evidence Climate Active ensured businesses under the scheme were in fact “climate active” – a name that itself implied companies were taking genuine steps to cut their impact on global heating.
“Our prime concern is that, at a time when science tells us we need to reduce absolute emissions, the Australian government is running a program that does not enforce that and instead says to fossil fuel companies and other firms that it’s fine just to offset them.”
This month the ACCC issued draft guidelines to companies to avoid greenwashing – the practice of using environmental claims to distract or cover up environmentally damaging practices.
A United Nations expert group has said that best practice for claims around climate neutrality should put the purchase of offsets as a last resort after companies and governments had done everything they could to decarbonise their activities.
Audrey van Herwaarden, a corporate environmental performance analyst at the Australian Conservation Foundation, said: “Carbon neutral certifications, such as Climate Active, do not guarantee genuine emissions reductions in line with a science-based pathway to net zero.
“Unlike robust net zero commitments, carbon neutral claims allow companies to calculate their emissions for a given year and purchase carbon credits to offset their emissions, without requiring actions to significantly reduce emissions.”
Guardian Australia asked the climate change department about potential greenwashing and if Climate Active applicants were required to cut emissions before buying offsets.
In a statement, the department said businesses must develop an emissions reduction strategy and should aim to achieve emissions reductions wherever possible.
Climate Active drove “voluntary climate action” and included “best-practice requirements for emissions measurement, reduction and verification”, the department said.
Climate Active was “actively engaging with stakeholders regarding future opportunities to strengthen broader arrangements for voluntary action, as well as any implications arising from international trends and other government decisions”.
The department said as the program had evolved along with other government policies and programs “it has been appropriate to change the language”.
An ACCC spokesperson said the commission did not comment on ongoing or potential investigations.
“The ACCC is prioritising competition, consumer and product safety issues in relation to environmental claims and sustainability,” the watchdog said.
