A government climate action scheme accused of abetting corporate greenwashing has not done anything improper, a department representative says.
Climate Active is a government program aimed at driving businesses to make voluntary climate action by offering certification for entities that have reached a state of "carbon neutrality."
As Australians become more concerned about the impacts of climate change and attempt to live more sustainably, Climate Active has fallen under the microscope.
During a Senate inquiry into greenwashing on Monday, representatives from the consumer watchdog revealed the Climate Active trademark had not yet received agency approval due to a lack of clarity around the scheme's rules.
But Department of Climate Change, Energy, the Environment and Water Deputy Secretary Jo Evans said this was not out of the ordinary, but she acknowledged issues with the program.
"(Climate Active) has been around for a long time, is evolving and is subject to a current review," she told the Senate committee.
"Up until now, we're certain there isn't anything improper about what has been done, but that doesn't mean it's perfect."
According to the Australian Competition and Consumer Commission, "greenwashing" describes false or misleading environmental claims that make businesses appear more environmentally beneficial than they really are.
Though the consumer and financial services watchdogs have attempted to clamp down on these practices among businesses, Australia Institute climate and energy program director Polly Hemming said the government was undermining these efforts.
"You can't address greenwashing by the private sector when the government's own climate policies are facilitating some of that behaviour," she told the inquiry.
"We've got a government that is still subsidising fossil fuels, yet businesses are expected to be making emissions reductions plans."
Climate Active, specifically, encourages organisations to offset their emissions by investing in new technology, changing the way they operate and purchasing carbon offsets.
But Climate Council scientists and other environmental groups say carbon offsets allow companies to continue polluting and cannot replace genuine emissions reductions.
Additionally Ms Hemming said the program was riddled with administrative failures, relied on voluntary claims and was displacing regulatory roles, she said.
Even Fuel giant Ampol had been granted a Climate Active certification because of a single product: its "carbon-neutral" petrol.
"It's cheaper to greenwash in Australia: it's cheaper to buy carbon offsets, it's cheaper to pay a certification fee to Climate Active and buy offsets from a wind farm than it is to implement the technology," Ms Hemming said.
"This is what I mean by state-sponsored greenwashing."
She noted the program was not a failure of the current Labor government but the culmination of successive failures over time and has urged Climate Active be referred to the Auditor-General.
Inquiry chair and Greens senator Sarah Hanson-Young called the revelations "outrageous" and urged for stronger laws to ban misleading environmental claims.
