The ACCC did a broad sweep of corporate environmental claims and found plenty of greenwashing. But let’s dive into one area: certification.
Australia's 'Climate Active'
The Australian Government's 'carbon neutral' certification scheme is called Climate Active.
Here's how it works:
Upshot: If companies buy enough offsets to cover their emissions, they are certified as 'carbon neutral' (effective immediately), even if real emissions are rising.
Climate Active aims to use its currency — a certification trademark — to encourage companies to be carbon neutral so they appeal to consumers.
But it is facing scathing criticism.
In February, The Australia Institute filed a complaint with the ACCC, claiming Climate Active may be misleading and deceptive under consumer law. A Senate inquiry into greenwashing heard the same.
Companies with Climate Active certifications: 529 (21 pending). Chart below shows them by industry.
Science Based Targets
The Science Based Targets initiative (SBTi) is an independent group that validates corporate targets and tracks their progress.
Targets must be ‘science-based’, which means aligned with the level of decarbonisation needed to meet the Paris Agreement.
How it works: A crucial difference is SBTi refuses to allow companies to use carbon offsets to meet targets. Offsets can only be used to mop up the last 10% of emissions,* after delivering real reductions across all scopes.
Upshot: Science-based targets are far more onerous. A company has only reached net-zero when it has achieved its long-term target in reductions, and offset the few remaining emissions.
While SBTi has been called the gold standard for corporate climate pledges, the group has been criticised for governance issues and its fee-based model, which some say is a conflict of interest.
Companies with science-based targets or commitments to set them:
Less Net, More Zero
The SBTi movement is most developed in Europe. The UK has the most companies with science-based targets, with 1027.
Adjusting for population, the top country outside of Europe is New Zealand. Among OECD countries, Australia sits in the middle.
Companies with science-based targets in OECD countries:
Companies with science-based targets in OECD countries, per million:
An aversion to science-based targets is somewhat understandable. Decarbonising is voluntary and hard. The SBTi criteria are demanding and companies risk ignominious removal from the public database if they don’t deliver (which recently happened to Amazon). But it’s useful for us to be aware of companies making green claims, especially about net zero, without committing to the rigorous schema that would deliver them.
You can view the lists of companies yourself, as well as their disclosures, at Science Based Targets and Climate Active.