Consumer awareness growing around carbon credentials

A CHOICE survey reveals that consumers notice carbon claims and they sometimes influence purchase decisions. But how reliable are they?

Need to know

  • New data shows consumers are increasingly taking note of businesses’ carbon credentials
  • But uncertainty remains for some people around whether to trust carbon neutral claims
  • Significant numbers of consumers are factoring carbon information into their spending decisions

This is an article from CHOICE. It was originally published on 9th June, 2022. 

In the last few years, pledges of reaching net zero or becoming carbon neutral have come from businesses across a wide range of sectors. At the same time, consumers have become more conscious of their purchases and their own carbon footprints. 

New data from CHOICE shows that customers are increasingly aware of companies’ carbon actions and many are factoring this information into their purchasing decisions. 

“The majority of Australians want to use their purchasing power for good,” says Dean Price, senior campaigns and policy adviser for CHOICE. “We’ve found that 65% of consumers are considering the carbon footprint of their purchases.”

Consumers aware of carbon claims 

CHOICE conducted a nationally representative survey of more than 1000 people between March and April 2022, to gauge their awareness and look at spending patterns when it comes to the environment and sustainability.

Overall there’s a high level of uncertainty about trusting businesses’ claims, and a lack of knowledge about what carbon neutral means.

A company or business is carbon neutral when, in net terms, they do not release any carbon into the atmosphere. They have either reduced their emissions to zero or have offset what emissions they do have in other ways. 

Trust issues

Businesses who make carbon neutral claims may face an uphill battle gaining consumer trust, with almost 4 in 10 people (38%) saying they’re uncertain about whether to trust carbon neutral claims from a business, and 26% saying they’re not very likely or unlikely to trust the information.  

Noticing the claims

Almost a third of people recall seeing carbon neutral claims or climate change policy from the grocery industry, such as from Coles or Woolworths supermarkets, with energy companies and airlines the next most frequently recalled industries. 

Influencing purchasing decisions

About a third of people (34%) say they’re more likely or very likely to buy from a business that claims to be carbon neutral. 

But the trust issue is still at play, with people almost evenly split between those who’d probably ignore the sustainability information because it’s not from a reliable source (27%), those who’d probably take the information on board (28%), and slightly more people being undecided (33%).

There’s also a contingent of people (almost 3 in 10, or 27%) who don’t find the businesses’ carbon claims important and would likely ignore them when making a purchase. Another 28% are undecided about whether they’d ignore the claims.

CHOICE’s Price says the survey shows customers are stepping up to the challenges of climate change and expect businesses and services to do the same.

Becoming carbon neutral

The growing investment by businesses in becoming carbon neutral is good news, but some scientific experts we spoke to suggest more needs to be done, and they express concerns about carbon-offsetting schemes. 

Daniel Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility (ACCR), says that instead of just focusing on buying carbon offsets to make a certain product or company carbon neutral, businesses should instead first focus on ways to decarbonise or reduce emissions from their supply chains. 

“For a lot of companies  there are options to decarbonise, whether it’s through how they source their electricity, to transport. Companies should really be looking at these first,” he tells CHOICE. 

Gocher says while it’s easy to grow cynical about carbon neutral claims, it’s important that consumers continue to push companies to adopt more environmentally friendly practices. He says businesses have to start somewhere, and those that show a willingness to engage with reducing their emissions should be acknowledged.

Government-backed carbon offsets

Companies looking to achieve carbon neutrality can go about it in a number of ways. Some focus on carbon-reduction efforts that will result in reduced emissions. For companies that want to be carbon neutral while they work towards fully eliminating carbon, participation in the government-backed Climate Active certification scheme, which allows for the certification of carbon offsets, is another option.

Carbon offsets are sometimes patches of land that have been protected or reforested, which use and store carbon dioxide from the atmosphere as the vegetation grows. They can also be renewable energy projects. 

There are other non-government carbon offsetting schemes, but Carbon Active is the only one with Australian government backing. The credits backed by this scheme are known as Australian carbon credit units (ACCUs).

Concerns about forestry carbon offsets 

For six and a half years Professor Andrew Macintosh was on the integrity committee of the Emissions Reduction Fund that administers ACCUs. In March he came out strongly criticising problems in the ACCU’s forestry schemes, saying the carbon credits being issued didn’t represent the real level of carbon abatement. 

“Unfortunately, Australia’s carbon market currently suffers from a distinct lack of environmental integrity,” he said at the time. 

“People are getting ACCUs for not clearing forests that were never going to be cleared; they are getting credits for growing trees that are already there; they are getting credits for growing forests in places that will never sustain permanent forests.”

Other experts, such as Dr Jessica Allen from the University of Newcastle, share some of Macintosh’s skepticism around the auditing of forestry carbon offsets. 

“They are generally built off a lot of assumptions, about how much carbon a tree can offset and how permanent that offset is, if it goes up in something like a bushfire,” she says. 

“In a true carbon neutrality pathway we see a company using different technologies and reducing their emissions, not just offsetting their emissions. Offsetting is what you do at the very end, once you’ve done everything [else] you possibly can,” she adds. 

Government department responds

We sent questions to Climate Active regarding Macintosh’s critiques. A spokesperson for the federal government’s Department of Industry, Science, Energy and Resources responded on Climate Active’s behalf, saying the claims were being “comprehensively evaluated” by the Emissions Reduction Assurance Committee. 

“Offsets (including ACCUs) eligible for use under Climate Active must meet best-practice offset integrity principles. These principles require that offset units are additional (unlikely to occur in the ordinary course of events), permanent, measurable, transparent, address leakage (account for material increases elsewhere that nullify the offset claimed), independently audited and registered,” the spokesperson says.

Financial sector emissions 

Gocher says one of the most dubious carbon neutral claims being made involved the financial sector, including from big banks that claim carbon neutrality while not counting the emissions resulting from their financial decisions to invest in companies such as fossil fuel companies. 

According to Climate Active certification, Australia’s biggest bank, the Commonwealth Bank of Australia, is carbon neutral, though a public disclosure statement shows this is only accounting for offsets of things such as building electricity use and the use of flights for staff. It doesn’t include so-called “financed emissions” that result from the bank’s financial investments. 

“For a bank, it would be much better to see them tackle their financed emissions and stop investing in fossil fuel projects, rather than simply [buying] offsets for their buildings’ electricity usage,” Gocher says. 

CBA did not respond to our questions about their carbon neutrality. Each of Australia’s big four banks (CBA, ANZ, NAB and Westpac) is carbon neutral certified, according to Climate Active.

Greener flights

More encouragingly, there are some businesses whose schemes are having an impact. Some airlines have voluntary schemes where customers can pay slightly more for their flights to include a carbon-offset option.

Susanne Becken, professor of sustainable tourism at Griffith University, says Qantas has had more success with the scheme than other airlines, partly because it had linked the purchasing of “green flights” to its rewards loyalty program, and also by matching customer offsets. 

About one in ten (11%) Qantas passengers chose to pay slightly more for carbon-offset flights, something Becken calls an “environmental donation”.

“Qantas’s scheme is a good scheme and I think customers will be willing to make that environmental donation (on top of their flight cost). Not all airlines are communicating to customers with the same transparency,” she says. 

The airline is also investing in sustainable aviation fuels to further reduce emissions. 

Pushing companies to change

Gocher says the emphasis and responsibility should be placed on large companies to change their practices and not always on the individual consumer to reduce their carbon footprint.

“The idea that individual responsibility will solve everything is kind of a false hope. I can buy an electric vehicle and put solar panels on my roof and there are still big emissions that only big corporations and governments can address,” Gocher says.

“Meaningful climate action requires governments and businesses to do their part, while also supporting consumers to reduce emissions,” says CHOICE’s Price. “To make environmentally friendly choices at the checkout, we need competitive markets supported by strong regulation. Because your carbon footprint matters, but businesses need to account for their footprint too.” 

“Personal changes that reduce your environmental impact are still important, and a great place to start,” he adds. “With two-thirds of Australians wanting to limit their impact, they are part of a growing movement of consumers considering climate change and the environment.”

Enjoy this article? Sign up to our monthly newsletter and stay up to date on the latest consumer policy news.