Climate Active is changing, let's get ready together

November 2023

What do the experts think...

In October 2023, the Australian Government announced its proposed updates to the Climate Active certification program. The key changes to be aware of include:

  • Companies will be required to disclose their short-term and long-term carbon reduction targets, including disclosure of their actual achieved emissions reductions;
  • Companies will be required to source a minimum percentage of renewable energy;
  • "Carbon neutral" as an organisational status will be phased out.

So what is Climate Active?

Originally, it was designed as a carbon neutral certification scheme managed by the Australian Department of Climate Change, Energy, the Environment and Water. As of October 2023, Climate Active has over 700 certifications, which includes local governments, large and small businesses, and not for profit organisations. Certified entities can use the certification trademark, with the aim of supporting consumer confidence about voluntary climate claims. You can find a list of certified entities here.

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Climate Active changes in detail

Reporting gross emissions reduction

Climate Active certification at present is based on reaching carbon neutrality, which relies on offsetting any emissions that participating entities do not reduce in other ways. There is not however any requirement for members to demonstrate a minimum level of gross emissions reduction.

Climate Active would require participating entities to set a near-term (between 2025-2035) and long-term (between 2040 and 2050) gross emissions reduction target that covers Scope 1, 2 and 3.

Replacing "carbon neutral" status

The Government proposes to replace “carbon neutral” with a new term and seeks input from stakeholders as to what term might be appropriate.

Mandating renewable energy consumption

There is no requirement for participants of the program to source a minimum amount of renewable electricity or set their emissions liability using the market-based approach. It is proposed that participating entities seeking certification will be required to source a minimum percentage of renewable electricity.

Why is Climate Active changing?

Critics of the program have argued that 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. 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. These changes will embed a clear commitment to emissions reduction, allowing companies to decarbonise alongside their investment in carbon offsets.

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