More than 100 companies have now left the scheme in the past 2½ years, including the Clean Energy Finance Corporation, the federal government’s $30 billion “green bank”.

EnergyAustralia will remain in the scheme but the company’s chief customer officer, Kate Gibson, said there were concerns about the value of the program.

“While EnergyAustralia participated in the Climate Active certified carbon offset program in good faith, today EnergyAustralia accepts that there is legitimate public concern about the efficacy of these programs,” she said.

“Carbon offsets should not be used to delay or diminish the important work that needs to be done to actively decarbonise. EnergyAustralia is now focused on more effective ways of helping its customers to directly reduce the emissions associated with their energy use.”

Parents for Climate chief executive Nic Seton said his members believed EnergyAustralia’s marketing of “Go Neutral” amounted to greenwashing. “Climate claims must be backed by real action – not marketing spin,” he said.

“EnergyAustralia’s statement makes clear that offsets should not be used as a licence to pollute. It is no longer tenable to market polluting products as ‘carbon-neutral’ and lead customers to believe that by signing up they are doing good for the planet.”

Equity Generation Lawyers principal lawyer David Hertzberg, representing Parents for Climate, said EnergyAustralia had acknowledged his client’s key argument that carbon offsets do not undo the harm to the climate of burning fossil fuels.

“Our client hopes that today’s clear statement from EnergyAustralia sets a new standard for corporate conduct around the use of offsets and climate claims,” he said.

“Companies need to seriously consider whether the environmental claims they make stack up – particularly, as this case shows, when claiming that their polluting products are ‘carbon-neutral’.”