ASIC Regulator Chasing After Active Super Alleged “Greenwashing”

Posted on 08/14/2023

The Australian Securities & Investment Commission’s Sarah Court has taken an active approach to enforcing, and indeed determining, the law and finding clarification from the courts. One practice of concern to Sarah Court, Deputy Chair, is “greenwashing.” Court says action has already been taken in many cases, and she lists the following examples: “The proceedings that we have filed against Mercer Superannuation and Vanguard Investments Australia, in very broad terms, allege misrepresentations by those firms in relation to investment exclusions. Specifically, we allege that each of those firms promised that they would exclude investments in companies associated with fossil fuels, in circumstances where we say they did not. It is appropriate to recognize that both sets of proceedings are being defended.”

Now it’s Active Super’s turn. Active Super, a US$ 13.5 billion pension, allegedly held investments in tobacco, gambling, oil, and Russia on behalf of its members. Active Super is thought to have communicated that they would not hold these investments, according to Court. For example Active Super, through intermediaries, allegedly held an interest in Gazprom and gambling establishments Star Entertainment Group, PointsBet, Tabcorp and SkyCity, cigarette pack maker Amcor, and coal companies such as Coronado Global Resources.

Active Super says it welcomes Court’s involvement. Court noted, “When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee.”

Court hopes that through high-profile greenwashing cases, she can have an outsized influence on the practice throughout Australia: “We need to make careful choices about which matters we take on. We generally select matters with a broad reach, which is likely to have a deterrent effect beyond the particular issue we are prosecuting. Because we cannot take action on all matters, those that we do take on must send a strong signal of deterrence to the sector more broadly.”

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