Corporate watchdog on the hunt in greenwashing crackdown
In an Australian first, ASIC has started court action against financial services firm Mercer over the “greenwashing” of some of its superannuation options.
ASIC was seeking pecuniary penalties over greenwashing claims
The civil action relates to allegations that Mercer made misleading statements about the sustainability of its Sustainable Plus investment options.
The option was promoted as being suitable for members who were deeply committed to sustainability because they excluded investments in carbon intensive companies, like thermal coal.
“Exclusions were also stated to apply to companies involved in alcohol production and gambling,” ASIC said.
However, ASIC has alleged that investments were made in some of Australia’s biggest coal and gas companies including AGL, BHP, Glencore and Whitehaven. Investments were also allegedly made in Budweiser Brewing APAC, Carlsberg, Heineken and Treasury Wine Estates and 19 companies involved in gambling including Crown, Aristocrat, Caesers and Tabcorp.
“In doing so, ASIC alleges Mercer made false and misleading statements and engaged in conduct that could mislead the public,” the consumer watchdog said.
ASIC deputy chair Sarah Court said this was the first time ASIC had taken an Australian entity to court regarding greenwashing conduct and it reflected the organisation’s efforts to ensure sustainability-related claims made by financial institutions were accurate.
It follows on from issues raised in the Financial Services Royal Commission which led to legislative amendments and allowed ASIC to take action over a broader range of superannuation trustee conduct.
There has been a global push against the practice of greenwashing with allegations made against companies like H&M.
The corporate climate responsibility monitor released this month claimed 24 global companies were involved in greenwashing at some level.
“There is increased demand for sustainability-related financial products and with that comes the growing risk of misleading marketing and greenwashing,” Court said.
“If financial products make sustainable investment claims to investors and potential investors they need to reflect the true position. If investment in certain industries like fossil fuels are said to be excluded this promise must be upheld.”
ASIC said it had also issued infringement notices to several companies totalling $140,000 in response to concerns relating to greenwashing.
It is seeking declarations and pecuniary penalties from the court and injunctions against Mercer from continuing to make any of the alleged misleading statements on its website.
