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Super fund in strife for greenwashing

The Australian Securities and Investments Commission (ASIC) has urged the Federal Court to fine superannuation giant Mercer $11.3 million for greenwashing.

At a penalty hearing on Thursday, ASIC also sought declarations and an adverse publicity order against the fund, which it alleged made misleading statements about its Sustainable Plus investment options.

The regulator said the statements marketed options to members who were “deeply committed to sustainability” because the options excluded investments in companies involved in carbon intensive fossil fuels. Exclusions were also stated to apply to companies involved in alcohol production and gambling.

However, ASIC alleged the options included investment in:

  • 15 companies involved in the extraction or sale of carbon intensive fossil fuels (including AGL Energy Ltd, BHP Group Ltd, Glencore PLC and Whitehaven Coal Ltd);
  • 15 companies involved in the production of alcohol (including Budweiser Brewing Company APAC Ltd, Carlsberg AS, Heineken Holding NV and Treasury Wine Estates Ltd); and
  • 19 companies involved in gambling (including Aristocrat Leisure Limited, Caesar’s Entertainment Inc, Crown Resorts Limited and Tabcorp Holdings Limited).

The case is ASIC’s first alleging greenwashing conduct in the financial services industry. Since launching the Mercer action in February, the regulator has filed proceedings against Vanguard Investments and LGSS Pty Ltd (Active Super).

Justice Horan reserved his decision, saying it was unlikely he would make a determination before Christmas.

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