Super fund caught greenwashing

The Australian Securities and Investments Commission (ASIC) will seek penalties against Active Super after a declaration from the Federal Court that the fund had engaged in greenwashing for almost two years.

On 5 June, the court found Active Super – which has $13.5 billion in assets and 89,000 members – had made misleading ESG claims by advertising that it had eliminated investments which posed too great a risk to the environment and the community, including gambling, coal mining and oil tar sands.

After the invasion of Ukraine, it also claimed Russian investments were “out”.

The court found that between February 2021 and June 2023, Active Super, via its trustee LGSS, invested in securities it had claimed were eliminated or restricted by ESG screens.

The fund held direct and indirect investments in companies including:

  • SkyCity Entertainment Group Ltd and Pointsbet Holdings Ltd (gambling)
  • Gazprom PJSC and Sberbank of Russia (Russian entities)
  • ConocoPhillips and Shell Plc (oil tar sands)
  • Whitehaven Coal Limited and Coronado Global Resources (coal mining)

Justice O’Callaghan rejected Active Super’s claims that an ordinary or reasonable consumer would distinguish between holding shares in a company and indirect exposures through pooled funds.


“It seems to me that such a consumer would not draw that distinction, including in particular because there is nothing in the Impact Reports or on the LGSS website that suggests that the claims that there was, for example, “No way” Active Super would invest members funds in gambling, tobacco and so on, was to be read subject to a proviso that there was a way in which it would do exactly that, by investing indirectly, not directly,” he said.

The misleading representations were made on its website, reports and disclosure documents.

Justice O’Callaghan found that language such as “not invest”, “No Way” and “eliminate” was unequivocal and not the subject of any potential qualifications by the fund’s “Sustainable and Responsible Investment Policy”.

“If such a consumer was told, as they were told, that there was “No way” that LGSS would invest in tobacco or gambling, he or she would not search around for some investment policy that might qualify such statements,” he said.

“Absent some indicator on the face it, such as a footnote or asterisk with some accompanying statement that the apparently unqualified language was, in fact, something that was subject to qualifications or limitations, they would have no reason to.”

The court also found that Active Super did not engage in misleading representations in relation to its holdings in companies involved in the production of packaging used for tobacco products.


On Thursday, Justice O’Callaghan made declarations for ASIC that Active Super had contravened ss 12DB(1)(a) and 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth) by making false or misleading representations, and engaging in conduct liable to mislead the public in relation to investments made by the superannuation fund.

ASIC will now seek pecuniary penalties, adverse publicity orders and injunctive relief.

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