Morningstar rapped over alleged nuclear weapon investments

morningstar ASIC sustainalytics greenwashing

1 December 2023
| By Jasmine Siljic |
image
image
expand image

ASIC has issued two infringement notices to Morningstar for alleged exposure to controversial weapons investments, including nuclear weapons.

Morningstar has paid $29,820 in complying with the infringement notices, which relate to ASIC alleging its investor funds were exposed to controversial weapons investments.

This was despite Morningstar’s ESG policy which claimed such investments would be excluded.

In particular, its Morningstar International Shares (Unhedged) Fund’s product disclosure statement stated it would exclude certain securities or sectors based on environmental, social or governance factors, as listed in the ESG Policy. 

However, the fund had direct exposure to securities in weapon companies for short periods of time. These were:

  • Honeywell International Inc;
  • General Dynamics Corp;
  • Leidos Holdings Inc;
  • Northrop Grumman Corp;
  • Raytheon Technologies Corp.

Morningstar Sustainalytics, its ESG research arm, has recognised that these firms have been involved in controversial weaponry. This specifically includes the development or production of nuclear weapons, or providing core components for them.

In particular, the fund was exposed to Honeywell International from 2 November to 18 November 2022, being the date the shareholding was divested after Morningstar had become aware of it.

It also had exposure to General Dynamics, Leidos Holdings, Northrop Grumman and Raytheon Technologies securities from 31 May 2023 to 13 June 2023 on subsequent occasions. 

Morningstar reported the incidents to ASIC and paid the infringement notices on 30 November. 

However, payment of an infringement notice is not an admission of guilt or liability, ASIC stated.

Read more about:

AUTHOR

Add new comment

The content of this field is kept private and will not be shown publicly.
 

Recommended for you

 

MARKET INSIGHTS

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

baffled

I don't have any faith in the regulator. I've stopped reading these and just think some poor guy got busted for a spell...

1 day 10 hours ago
Chris Cornish

By having trustees supervise client directed payments from their pension funds, Stephen Jones and the federal Labor gove...

4 days 16 hours ago
Chris Cornish

Now we now the size of Stephen Jones' CSOLR tax, I doubt anyone will be employer any new financial adviser from this poi...

4 days 16 hours ago

AustralianSuper and Australian Retirement Trust have posted the financial results for the 2022–23 financial year for their combined 5.3 million members....

10 months 2 weeks ago

A $34 billion fund has come out on top with a 13.3 per cent return in the last 12 months, beating out mega funds like Australian Retirement Trust and Aware Super. ...

10 months ago

The verdict in the class action case against AMP Financial Planning has been delivered in the Federal Court by Justice Moshinsky....

10 months 2 weeks ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND