Which super fund has fallen foul of ASIC’s greenwashing crackdown?
ASIC has commenced civil penalty proceedings in the Federal Court against the $13.5 billion Active Super fund for alleged greenwashing.
ASIC alleges Active Super made misleading conduct and misrepresentations to the market relating to claims it was an ethical and responsible superannuation fund.
Active Super represented on its website that it eliminated investments that posed too great a risk to the environment and the community, including tobacco manufacturing, oil tar sands and gambling. The fund also stated it had added Russia to its list of excluded countries, following the invasion of Ukraine.
Instead, ASIC alleges, Active Super directly or indirectly exposed its members to 28 holdings that it had claimed to restrict or eliminate between 1 February 2021 and 30 June 2023.
These included gambling, tobacco, oil tar sands and coal mining stocks such as The Star Entertainment Group and Whitehaven Coal as well as Russian entities Gazprom PJSC and Rosneft Oil Company.
Its Russian holdings remained in place in the portfolio as of 30 June 2023 despite the fund stating in May 2022 that it would stop investments in Russian companies in light of the war in Ukraine, one of several funds to do so.
In March 2022, former Treasurer Josh Frydenberg issued a statement that it had a "strong expectation that Australian superannuation funds will review their investment portfolios and take steps to divest any holdings in Russian assets".
ASIC alleges ESG misrepresentations were made on Active Super’s website, disclosure documents and on Facebook, Instagram and LinkedIn.
ASIC deputy chair, Sarah Court, said: “There is much competition among super funds for new members, and we know that funds seek to attract members with promises their investments will not be exposed to certain industries. When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee.”
The regulator is seeking declarations, pecuniary penalties, adverse publicity orders and an injunction against Active Super from the Court.
The date for the first case management hearing is yet to be scheduled.
A statement from Active Super said: "Active Super has co-operated with ASIC’s investigation and welcomes increased scrutiny on ESG disclosure standards as being good for members, the super industry and the community. As the matter is before the courts we are unable to comment further.”
This is the third time that ASIC has commenced civil penalty proceedings for alleged greenwashing since the start of 2023 as it took action against Mercer Super in February and then against Vanguard Investments in July.
Mercer is alleged to have made misleading statements about its sustainable nature while Vanguard is alleged to have made misleading claims about certain ESG exclusionary screens which were applied to investments in a Vanguard fund.