ASIC commences proceedings against Active Super for alleged greenwashing
Active Super has been hit with civil penalty proceedings from the Australian Securities and Investments Commission (ASIC) following alleged greenwashing in its Impact Report.
The Federal Court proceedings allege that Active Super misled the market and consumers and relates to claims it was an ethical and responsible superannuation fund.
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This follows the news last week that a legal claim against EnergyAustralia was launched in an Australian first, after ASIC launched proceedings against Vanguard for greenwashing, following a crackdown on greenwashing in recent months, bringing its first court action for greenwashing in February this year and warning of more to come in March.
In late March, an Australian Competition and Consumer Commission (ACCC) complaint was lodged against Etihad Airways after the airline displayed allegedly greenwashed advertisements during a 2022 soccer match, following civil proceedings launched by ASIC against Mercer Super back in February and Future Super receiving an infringement notice from ASIC in May after concerns were raised about a Facebook post.
Active Super, which has approximately $13.5 billion in superannuation assets and 89,000 members, 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. Active Super also stated that it had added Russia to its list of excluded countries following the invasion of Ukraine.
However, ASIC alleges in its claim that Active Super exposed its members to investments it claimed to restrict or eliminate, according to deputy chair Sarah Court.
“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,” Ms Court said.
From 1 February 2021 to 30 June 2023, Active Super is alleged to have held 28 holdings, either directly or indirectly, which exposed members to securities it claimed to restrict, including those relating to gambling, tobacco, Russian entities, coal mining and oil tar sands.
ASIC also alleges that following the commencement of the war in Ukraine in February 2022, Active Super made representations from May 2022 that it would stop investments in Russian companies even though Active Super had holdings in Russian securities, which remained in place as at 30 June 2023.
Active Super allegedly published environmental, social and governance (ESG) misrepresentations on its website, in addition to producing misleading disclosure documents and on Facebook, Instagram and LinkedIn.
ASIC is seeking declarations, pecuniary penalties, adverse publicity orders and an injunction against Active Super from the court.