Australia’s corporate regulator has launched its first court action against greenwashing, accusing pension fund Mercer Superannuation Australia Ltd of misleading investors in the marketing of some sustainable products.
Mercer Super Trust offered “Sustainable Plus” funds that it said excluded investments linked to fossil fuels, alcohol production and gambling, the Australian Securities and Investments Commission (ASIC) said in a statement yesterday.
However, those products were actually invested in many companies with links to those industries, such as AGL Energy Ltd and BHP Group Ltd, the regulator said.
“There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” ASIC Deputy Chair Sarah Court said in the statement. “If investments in certain industries such as fossil fuels are said to be excluded, this promise must be upheld.”
ASIC had previously said that it was investigating companies over their green claims and has already issued fines of more than A$140,000 (US$94,085) to several firms, including one pension fund.
The Mercer civil court action comes amid heightened scrutiny of the marketing of sustainable products globally, with the UK regulator also proposing tougher rules to tackle the issue.
Further enforcement in Australia is likely as investigations into pension funds and other financial institutions continue, ASIC Commissioner Danielle Press said.
“This is very much a priority for ASIC,” Press said in an interview. “This is an ongoing issue for us to be looking at and I would expect to see more compliance and enforcement action from ASIC over the coming 12 months.”
Mercer Superannuation, which has more than 180,000 members, is in the process of merging with larger pension fund BT Super.
“Mercer has co-operated with ASIC throughout its investigation, and will continue to carefully consider ASIC’s concerns,” a spokesperson for Melbourne-based Mercer Superannuation said in an e-mailed statement. “It would be inappropriate to comment further as the matter is now before the courts.”
In separate news, Australia’s government plans to double the tax on large pension balances to 30 percent from 2025 or 2026, a change it says would affect less than 0.5 percent of account holders and make the system more sustainable.
The surprise decision to target those with superannuation balances above A$3 million comes as the government confronts rising debt amid growing spending pressures on defense, health, aged care and disability support, Australian Treasurer Jim Chalmers said.
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