Australia regulator sues Mercer pension fund for greenwashing

MELBOURNE – Australia’s corporate regulator has launched its first court action against greenwashing, accusing pension fund Mercer Superannuation Australia 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 & Investments Commission (ASIC) said in a statement on Tuesday. But those products were actually invested in many companies with links to those industries, such as AGL Energy and BHP Group, the regulator alleges.

“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 like fossil fuels are said to be excluded, this promise must be upheld.”

ASIC had previously warned it was investigating companies over their green claims and has already issued fines worth more than A$140,000 (S$127,000) 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, said ASIC commissioner Danielle Press.

“This is very much a priority for ASIC,” Ms 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 emailed statement. “It would be inappropriate to comment further as the matter is now before the courts.” BLOOMBERG


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