ASIC launches first greenwashing court proceedings – Regulatory & Government – Insurance News

The Australian Securities and Investments Commission (ASIC) has launched its first court action alleging greenwashing practice after highlighting it as a priority area for enforcement for this year.

ASIC has commenced civil proceedings in the Federal Court against Mercer Superannuation (Australia) Limited for allegedly making misleading statements about the sustainable nature and characteristics of some of its investment options.

Deputy Chair Sarah Court said the action reflected ASIC’s ongoing efforts to ensure that maintenance-related claims made by financial institutions were accurate.

“There is an increased demand for financial products related to sustainability, and with this comes a growing risk of marketing deception and greenwashing,” he said.

“If financial products make sustainable investment claims to investors and potential investors, they need to show the true position. If investments in certain industries such as fossil fuels are said to be excluded, this promise must be to stand.”

ASIC said website statements on the Sustainable Plus options offered by Mercer Super Trust highlighted that they were suitable for sustainability-focused members as they did not include investments in companies involved in carbon intensive fossil fuels such as thermal coal. Exemptions are also stated to apply to companies involved in alcohol production and gambling.

But ASIC says members who take out Sustainable Plus options have investments in companies involved in industries that the website claims are excluded.

ASIC is seeking declarations and monetary penalties from the court, injunctions preventing Mercer from continuing to make any of the allegedly misleading statements on its website, and orders requiring Mercer to make public the any violations found by the court.