Australian pension fund fined $11.3 million for greenwashing

Australian pension fund fined $11.3 million for greenwashing | Insurance Business Australia

Insurance News

Australian pension fund fined $11.3 million for greenwashing

Penalty marks a significant move by regulators to combat misleading environmental claims

Insurance News

By
Althea Javellana

Australian pension fund Mercer Superannuation Australia Ltd. has been slapped with an $11.3 million fine for greenwashing. The penalty marks a significant move by regulators to combat misleading environmental claims.

In February, the Australian Securities and Investments Commission (ASIC) initiated legal proceedings against Mercer, accusing the firm of falsely advertising certain investments as environmentally sustainable. This action culminated in a Federal Court decision that confirmed the fund’s breach of trust with misleading marketing.

Mercer’s questionable practices were specifically linked to their “Sustainable Plus” investment option. Despite claims of excluding investments in fossil fuels, alcohol, and gambling, it was revealed that Mercer was indeed invested in sectors it purported to avoid. This revelation not only underminedMercer’s credibility but also raised broader concerns across Australia’s $3.9 trillion pension sector, which faces growing scrutiny over environmental integrity, ASIC said.

A Mercer spokesperson acknowledged the court’s ruling and indicated that the company has since overhauled its marketing strategies to prevent future discrepancies. “We accept the court’s decision… regarding five marketing statements that were overly broad,” the spokesperson said.

The implications of this case extend beyond Mercer, as ASIC continues to tighten enforcement across the board. Recent judgments include a ruling against Active Super for similar misrepresentations and an ongoing case with Vanguard Investments Australia, where misleading claims about environmentally sustainable governance (ESG) practices are also under the microscope.