Mercer Superannuation has been ordered by the Federal Court to pay a $11.3 million penalty in relation to misleading statements that ‘greenwashed’ the sustainable nature and characteristics of some of the investment options available to its members.
The order was handed down by the court as part of a case brought by the Australian Securities and Investments Commission (ASIC) in regards to claims on the Mercer Superannuation website that seven Sustainable Plus investment options offered by the Mercer Super Trust excluded specific types of companies.
The court found Mercer made the misleading statements on its website about the options by claiming they excluded companies involved in or deriving profit from the production or sale of alcohol, gambling and extraction or sale of carbon-intensive fossil fuels.
It also found members who took up the Sustainable Plus options actually had investments in 15 companies associated with the extraction or sale of carbon-intensive fossil fuels, 15 involved in the production of alcohol and 19 linked to gambling.
Mercer Superannuation admitted it made the statements and has agreed to pay ASIC’s costs, but in handing down his decision Justice Horan noted the contraventions were serious.
“They arose from failures by Mercer to implement adequate systems to ensure that ESG (environmental, social and governance) claims in relation to its superannuation products were accurate and to monitor and enforce the application of any sustainability exclusions associated with such ESG claims,” Justice Horan said.
ASIC deputy chair Sarah Court added: “This was ASIC’s first greenwashing case brought before the Federal Court; a landmark case both for ASIC and for the financial services industry. It demonstrates the importance of making accurate ESG claims to investors and potential investors.”
Court said the corporate watchdog would continue to take action in regards to greenwashing and currently has cases against Vanguard Investments Australia and Active Super before the Federal Court concerning the misleading practice.
