The Australian Securities & Investments Commission (ASIC) has initiated a court action against the superannuation fund, Active Super.
ASIC alleges that Active Super made misleading claims relating to its ESG (Environmental, Social, and Governance) investments. They assert that the fund falsely informed members that it had removed certain sectors from its investments which were actually retained.
ASIC plays a pivotal role in ensuring transparency and fairness in Australia’s financial markets, corporate sectors, and financial services. They act to regulate and oversee these sectors, ensuring the protection of investors and customers.
The core of the allegation is around the claims Active Super made about its ESG investments. Active Super allegedly stated on its digital platforms that it shunned investments posing significant environmental and community risks, citing sectors like tobacco, nuclear weapons, oil tar sands, and gambling as some of the sectors it had eliminated from its portfolio.
However, contradicting their own statements, between February 2021 and June 2023, Active Super maintained 28 holdings that posed risks in the mentioned sectors. The list includes companies such as the casino operator Skycity Entertainment Group, tobacco manufacturer Amcor, and Russian oil and gas enterprises Gazprom and Rosneft.
Furthermore, as of June 30, 2023, Active Super still had investments in Russian securities, even after declaring in May 2022 that they’d stop investing in Russian firms.
This is not the first such action by ASIC. This is their third greenwashing penalty proceedings of the year, having already commenced cases against Marsh McLennan company Mercer Superannuation and Vanguard Investments Australia.
ASIC Deputy Chair Sarah Court remarked, “There is much competition among super funds for new members, and we know that funds seek to attract members with promises their investments will not be exposed to certain industries. When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee.”
Reacting to ASIC’s action, Active Super stated, “Active Super has co-operated with ASIC’s investigation and welcomes increased scrutiny on ESG disclosure standards as being good for members, the super industry and the community. As the matter is before the courts we are unable to comment further.”
Lastly, it was highlighted by ASIC that they are seeking various legal actions against Active Super, including declarations, penalties, adverse publicity orders, and an injunction.
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