ob体育 has launched its first court action against alleged greenwashing conduct, commencing civil penalty proceedings in the Federal Court against Mercer Superannuation (Australia) Limited (Mercer) for allegedly making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
ob体育 Deputy Chair Sarah Court said, 鈥楾his is the first time ob体育 has taken an Australian entity to court regarding alleged greenwashing conduct, and it reflects our continuing efforts to ensure sustainability-related claims made by financial institutions are accurate.鈥�
ob体育 alleges Mercer made statements on its website about seven 鈥楽ustainable Plus鈥� investment options offered by the Mercer Super Trust, of which Mercer is the trustee. These statements marketed the Sustainable Plus options as suitable for members who 鈥榓re deeply committed to sustainability鈥� because they excluded investments in companies involved in carbon intensive fossil fuels like thermal coal. Exclusions were also stated to apply to companies involved in alcohol production and gambling.
However, ob体育 alleges members who took up the Sustainable Plus options had investments in companies involved in industries the website statements said were excluded. For example:
- 15 companies involved in the extraction or sale of carbon intensive fossil fuels (including AGL Energy Ltd, BHP Group Ltd, Glencore PLC and Whitehaven Coal Ltd);
- 15 companies involved in the production of alcohol (including Budweiser Brewing Company APAC Ltd, Carlsberg AS, Heineken Holding NV and Treasury Wine Estates Ltd); and
- 19 companies involved in gambling (including Aristocrat Leisure Limited, Caesar鈥檚 Entertainment Inc, Crown Resorts Limited and Tabcorp Holdings Limited).
In doing so, ob体育 alleges Mercer made false and misleading statements and engaged in conduct that could mislead the public.
鈥楾here is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing. If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position. If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld,鈥� concluded Ms Court.
ob体育 has issued over $140,000 in infringement notices in response to concerns about alleged greenwashing, which include Tlou Energy Limited (22-294MR), Vanguard Investments Australia (22-336MR), Diversa Trustees Limited (22-379MR) and Black Mountain Energy (23-001MR).
Action against greenwashing is one of ob体育鈥檚 2023 Enforcement Priorities and this proceeding is our first court action in this regard.
This proceeding is also the first time ob体育 has commenced court action after legislative amendments, arising from the Financial Services Royal Commission, enhanced ob体育鈥檚 powers to take action regarding a broader range of superannuation trustee conduct.
ob体育 is seeking declarations and pecuniary penalties from the Court. ob体育 also seeks injunctions preventing Mercer from continuing to make any of the alleged misleading statements on its website, and orders requiring Mercer to publicise any contraventions found by the court.
The date for the first case management hearing is yet to be scheduled by the Court.
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Background
Sustainable Plus Investment Options are available to members of the Mercer Super Trust through the 鈥楽elect-your-own鈥� investment options, which allows members to blend options to suit their needs and are marketed 鈥榝or potential members that are deeply committed to sustainability鈥�, comprise a higher proportion of sustainability-themed assets and are subject to additional investment exclusions of companies in certain sectors.
ob体育鈥檚 Information Sheet 271 (INFO 271) provides information for responsible entities of managed funds and super fund trustees about how to avoid greenwashing when offering or promoting sustainability-related or ethical products and investments.
Editor's note 1:
This media release was updated on 9 March 2023 with the Originating Process and Concise Statement documents.
Editor's note 2:
The matter has been listed for a case management hearing on 12 May 2023.
Editor's note 3:
The matter has been listed for a further case management hearing on 6 July 2023. 聽
Editor's note 4:
The case management hearing for Mercer was adjourned until Friday 18 August 2023.
Editor's note 5:
The matter has been listed for hearing on 7 December 2023.
Editor's note 6:
The hearing concluded on 7 December 2023. Judgment has been reserved.聽