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For the first time in history, ASIC has launched a court action over allegations of greenwashing conduct. Civil penalty proceedings have begun 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 on its website.

Mercer marketed seven investment options, named “Sustainable Plus”, as suitable for members who “are deeply committed to sustainability” because they excluded investments in companies involved in carbon-intensive fossil fuels, alcohol production and gambling.

However, ASIC alleges Mercer made false statements that could mislead the public. ASIC claims members who signed up for “Sustainable Plus” had investments in those industries the website said were excluded. This included 15 companies involved in the extraction or sale of carbon-intensive fossil fuels, 15 companies involved in the production of alcohol, and 19 companies involved in the gambling industry.

“There is increased demand of sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” ASIC Deputy Chair Sarah Court said in a statement.

“If financial products make sustainable investments claims to investors and potential investors, they need to reflect the true position. If investments in certain industries (…) are said to be excluded, this promise must be upheld.”

ASIC is seeking financial penalties, as well as injunctions preventing Mercer from continuing to make any of the alleged misleading statements on its website, and orders requiring Mercer to publicise any infringements found by the court.

Action against greenwashing is one of ASIC’s 2023 Enforcement Priorities. This proceeding is the first time ASIC has commenced court action after legislative amendments that strengthen the Commission’s powers to take action regarding a broader range of superannuation trustee conduct.

“This is the first time ASIC 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,” Court said.

The date for the first case management hearing is yet to be scheduled.