The Australian Securities and Investments Commission (ASIC) has taken action in line with its 2023 mission to hold more companies accountable for greenwashing, as it initiates civil proceedings in the Federal Court against Active Super.
ASIC alleges the super fund has misled its customers by falsely portraying that it had eliminated investments posing significant risks to the environment and the community.
ASIC Deputy Chair Sarah Court emphasised that with heightened competition among super funds to attract new members, promises of industry exclusions must be substantiated with evidence.
“When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee,” she said.
Earlier this year, ASIC conducted an internet sweep of 247 businesses and found that 57 per cent were disseminating misleading information related to environmental or sustainability practices.
For the period between February 2021 and June 2023, ASIC alleges that Active Super held 28 holdings, either directly or indirectly, which exposed its members to securities it claimed to restrict.
Some of the investments the fund claimed to exclude included tobacco manufacturing, oil tar sands, gambling, and Russia following the invasion of Ukraine, although this was not the case.
The fund had ties to gambling companies such as SkyCity Entertainment Group (SKC), PointsBet (PBH), The Star Entertainment Group (SGR)The Lottery Corporation (TLC), and Tabcorp (TAH).
Tabacco company Amcor (AMC) and oil connections like NYSE-listed ConocoPhillips were linked, while coal mining ties were associated with Coronado Global Resources (CRN),New Hope Corporation (NHC) and Whitehaven Coal (WHC).
Russian connections included Gazprom PJSC and the Rosneft Oil company, which were supposedly cut off in May 2022. However, the Commission revealed that the partnership remained intact until June 2023.
ASIC believes that the ESG misrepresentations were made on Active Super’s website, in disclosure documents, and on social media platforms like Facebook, Instagram, and LinkedIn.
Active Super released a statement today, announcing that it could not comment much on the matter as it was now before the Federal courts.
“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,” the company wrote.