An Australian superannuation fund, Active Super—previously known as the Local Government Superannuation Scheme—has been fined $10.5 million due to greenwashing practices. The Federal Court determined that the fund misled both its existing and potential members by claiming to have fully divested from investments in gambling, coal mining, and oil tar sands. Furthermore, Active Super asserted that it had eliminated Russian investments in response to the country’s actions in Ukraine.
Justice David O’Callaghan discovered that, contrary to these claims, Active Super had maintained investments in such sectors, specifically holding stakes in coal companies like Whitehaven Coal and Coronado Global Resources from February 2021 to June 2023. The court dismissed Active Super’s defence, which suggested that consumers would distinguish between direct investments and those made through pooled funds.
This ruling stands as a significant victory for the Australian Securities and Investments Commission (ASIC), which has been actively addressing instances of companies making false or misleading assertions about their environmental or ethical practices. The court ordered Active Super to pay the penalty within 30 days of receiving the notice, along with covering ASIC’s legal expenses. Additionally, the fund is obligated to inform its members about the findings.
Justice O’Callaghan highlighted that by misrepresenting its ethical investment credentials, Active Super was able to enhance its appeal to investors and bolster its reputation. This deception ultimately denied investors the chance to align their investments with their ethical principles. The misleading statements released by the company spanned its website, member communications, media interviews, and various official reports.