The Australian Securities and Investments Commission (ASIC) is suing the superannuation fund “Active Super” over alleged misrepresentations in how the fund handles ESG issues. The fund claimed that it had eliminated certain holdings which contribute to climate or social problems. However, upon examination the fund was still found to hold high emitting sectors and socially problematic companies. Responsible Investor covered the announcement, stating that:
“Active Super allegedly stated on its website that it had eliminated investments that were ‘too great a risk to the environment and community’, including tobacco manufacturing, oil tar sands and gambling.
However, ASIC claimed that from 1 February 2021 to 30 June this year, Active Super held a total of 28 holdings, either directly or indirectly, which exposed investors to securities the super fund said it restricted.”
This lawsuit is the third in a series of enforcement actions by the ASIC, including litigation against Mercer Super and Vanguard Investments. Australia isn’t the only country interested in cracking down on greenwashing in the financial sector: the US SEC’s Climate and ESG Taskforce has also brought several enforcement actions against financial services firms – and others – for alleged misrepresentations.
Sustainable finance is at the center of the transition economy. Greenwashing poses a major risk to the market’s ability to adapt and limits investor’s access to accurate and reliable information. As more investors take an interest in ESG, regulators globally are cracking down on false and misleading statements. More than ever, corporate ESG disclosures must be accurate and reflect validated data.
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