Australia’s Federal Court has imposed a penalty of A$10.5 million (US$6.6 million) against superannuation fund Active Super for greenwashing in a case brought by the Australian Securities and Investments Commission (ASIC). ASIC initiated civil penalty proceedings against investment advisory LGSS Pty, as trustee of Active Super, in August 2023 saying it had engaged in greenwashing for failing to adhere to its commitments to eliminate investments that posed risks to the environment and the community, including gambling, coal mining and oil tar sands. The regulator also said Active Super retained holdings in Russian securities, despite representations that Russia was added to the list of excluded countries following the start of the war in Ukraine. In a statement, ASIC said the Federal Court found that LGSS’s contraventions were serious, as it used misleading representations to attract investors and enhance its reputation as a provider of investment funds with ESG characteristics. “As a result, investors lost the opportunity to invest in accordance with their investment values,” the court said. ASIC Deputy Chair Sarah Court said the Federal Court’s decision against Active Super is a “significant penalty that sends a strong message to companies making sustainable investment claims that those claims need to reflect the true position”. This is ASIC’s third successful greenwashing case. The regulator has had previous court successes against Vanguard Investments Australia in March 2024 and Mercer Superannuation in August last year.
