POWERED BY MOMENTUM MEDIA
Which super fund has fallen foul of ASIC’s greenwashing crackdown?
ASIC has commenced civil penalty proceedings in the Federal Court against the $13.5 billion Active Super fund for alleged greenwashing.
ASIC alleges Active Super made misleading conduct and misrepresentations to the market relating to claims it was an ethical and responsible superannuation fund.
Active Super represented on its website that it eliminated investments that posed too great a risk to the environment and the community, including tobacco manufacturing, oil tar sands and gambling. The fund also stated it had added Russia to its list of excluded countries, following the invasion of Ukraine.
Instead, ASIC alleges, Active Super directly or indirectly exposed its members to 28 holdings that it had claimed to restrict or eliminate between 1 February 2021 and 30 June 2023.
These included gambling, tobacco, oil tar sands and coal mining stocks such as The Star Entertainment Group and Whitehaven Coal as well as Russian entities Gazprom PJSC and Rosneft Oil Company.
Its Russian holdings remained in place in the portfolio as of 30 June 2023 despite the fund stating in May 2022 that it would stop investments in Russian companies in light of the war in Ukraine, one of several funds to do so.
In March 2022, former Treasurer Josh Frydenberg issued a statement that it had a "strong expectation that Australian superannuation funds will review their investment portfolios and take steps to divest any holdings in Russian assets".
ASIC alleges ESG misrepresentations were made on Active Super’s website, disclosure documents and on Facebook, Instagram and LinkedIn.
ASIC deputy chair, Sarah Court, said: “There is much competition among super funds for new members, and we know that funds seek to attract members with promises their investments will not be exposed to certain industries. When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee.”
The regulator is seeking declarations, pecuniary penalties, adverse publicity orders and an injunction against Active Super from the Court.
The date for the first case management hearing is yet to be scheduled.
A statement from Active Super said: "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. As the matter is before the courts we are unable to comment further.”
This is the third super fund that ASIC has commenced civil penalty proceedings against since the start of 2023 as it took action against Mercer Super in February and then against Vanguard Investments in July.
Mercer is alleged to have made misleading statements about its sustainable nature while Vanguard is alleged to made misleading claims about certain ESG exclusionary screens which were applied to investments in a Vanguard fund.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
