ASIC's Greenwashing Lawsuit Against Active Super

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by KnowESG
KnowESG_ASIC's Greenwashing Lawsuit Against Active Super
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ASIC has initiated legal proceedings in the Federal Court against LGSS Pty Limited (Active Super), claiming that the company engaged in deceptive practices and provided false information to the market regarding its status as an ethical and responsible superannuation fund.

On its website, Active Super conveyed that it had taken steps to eliminate investments associated with significant environmental and community risks, including areas such as tobacco manufacturing, oil tar sands, and gambling. Additionally, Active Super announced the exclusion of Russia from its investments in response to the Ukrainian conflict.

ASIC contends that Active Super exposed its members to investments it purported to avoid. Sarah Court, Deputy Chair of ASIC, emphasised the competitive landscape among super funds in attracting new members. She emphasised that such funds need to substantiate their assertions with credible evidence and ensure that the promised exclusions are feasible.

Between February 1, 2021, and June 30, 2023, ASIC alleges that Active Super held 28 investments, either directly or indirectly, that contradicted its claimed restrictions. These holdings included, among others:

  • Gambling-related investments: Skycity Entertainment Group Limited, PointsBet Holdings Limited, The Star Entertainment Group Limited, The Lottery Corporation Limited, and Tabcorp Holdings Limited.

  • Tobacco-related investment: Amcor PLC

  • Russian entities: Gazprom PJSC and Rosneft Oil Company

  • Investments related to oil tar sands: ConocoPhillips

  • Investments related to coal mining: Coronado Global Resources Inc., New Hope Corporation Limited, and Whitehaven Coal Limited

ASIC further alleges that despite claiming to halt investments in Russian companies after the outbreak of the Ukraine conflict in February 2022, Active Super continued to hold Russian securities until June 30, 2023.

Active Super is accused of making misleading claims regarding environmental, social, and governance (ESG) factors not only on its website but also in disclosure documents and across social media platforms like Facebook, Instagram, and LinkedIn.

This marks the third instance where ASIC has pursued legal action against companies engaging in greenwashing practices, with previous cases involving Mercer Super and Vanguard Investments Australia.

In response, ASIC is seeking various remedies from the Court, including declarations, pecuniary penalties, orders for adverse publicity, and an injunction against Active Super.

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Source: ASIC

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