Mercer sued in ASIC ‘greenwashing’ clampdown

The Australian Securities and Investments Commission is suing corporate super fund Mercer Superannuation in the watchdog’s first legal action against alleged greenwashing.

Mercer is accused of making misleading statements about the sustainable nature and characteristics of seven of its ‘Sustainable Plus’ investment options, which ASIC claims were in fact invested in 49 companies involved in fossil fuels, alcohol production and gambling.

ASIC is alleging the funds were marketed by Mercer as being suitable for members who were ‘deeply committed to sustainability’ on the basis they excluded investments in companies associated with those industries.

According to ASIC's claims, the members who took up Sustainable Plus options had investments in industries Mercer’s website said were excluded, including companies such as AGL, BHP, Glencore, Whitehaven Coal, Budweiser Brewing , Carlsberg, Heineken, Treasury Wine Estates, Aristocrat Leisure, Caesar’s Entertainment, Crown Resorts and Tabcorp.

Ultimately, ASIC claims Mercer made false and misleading statements and engaged in conduct that could mislead the public.

“This is the first time ASIC has taken an Australian entity to court regarding alleged greenwashing conduct, and it reflects our continuing efforts to ensure sustainability-related claims made by financial institutions are accurate,” ASIC deputy chair Sarah Court said.

Action against greenwashing – defined as the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical - is one of ASIC’s enforcement priorities for 2023.

“If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position,” Ms Court said.

“If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld.”