The Federal Court of Australia has fined Active Super $10.5 million for investing in gambling companies and other restricted sectors while promoting itself as an ethical investment option.
The superannuation fund, which serves over 86,000 members, claimed to exclude investments posing risks to the environment and community, specifically naming gambling operations. However, an ASIC investigation found that Active Super continued to invest in gambling entities, including SkyCity Entertainment Group, PointsBet Holdings, and Tabcorp.
Sarah Court, the ASIC Deputy Chair, mentioned:
This 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 case demonstrates ASIC’s commitment to taking on misleading marketing and greenwashing claims made by companies promoting financial services. It is our third greenwashing court outcome, and we will continue to keep greenwashing in our sights.
Furthermore, Active Super continued to invest in Whitehaven Coal, Shell Plc, and Russian entities Gazprom PJSC and Rosneft Oil Company, despite claiming to exclude coal mining, oil tar sands, and Russian investments after the Ukraine invasion.
Before its merger with Vision Super on March 1, Active Super managed approximately $14.7 billion in assets.
Justice O’Callaghan added:
It was not disputed that LGSS’s contraventions were serious. LGSS benefitted from its misleading conduct by misrepresenting the ‘ethical’ nature of a significant part of its investments, which on any view enhanced its ability to attract investors to the Active Super fund and enhanced 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 violations took place over approximately two and a half years, with Active Super’s misleading claims appearing across various channels, including its website, product disclosure statements, and impact reports.
When confronted by ASIC, the fund “ran a host of contrived arguments in its defence,” according to O’Callaghan.
This case marks ASIC’s third successful greenwashing court action.
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