Key Takeaways
- • The Australian Securities and Investments Commission (ASIC) has sued Mercer Superannuation, a Marsh McLennan-owned super fund manager overseeing $27.5bn for more than 180,000 members, over alleged greenwashing in its Sustainable Plus investment option.
- • ASIC alleges the Sustainable Plus option held 15 fossil fuel companies (including Whitehaven Coal and BHP), 15 alcohol companies (including Budweiser Brewing and Heineken), and 18 gambling stocks (including Crown Resorts and Aristocrat Leisure) despite marketing that excluded such investments.
- • This is ASIC's first court action over greenwashing; the regulator had previously issued only infringement notices, and it is seeking penalties and an injunction against further misleading statements.
- • Mercer says it has cooperated with ASIC and will carefully consider the concerns, but has declined further comment while the matter is before the courts.
- • The action comes amid a broader Australian crackdown, with the Australian Competition and Consumer Commission making climate claims, including carbon credits, an enforcement priority.
Summary
The Australian Securities and Investments Commission has started civil legal proceedings against Mercer Superannuation, alleging the corporate pension fund misled members by investing in coal, other fossil fuels, alcohol and gambling stocks through a fund that promoted its sustainable credentials. According to The Guardian, this is ASIC's first court action over alleged greenwashing, a term describing misleading claims about a product's environmental and sustainable characteristics.
ASIC alleges that Mercer's Sustainable Plus investment option held 15 fossil fuel companies, including Whitehaven Coal and BHP; 15 alcohol companies such as Budweiser Brewing and Heineken; and 18 gambling stocks, including Crown Resorts and poker machine maker Aristocrat Leisure. Mercer marketed the option as suitable for members who are "deeply committed to sustainability" because it excluded investments in carbon-intensive fossil fuel companies, and it also stated exclusions for alcohol and gambling companies. ASIC is seeking penalties and an injunction preventing Mercer from continuing to make the alleged misleading statements on its website. Publisher reports describe the action as relating to statements about seven Sustainable Plus options offered by the Mercer Super Trust.
ASIC deputy chair Sarah Court said in a statement that growing demand for sustainability-related financial products brings a growing risk of misleading marketing and greenwashing. "If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld," she said. ASIC has previously issued infringement notices over alleged greenwashing but had not pursued legal action before this case.
Mercer, which is owned by US-listed professional services firm Marsh McLennan, confirmed it is subject to civil proceedings. The fund said it "has cooperated with Asic throughout its investigation, and will continue to carefully consider Asic's concerns," and that it would be inappropriate to comment further while the matter is before the courts. Publisher reports indicate that a settlement was later reached, with Mercer agreeing to pay an $11.3 million penalty; this development is not reflected in the primary source and is noted here only as reported elsewhere.
The case forms part of a wider regulatory push against greenwashing in Australia. The Australian Competition and Consumer Commission has said it will scrutinise climate claims, including the use of carbon credits, as an enforcement priority, citing the growing number of consumers making purchasing decisions based on sustainability credentials.
ASIC alleges that Mercer's Sustainable Plus investment option held 15 fossil fuel companies, including Whitehaven Coal and BHP; 15 alcohol companies such as Budweiser Brewing and Heineken; and 18 gambling stocks, including Crown Resorts and poker machine maker Aristocrat Leisure. Mercer marketed the option as suitable for members who are "deeply committed to sustainability" because it excluded investments in carbon-intensive fossil fuel companies, and it also stated exclusions for alcohol and gambling companies. ASIC is seeking penalties and an injunction preventing Mercer from continuing to make the alleged misleading statements on its website. Publisher reports describe the action as relating to statements about seven Sustainable Plus options offered by the Mercer Super Trust.
ASIC deputy chair Sarah Court said in a statement that growing demand for sustainability-related financial products brings a growing risk of misleading marketing and greenwashing. "If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld," she said. ASIC has previously issued infringement notices over alleged greenwashing but had not pursued legal action before this case.
Mercer, which is owned by US-listed professional services firm Marsh McLennan, confirmed it is subject to civil proceedings. The fund said it "has cooperated with Asic throughout its investigation, and will continue to carefully consider Asic's concerns," and that it would be inappropriate to comment further while the matter is before the courts. Publisher reports indicate that a settlement was later reached, with Mercer agreeing to pay an $11.3 million penalty; this development is not reflected in the primary source and is noted here only as reported elsewhere.
The case forms part of a wider regulatory push against greenwashing in Australia. The Australian Competition and Consumer Commission has said it will scrutinise climate claims, including the use of carbon credits, as an enforcement priority, citing the growing number of consumers making purchasing decisions based on sustainability credentials.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.