Australian super fund fined $10.5 million for greenwashing

An Australian super fund has been fined $10.5 million for greenwashing. The Federal Court found that Active Super, formerly called Local Government Superannuation Scheme, misled its members about its investment practices. The court discovered that Active Super claimed to have stopped investing in industries like gambling, coal mining, and oil tar sands. It also said it had eliminated investments in Russia after the country's invasion of Ukraine. However, the fund actually held investments in coal mining companies, such as Whitehaven Coal and Coronado Global Resources, between February 2021 and June 2023. Justice David O'Callaghan stated that Active Super's claims were misleading and that consumers would not easily distinguish between different types of investments. This case highlights the efforts of the Australian Securities and Investments Commission (ASIC) to tackle false or misleading environmental claims made by companies. Active Super has 30 days to pay the penalty and cover ASIC's legal costs. The court ordered the super fund to inform its members about the ruling. Justice O'Callaghan noted that the fund gained recognition and attracted investors by misrepresenting its ethical practices. He emphasized that this misrepresentation deprived investors of opportunities to align their investments with their values.