“Sustainability” is a word that’s used a lot these days. The contexts in which it’s used vary, but it often appears in announcements by organisations that are proposing to invest in major projects, are considering taking a financial stake in a corporation or are promoting financial products to the public.
In doing so, they are acknowledging community expectations about the importance of meeting certain standards and practices, for example, with respect to the environment or the acceptability of participating in certain industries.
It should be expected that where an organisation makes claims about these issues that their claims are true. However, the Australian Securities and Investments Commission (ASIC) has announced that it “has launched its first court action against alleged greenwashing conduct, commencing civil penalty proceedings in the Federal Court against Mercer Superannuation (Australia) Limited (Mercer) for allegedly making misleading statements about the sustainable nature and characteristics of some of its investment options”.
ASIC alleges that Mercer “made statements on its website about seven Sustainable Plus investment options offered by the Mercer Super Trust of which Mercer is the trustee”. According to ASIC, Mercer marketed the Sustainable Plus options as suitable for members who “are deeply committed to sustainability” because they excluded investments in companies involved in fossils fuels, alcohol production and gambling. ASIC went on to list the companies involved in industries that the Mercer website said were excluded.
ASIC alleges that “Mercer made false and misleading statements and engaged in conduct that could mislead the public”. It also noted its concern that increased demand for sustainability-related products will be accompanied by the growing risk of misleading marketing and greenwashing.
Of course, it’s most important to note that these are allegations that are yet to be tested in court. However, in the meantime, this action by ASIC is a timely reminder to trustees of superannuation funds and other organisations which promote financial products to the public to make sure that their claimed standards and practices can be justified if called upon to do so.
It’s also a reminder to consumers, investors and superannuation fund members, especially the growing cohort of Australians (especially young Australians) who are keenly interested in issues of sustainability. Be sceptical. Carefully read and research the claims that are made to induce you to stay with your current provider or to invest your hard earned savings with them. You can access the full release by ASIC here.
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