A superannuation fund is being sued by Australia’s financial watchdog for allegedly misrepresenting itself as “ethical and responsible”.
Active Super allegedly held investments in tobacco, gambling and fossil fuels, including Russian oil and gas companies.
The fund claimed to have eliminated investments that posed too great a risk to the environment and the community, the Australian Securities and Investments Commission (ASIC) said in a statement on Aug. 11.
Following the invasion of Ukraine, Active Super also claimed to have blacklisted Russia for investment, despite allegedly maintaining interests in majority Russian state-owned oil and gas company Gazprom PJSC, and the Moscow-based Rosneft Oil Company.
Gazprom appears on a U.S. sanctions list heavily restricting investment in key Russian companies.
ASIC has commenced civil penalty proceedings in the Federal Court against Active Super, alleging misleading conduct and misrepresentations to the market.
The financial watchdog alleges 28 of Active Super’s direct or indirect holdings between Feb. 1, 2021, and June 30, 2023, were contradictory to how it presented itself.
The company’s investments in major gambling companies are also among those of concern to ASIC, including Star Entertainment Group, PointsBet, Tabcorp and SkyCity.
Also being probed are investments in cigarette packet manufacturer Amcor and coal miners including Coronado Global Resources, New Hope Group and Whitehaven.
The company said in a statement it had co-operated with ASIC’s investigation and welcomed increased scrutiny on environmental, social and governance disclosure standards as good for the super industry and consumers.
ASIC deputy chair Sarah Court said with high rates of competition among super funds, many were seeking to attract members with promises their investments will not be exposed to certain industries.
“When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee,” Court said.
It is the third time ASIC has sought civil penalties from a company for greenwashing after earlier targeting Mercer Super and Vanguard Investments Australia.
Active Super, formerly known as Local Government Super, manages around $13.5 billion (US$8.8 billion) for roughly 80,000 customers.
