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Friday 2 December 2022

22-336MR ASIC issues infringement notices against investment manager for greenwashing

ASIC has issued three infringement notices to investment manager Vanguard Investments Australia Ltd (Vanguard) in further action against alleged greenwashing. 

ASIC was concerned that Product Disclosure Statements for the Vanguard International Shares Select Exclusions Index Funds (the Vanguard Funds) may have been liable to mislead the public by overstating an exclusion, otherwise known as an investment screen, claimed to prevent investment in companies involved in significant tobacco sales. 

Enforcement action against greenwashing is a current ASIC priority. Greenwashing is the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical. 

ASIC Deputy Chair Sarah Court said, ‘Greenwashing is not limited to environmental claims but extends to misleading ethical propositions. Entities which seek to promote ethical investing must ensure their statements are accurate and able to be substantiated.’ 

The Vanguard Funds were structured to exclude certain investments in tobacco, however, while this screen applied to exclude manufacturers of cigarettes and other tobacco products, it did not exclude companies involved in the sale of tobacco products. 

‘Investors can feel strongly about not investing in tobacco production, manufacturing and sales, and where tobacco-exclusion investments are promoted, the entity making those claims must be able to substantiate the full exclusion of those investments,’ concluded Ms Court. 

Vanguard paid $39,960 in compliance with the infringement notices on 1 December 2022. Payment of an infringement notice is not an admission of guilt or liability. The specific reasons for ASIC’s concerns are set out in the infringement notice which has been published on theCredit and ASIC Act infringements notices register. 


In October 2022, Tlou Energy Limited paid $53,280 in infringement notices in ASIC’s first action against greenwashing (22-294MR). 

ASIC’s Information Sheet 271 (INFO 271) provides information for responsible entities of managed funds and super fund trustees about how to avoid greenwashing when offering or promoting sustainability-related or ethical products and investments.