ASIC has issued an infringement notice to superannuation trustee Diversa Trustees Limited (Diversa) in further action against alleged greenwashing.
Diversa is the issuer of superannuation product Cruelty Free Super (CFS), as trustee for Professional Super, a sub-fund of the Tidswell Master Superannuation Plan. ASIC was concerned that statements on CFS’ website may have been false or misleading by overstating exclusions, otherwise known as investment screens. In these statements, CFS claimed to prevent investment in companies involved in ‘polluting and carbon intensive activities’, ‘financing or support of activities which cause environmental and social harm’ and ‘poor corporate governance’.
While some investment screens were applied by CFS, they were more specific and implemented on a more limited basis than CFS’ website had suggested.
ASIC Deputy Chair Sarah Court said, ‘ASIC had concerns that the statements made regarding CFS were too broad, potentially misleading consumers as to the extent of the investment screening being implemented. As consumers increasingly look to more sustainable and ethical investing, including via their superannuation, ASIC wants to make sure funds have the evidence to back their claims and are not promising exclusions that they can’t guarantee.’
Greenwashing is the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical and is an enforcement priority for ASIC.
Diversa paid $13,320 in compliance with the infringement notices on 22 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 the Credit and ASIC Act infringements notices register.
ASIC has previously issued infringement notices in action against greenwashing. In December 2022, Vanguard Investments Australia Ltd paid $39,960 in infringement notices (22-336MR) and in October 2022, Tlou Energy Limited paid $53,280 in infringement notices (22-294MR).
ASIC’s Information Sheet 271 How to avoid greenwashing when offering or promoting sustainability-related products (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.