(Bloomberg) -- Australia’s federal court has fined Vanguard Investments Australia Ltd. A$12.9 million ($8.9 million) for making misleading claims about a fund, the highest penalty issued in the country so far over greenwashing.
In March, the court found the investment giant made numerous false or misleading claims surrounding the environmental, social and governance factors of its nearly A$1 billion Ethically Conscious Global Aggregate Bond Index Fund. As well as the fine, Vanguard has been ordered to publish a notice about the misconduct on its website for 12 months.
“Vanguard apologizes to its clients for these errors, which were unintentional,” a Melbourne-based spokesperson said in an emailed statement, adding that the firm has reviewed relevant internal processes and strengthened procedures, governance, technology and training.
The case was brought by the Australian Securities and Investments Commission as the watchdog ramps up its focus on environmental claims by companies and money managers. ASIC in August said it had made almost 50 regulatory interventions to address greenwashing in the 15 months through June.
The fine for Vanguard tops the penalty handed to Mercer Superannuation Australia Ltd. in August, which was ordered to pay A$11.3 million after ASIC sued the firm over misleading investors over some sustainable products.
Australia will introduce mandatory climate disclosures from January, and is also developing ESG labeling standards for products being marketed as sustainable.
(Updates with comment from Vanguard)
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