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Australian Pension Mercer Fined $7.3 Million for Greenwashing

Pedestrians exit a train station in Sydney, Australia, on Tuesday, Feb. 6, 2024. Australia’s central bank kept interest rates unchanged at its first meeting of a revamped policy schedule and signaled further tightening remains possible, sending the currency and bond yields higher. Photographer: Lisa Maree Williams/Bloomberg (Lisa Maree Williams/Bloomberg)

(Bloomberg) -- Australian pension fund Mercer Superannuation Australia Ltd. was ordered to pay an A$11.3 million fine ($7.3 million) for greenwashing, bringing the corporate regulator’s first court action over the issue to a close.

The Australian Securities and Investments Commission launched the case in February last year, alleging Mercer misled investors in the marketing of some sustainable products. The Federal Court on Friday handed down its judgment and the fine, which the parties had agreed to at a previous hearing. 

Australia’s A$3.9 trillion pensions industry has come under increasing pressure to justify environmental claims, with pledges in the sights of watchdogs globally as investors commit to net zero targets. ASIC has taken multiple cases against investors over greenwashing claims amid the heightened focus. 

The Federal Court found Mercer had engaged in conduct that was “liable to mislead the public” through its Sustainable Plus option that claimed to exclude fossil fuels, alcohol and gambling, but was actually invested in some companies linked to those activities. 

“We accept the Court’s decision handed down today regarding five marketing statements that were overly broad,” a spokesperson for Mercer said in an emailed statement. “We have cooperated with ASIC and undertaken a comprehensive review of our internal marketing processes and procedures.”

In June, ASIC was largely successful in proving its case that pension fund Active Super made a number of misrepresentations, the Federal Court ruled. In a separate case, Vanguard Investments Australia was found to have made some misleading ESG claims. Penalties are yet to be decided in both cases. 

©2024 Bloomberg L.P.