A corporate regulating agency is suing Australian corporate pension fund Mercer Superannuation for allegedly leveraging greenwashing tactics against its members, the Guardian reported.
The Australian Securities and Investments Commission (ASIC) has begun legal proceedings against Mercer for allegedly misleading its members by misappropriating investment funds that touted sustainable credentials while investing in coal and other dirty energy sources, as well as alcohol and gambling stocks.
Greenwashing describes the practice of making misleading claims about a product or companies' environmental and sustainable efforts and credentials.
According to ASIC, Mercer made statements on its website about seven "Sustainable Plus" investment options offered by its Mercer Super Trust, which it marketed to members who "are deeply committed to sustainability," as the fund allegedly excluded investments in companies involved in carbon-intensive energy sources.
However, ASIC alleges in its complaint that members who pursued Mercer's Sustainable Plus options had investments in companies involved in industries the website explicitly said were excluded, including 15 companies involved in the extraction or sale of dirty energy sources.
"There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing," ASIC deputy chair Sarah Court said in a press release.
The extraction and burning of dirty energy sources like coal and methane gas are detrimental to our health and the health of our planet.
Their use releases harmful pollutants into our atmosphere that can lead to heart attacks, respiratory disorders, asthma, premature death, and other complications.
Misleading clients and consumers who are putting in honest effort to make sustainable decisions, as ASIC is alleging Mercer did, is not only immoral — it may also be a criminal offense.
"If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position," Court said in the press release. "If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld."
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