ASIC wins A$11.3m sustainability penalty

Australia’s Federal Court ordered Mercer Superannuation (Australia) to pay A$11.3 million after ASIC’s first court greenwashing case over misleading sustainability claims. (asic.gov.au) The ruling, published on August 2, 2024, covered seven “Sustainable Plus” investment options offered through the Mercer Super Trust. Mercer had admitted making misleading statements about their sustainable characteristics. (asic.gov.au) (ashurst.com) Mercer’s website said the options were designed for members “deeply committed to sustainability” and excluded carbon-intensive fossil fuels, alcohol production and gambling. The court found those claims did not match the underlying holdings. (asic.gov.au) ASIC said members in those options still had exposure to 15 fossil-fuel companies, 15 alcohol companies and 19 gambling companies. The list included AGL Energy, BHP Group, Glencore, Whitehaven Coal, Heineken Holding, Crown Resorts and Tabcorp. (asic.gov.au) Greenwashing cases turn on a simple question: whether a product sold as “ethical” or “sustainable” actually follows the screens and exclusions used in its marketing. In this case, Justice Horan said Mercer’s admitted contraventions were serious and stemmed from inadequate systems to keep its ESG claims accurate. (asic.gov.au) ASIC had made greenwashing a strategic priority from 2022, and its August 2024 report said it had made 47 interventions in the 15 months to June 30, 2024. Those included two civil penalty proceedings, eight infringement notices and 37 corrective disclosure outcomes. (download.asic.gov.au) The Mercer matter was the first ASIC greenwashing case to end with a Federal Court civil penalty, but it did not remain the high-water mark for long. On September 25, 2024, the same regulator won a A$12.9 million penalty against Vanguard Investments Australia over misleading ESG screening claims. (asic.gov.au) That sequence matters for fund managers, super trustees and listed companies making climate or sustainability claims in public documents, websites and videos. ASIC and the court both framed the issue as investor protection: if exclusions are advertised, firms need evidence and controls showing they were actually applied. (asic.gov.au) (ashurst.com) Mercer’s case closed with a large penalty, a corrective disclosure outcome and a court record that ASIC now cites as part of a broader enforcement campaign. In Australia’s sustainability crackdown, the message from the Mercer ruling was that marketing language now has to line up with portfolio reality. (asic.gov.au) (download.asic.gov.au)