(Adds details, comment from Mercer, Market Forces)
By Praveen Menon and Sameer Manekar
Feb 28 (Reuters) - Australia's corporate regulator
launched legal action against pension fund Mercer Superannuation
on Tuesday, accusing it of misleading members about the
sustainability of some of its investment options.
The Australian Securities & Investments Commission's (ASIC)
said this was its first court action alleging "greenwashing", or
exaggerated claims of environment-friendly investment and
products, which has garnered increased attention as interest
rises in sustainable and ethical investment options.
ASIC said last year it was stepping up oversight of
climate-related reporting and was investigating several
companies and financial institutions for suspected greenwashing.
Mercer said in a statement that it has cooperated with ASIC
throughout its investigation and that it would be inappropriate
to comment further as the matter is now before the courts.
The regulator's case refers to Mercer statements on its
website about seven "Sustainable Plus" investment options, which
were marketed as suitable for members "deeply committed to
sustainability" since the options excluded investments in
companies involved in carbon-intensive fossil fuels, such as
thermal coal, or in alcohol production and gambling.
However, those investment options had holdings in companies
such as BHP Group , the world's largest listed miner,
and Australia's top power producer and carbon emitter AGL Energy , among others that the statements had indicated would
be excluded, the regulator said.
The investment options also listed holdings in 15 alcohol
production companies, including Budweiser Brewing Company APAC
Ltd, Carlsberg AS, Heineken Holding NV and Treasury Wine Estates
Ltd, and 19 companies involved in gambling, including Aristocrat
Leisure Limited, Caesar's Entertainment Inc, Crown Resorts
Limited and Tabcorp Holdings Limited.
"In doing so, ASIC alleges Mercer made false and misleading
statements and engaged in conduct that could mislead the
public," ASIC said.
"There is increased demand for sustainability-related
financial products, and with that comes the growing risk of
misleading marketing and greenwashing."
Activist investor group Market Forces said ASIC's legal
action should send shockwaves through the superannuation
industry and through corporate Australia more broadly.
"Greenwashing needs to be stamped out because it's
undermining real climate action and potentially misleading
millions of super fund members," said Brett Morgan,
Superannuation Funds Campaigner at Market Forces.
(Reporting by Praveen Menon in Sydney and Sameer Manekar in
Bengaluru; Editing by Rashmi Aich and Edmund Klamann)
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