This year’s top 10 stories included a peek into AustralianSuper’s international equities build out in London, AMP’s move to slash employee benefits, and plenty of hard-hitting analysis of the issues that matter in institutional investment. But the real story is how readers helped shape all of that coverage.
Orbis’ Stuart Place is riding from Melbourne to the Moon and Back to fund a treatment for the “monster of a disease” that his youngest son was born with. The investment industry is rallying behind him.
Active Super hit in ASIC’s greenwashing crackdown
ASIC has commenced a greenwashing case against Active Super, accusing it of misleading conduct and misrepresentations to the market. ASIC says that Active – formerly Local Government Super, and currently merging with Vision Super to create a new $27 billion fund – represented itself as an ethical superannuation fund in its marketing materials while holding on to companies from industries it claimed to exclude, including gambling (Skycity Entertainment, PointsBet, The Star, Tabcorp and the Lottery Corporation), tobacco (Amcor PLC), coal mining (Coronado, New Hope and Whitehaven) and tar sands (ConocoPhillips).
It also held on to Russian entities it allegedly claimed it had divested from, including Gazprom PJSC and Rosneft Oil Company. ASIC alleges that ESG misrepresentations were made on Active’s website, disclosure documents and on Facebook, Instagram and LinkedIn.
“There is much competition among super funds for new members, and we know that funds seek to attract members with promises their investments will not be exposed to certain industries,” said ASIC deputy chair Sarah Court (pictured). “When making these claims super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee.’
The industry’s view of previous greenwashing cases has been that most stem from poor internal controls – i.e. the investment team and the marketing team not sharing information to make sure that what’s on the label matches what’s in the tin. What’s more interesting in this case will be the nature of Active’s Russian holdings and whether it was even aware that it still owned them.
During the initial invasion of Ukraine by Russia, then-Treasurer Josh Frydenberg said it was the government’s “strong expectation” that super funds dump any Russian holdings to deliver a “clear and unequivocal signal” that Australia condemned the invasion, though divestment efforts were stymied by the forced closure of the Moscow Stock Exchange and bans on local brokers selling assets on behalf of foreign investors.
At the time, Active said that it had Russian equity holdings equal to 0.1 per cent of its then-$14 billion assets, managed externally, and that it was looking for ways to get rid of them. Its current register of investment managers lists two that run emerging market strategies – Wellington Management and Macquarie Investment Management. Both were named in ASIC’s concise statement, though the Russian assets in question were mostly held in Macquarie’ ‘s emerging markets fund with a “First Date Held” of 30 June 2021 – prior to the invasion. Wellington has exposure to Gazprom, a Russian majority state-owned energy corporation.
Active declined to comment on the case or the nature of the Russian holdings as the matter was before the courts, saying only that it had co-operated with ASIC’s investigation and “welcomes increased scrutiny on ESG disclosure standards”.
Active isn’t the first super fund to wind up in ASIC’s crosshairs over greenwashing. The $65 billion Mercer Super Trust found itself in court in March over allegations that it had made misleading statements about the “sustainable nature and characteristics” of some of its superannuation investment products, while ASIC told Parliament in 2022 that it would be taking a closer look at potential misleading and deceptive conduct related to greenwashing.
