The industry fund has taken a 49 per cent stake in subscription vehicle provider Splend alongside IFM and other co-investors as it looks to build a 10 per cent exposure to climate solutions in its global portfolio.
After years of powering super returns into the double digits, US equities are walking a tightrope, and one misstep could send them plunging to earth. But the story that put them up there in the first place still holds true.
Mercer Super in the gun for greenwashing
ASIC alleges that Mercer Super, which has $65 billion under management, made misleading statements about the “sustainable nature and characteristics” of some of its superannuation investment options.
“This is the first time ASIC has taken an Australian entity to court regarding alleged greenwashing conduct, and it reflects our continuing efforts to ensure sustainability-related claims made by financial institutions are accurate,” said ASIC deputy chair Sarah Court (pictured).
ASIC alleges that Mercer made statements on its website about seven “Sustainable Plus” investment options that marketed the options as suitable for members who are “deeply committed to sustainability” because they excluded investments in companies involved in carbon intensive fossil fuels. But the options actually contained 15 companies involved in the extraction or sale of fossil fuels (including AGL and BHP); 15 companies involved in the production of alcohol; and 19 companies involved in gambling (including Aristocrat, Crown and Tabcorp).
“There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” Court said. “If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position. If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld.”
The regulator flagged potential action against super funds and investment managers back in October 2022 when, in an appearance before the standing committee on economics, Court said that sustainability issues “matter increasingly to investors” and that firms, entities and trustees “are responding to that interest by making all sorts of claims in order to attract investors”.
“The kinds of things that we’re looking at involve potential misleading or deceptive conduct by various listed entities, super fund trustees and one managed fund responsible entity,” Court said at the time. “These are investigations that are at an early stage at the moment.”
“We’re really focusing in on the ‘misleading and deceptive conduct’ part of our consumer protection framework, so looking at statements like claims about wanting to achieve net zero emissions by a particular time, claims about carbon neutrality and claims about an emissions reduction strategy.”
ASIC does think there has been an “uptick” in greenwashing and recently issued an information sheet on it to remind product providers of their obligations. It posed “simple questions” around whether product descriptions are true to label and whether they had a reasonable basis for their targets.
“We need to lift the tide in two ways,” Court said. “One is what will happen with international sustainability standards board, and we think the government is committed to doing consultation around whether or not that should be made mandatory by large listed and financial institutions in Australia. The other is what is required here in the supporting ecosystem to make that happen around consistent labelling, taxonomies and the rest of it.”
A Mercer spokesperson said that the fund had co-operated with ASIC throughout its investigation but declined to comment further as the matter is now before the courts.
