Australian Superannuation Fund Faces $10.5 Million Penalty for Greenwashing Practices
Australian Regulators Crack Down on Greenwashing and AML/CTF Breaches
In a series of recent enforcement actions, Australian regulators have taken a firm stance against financial institutions and gambling companies found to be in breach of regulations.
The Australian Federal Court has ordered a penalty of AUD 10.5 million ($6.70 million) to Active Super for misleading investors. Justice O'Callaghan admonished Active Super's conduct, stating that it violated the trust of those seeking ESG-aligned investments. The misleading representations by Active Super bolstered its ability to attract investors while misrepresenting the "ethical" nature of its investments. The case against Active Super, which is operated by LGSS Pty Ltd, signals that companies can no longer use false sustainability claims as a marketing point without facing legal consequences. This newest fine marks ASIC's third major greenwashing case.
Active Super remained directly and indirectly involved in controversial companies like SkyCity Entertainment, Gazprom, Shell, and Whitehaven Coal. The misconduct was discovered by the Australian Securities and Investments Commission (ASIC) and persisted for two years due to the failure of senior management to enforce proper compliance mechanisms.
Meanwhile, SkyCity Entertainment Group, operated by a company based in New Zealand, had to pay a record AU$67 million fine imposed in June 2024 for severe AML and CTF law breaches. The scandal may also draw renewed scrutiny to SkyCity Entertainment Group, as the company faced backlash for its Auckland casino's smoking policies in the past.
ASIC has intensified its actions against false ESG marketing, holding companies accountable for deceptive sustainability claims. ASIC deputy chair Sarah Court hopes the legal action against Active Super will send a clear message to similar companies. The continued enforcement efforts by Australian regulators underline the regulatory pressure on financial institutions and gambling companies.
These developments underscore the importance of transparency and ethical practices in the financial and gambling industries. Companies must ensure that their marketing and investment practices align with their stated values to maintain the trust of their investors and the public.
