The Federal Court has found that LGSS Pty Limited, trustee of the superannuation fund Active Super, made misleading representations about its environmental, social, and governance (ESG) credentials. Active Super claimed it avoided investments harmful to the environment and community, such as gambling, coal mining, and oil tar sands, and excluded Russian investments following the invasion of Ukraine. However, from 1 February 2021 to 30 June 2023, Active Super invested in securities it claimed to have excluded, both directly and indirectly through managed funds or ETFs.
Justice O’Callaghan stated that a reasonable consumer would not distinguish between direct and indirect investments and found Active Super's claims misleading. While the Court did not find Active Super’s representations about tobacco packaging or Russian and oil tar sands investments misleading, it upheld the remaining allegations by ASIC.
On 5 June 2024, Justice O’Callaghan ruled that Active Super’s use of terms like “not invest,” “No Way,” and “eliminate” in relation to gambling, coal mining, Russian entities, and oil tar sands investments were unequivocal and misleading. At the time of publishing these representations, Active Super held investments in companies such as SkyCity Entertainment Group Ltd, Pointsbet Holdings Ltd, Gazprom PJSC, Sberbank of Russia, ConocoPhillips, Shell Plc, Whitehaven Coal Limited, and Coronado Global Resources.
ASIC Deputy Chair Sarah Court emphasised the significance of this outcome in addressing misleading marketing and greenwashing claims in the financial services industry. The Court will consider the appropriate form of declaratory relief and the pecuniary penalty at a later date.
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