Greenwashing on Facebook – ASIC fines Future Super

What is Greenwashing?

In the context of financial services and the Australian Consumer Law (ACL), greenwashing (Greenwashing) refers to a misrepresentation of the environmental impact, sustainability or ethical nature of a financial product or investment strategy or goods and services.

Future Super Investment Services Pty Ltd (Future Super) was the recipient of an infringement notice issued by the Australian Securities and Investments Commission (ASIC) on 21 April 2023.  The infringement notice fined Future Super $13,320 for the company’s alleged Greenwashing claims made on Facebook.

Australian regulatory framework

In Australia, ASIC and the Australian Competition and Consumer Commission (ACCC) are the primary regulators responsible for greenwashing related misconduct.

Greenwashing and financial services

ASIC regulates Greenwashing activities in relation to financial services and is responsible for issuing infringement notices through the application of section 12GX of the Australian Securities and Investments Commission Act 2011 (Cth) (ASIC Act).  Future Super was issued an infringement notice for the company’s alleged breach of section 12DB(1)(a) of the ASIC Act.  This section is shown below:

“12DB  False or misleading representations

(1)  A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services:

(a)  make a false or misleading representation that services are of a particular standard, quality, value or grade;“

Greenwashing and misleading and deceptive conduct

The ACCC also regulates the making of Greenwashing statements through the application of the ACL.  Section 134A(2) of the Competition and Consumer Act 2010 (Cth) (CCA) enables the ACCC to issue infringement notices for the contravention of particular provisions of the ACL.  In relation to Greenwashing, an infringement notice can be issued for various contraventions, for example:

• false or misleading representations about goods or services pursuant to section 29 of ACL;
• misleading conduct as to the nature of goods pursuant to section 33 of ACL;
• misleading conduct as to the nature of services pursuant to section 34 of ACL; and
• misleading representations about certain business activities pursuant to section 37 of ACL.

The alleged Greenwashing statements by Future Super

The fine was in response to a Facebook post published by Future Super on 29 May 2019 which read:

‘’Naysayers don’t join together and move nearly $400 million out of fossil fuels’’

 While seemingly harmless:

• the publication implied that $400 million under Future Super’s fund had been moved out of fossil fuels;
• the total funds under management held by the fund was an estimated $400 million at the time of the publication;
• Future Super had no evidence to support that the entirety of the fund had been previously invested in fossil fuels; and
• Future Super exaggerated the positive environmental impact of the fund.

Although Future Super paid the infringement notice fine, it is significant to note that this does not infer guilt on Future Super.

Fines for Greenwashing are on the rise

ASIC has reportedly issued more than $150,000 in infringement notices for businesses that have engaged in Greenwashing activities since October 2022.  A list of the alleged Greenwashers and the corresponding infringement notices can be found on ASIC’s Infringement notices register.

Future Super isn’t the first superannuation company to be  fined for Greenwashing.  In February 2023,  ASIC commenced proceedings against Mercer Super in the Federal Court of Australia for Greenwashing activities.  Read more about this here.

How to ensure that you don’t make false Greenwashing claims

If your business uses its environmental sustainability or ethical conduct as a way to promote itself, it is important to ensure that these claims are:

• supported by a reasonable basis;
• supported by a quantifiable benefit;
• truthful in all respects;
• explained clearly; and
• not exaggerated.

For further resources on how to avoid Greenwashing, ASIC has an information sheet and the ACCC also supplies businesses with guidelines on Green marketing and Australian Consumer Law.

Links and further references about Greenwashing

Legislation

Australian Securities and Investments Commission Act 2011 (Cth)

Australian Securities and Investments Commission Act 2011 (Cth) section 12GX

Australian Securities and Investments Commission Act 2011 (Cth) section 12DB(1)(a)

Competition and Consumer Act 2010 (Cth)

Further information about greenwashing

If you need advice on Greenwashing compliance, contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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