The Australian Securities and Investments Commission (ASIC) has launched its first court action alleging greenwashing conduct after highlighting it as an enforcement priority area for this year.

ASIC has commenced civil proceedings in the Federal Court against Mercer Superannuation (Australia) Limited for allegedly making misleading statements about the sustainable nature and characteristics of some of its investment options.

Deputy Chair Sarah Court says the action reflects ASIC’s continuing efforts to ensure sustainability-related claims made by financial institutions are accurate.

“There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” she 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.”

ASIC says website statements on Sustainable Plus options offered by the Mercer Super Trust highlighted that they were suitable for members committed to sustainability because they excluded investments in companies involved in carbon intensive fossil fuels like thermal coal. Exclusions were also stated to apply to companies involved in alcohol production and gambling.

But ASIC alleges that members who took up the Sustainable Plus options had investments in companies involved in industries the website statements said were excluded.

ASIC is seeking declarations and pecuniary penalties from the court, injunctions preventing Mercer from continuing to make any of the alleged misleading statements on its website, and orders requiring Mercer to publicise any contraventions found by the court.