The Federal Court has ordered Mercer Superannuation to pay an $11.3 million penalty for greenwashing, in a case the Australian Securities and Investments Commission says is a landmark for the financial services industry.

Justice Christopher Horan said last week it is vital consumers can have confidence in environmental, social and governance claims made by financial services providers.

“Any misrepresentations in relation to ESG policies or practices associated with financial products or services, whether as an aspect of ‘greenwashing’ practices or otherwise, undermines that confidence to the detriment of consumers and the industry generally,” he said.

The court found Mercer made misleading statements online about seven “sustainable plus” investment options, marketed as excluding investments in companies involved in carbon-intensive fossil fuels such as thermal coal. Exclusions were also stated to apply to alcohol production and gambling.

But investments were made in 15 companies involved in the extraction or sale of carbon-intensive fossil fuels, including AGL, BHP, Glencore and Whitehaven, plus alcohol producers and gambling companies such as Crown Resorts and Tabcorp.

ASIC deputy chair Sarah Court says the regulator’s first greenwashing case before the Federal Court represents a “strong example” to the financial services industry.

“We will continue to monitor the market for ESG-related claims that cannot be validated by evidence to ensure the market is fair and transparent,” she said.