Australia's corporate watchdog has welcomed a $11.3 million court penalty against a superannuation giant in a "landmark" greenwashing case.
The Australian Securities and Investments Commission last year launched Federal Court proceedings against Mercer Super, accusing it of engaging in greenwashing between November 2021 and March 2023.
It alleged Mercer falsely claimed its "Sustainable Plus" investment options excluded investments in companies involved in the production or sale of alcohol, gambling and fossil fuels.
In reality, six of the seven investment options were connected to those industries.
Mercer admitted the breaches in December 2023, conceding it made false or misleading statements to the public.
The corporate watchdog and Mercer agreed to a $11.3 million fine, which the Federal Court formally confirmed on Friday morning.
Justice Christopher Horan also ordered Mercer to publish a notice on the sustainable investments page of its website detailing its admitted conduct.
The notice must remain on the website for six months, he said.
Mercer accepted the court's decision and acknowledged the need for accurate information around investment options, a spokeswoman told AAP.
"We have co-operated with ASIC and undertaken a comprehensive review of our internal marketing processes and procedures," the company said in a statement.
"These issues were not intentional and we apologise to our members and clients."
Mercer will not use members' funds to pay for the penalty, the spokeswoman said.
In his judgment, Justice Horan said greenwashing had the potential to reduce consumer confidence in environmental, social and corporate governance (ESG).
"(Greenwashing) undermines the efforts of businesses that are pursuing ESG goals accurately and fairly," the judge said.
"It is vital that consumers in the financial services industry can have confidence in ESG claims made by providers of financial products and services."
ASIC deputy chair Sarah Court said it was a "landmark case" for both the watchdog and the financial services industry.
"This was ASIC's first greenwashing case brought before the Federal Court," she said.
"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."
Greenwashing involves making false or misleading statements about the environmental benefits of a product or practice.
