The Australian Securities & Investments Commission (Asic) has issued three infringement notices to investment manager Vanguard Investments Australia in action against alleged greenwashing.
The Aussie regulator said it was “concerned” that Product Disclosure Statements for the Vanguard International Shares Select Exclusions Index funds may have been “liable to mislead the public by overstating an exclusion”, as it “claimed to prevent investment in companies involved in significant tobacco sales”.
Greenwashing is the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.
The Vanguard funds were “structured to exclude certain investments in tobacco, however, while this screen applied to exclude manufacturers of cigarettes and other tobacco products, it did not exclude companies involved in the sale of tobacco products”, the Australian watchdog said.
Asic deputy chair Sarah Court said: “Greenwashing is not limited to environmental claims but extends to misleading ethical propositions. Entities which seek to promote ethical investing must ensure their statements are accurate and able to be substantiated.
“Investors can feel strongly about not investing in tobacco production, manufacturing and sales, and where tobacco-exclusion investments are promoted, the entity making those claims must be able to substantiate the full exclusion of those investments.”
Vanguard paid A$39,960 (£22,176, $27,041, €25,616) in compliance with the infringement notices on 1 December 2022. Payment of an infringement notice is not an admission of guilt or liability.