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ARTICLE · 04 JUNE 2024

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Successful prosecution of "ethical" fund for greenwashing

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The corporation misled investors when it claimed that the fund invested in environmentally and socially beneficial projects.

AustraliaEnvironment
Mark Shumsky
Mark Shumsky
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The Federal Court has ruled a major fund management corporation misled investors about its $1 billion ethical fund, which the company claimed was screened to ensure investments went into environmentally and socially beneficial projects.

Fund manager accused of misleading investors over ethical fund

It was the first major victory for the Australian Securities & Investments Commission against so-called greenwashing by companies which exaggerate their environmental credentials or falsely claim they are investing in environmentally beneficial programs.

Greenwashing involves misleading the public by presenting an organisation's policies, products and actions as more environmentally friendly than they really are. Misleading the public is an offence that can lead to very large fines. (Please see How to avoid greenwashing when offering or promoting sustainability-related products, ASIC, June 2022.)

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