ASIC takes action against greenwashing!
8 August 2023
Share

ASIC has commenced civil proceedings in the Federal Court against Vanguard Investments Australia for alleged greenwashing.

Vanguard’s ‘Ethically Conscious Global Aggregate Bond Index Fund’ has allegedly been found to have issued close to 30 bonds directly exposing investors to investments linked with the fossil fuel industry, including those undertaking activities connected with oil and gas exploration, despite the Fund advertising that was screened against appropriate ESG criteria.

Moreover, further investments held by the Fund were based on a Bloomberg index which ASIC alleged has not conducted appropriate ESG research over a significant proportion of their bond issuers leading to approximately 180 issued bonds to fall in breach of ESG criteria.

ASIC Deputy Chair Sarah Court commented: “We know that investors are increasingly seeking investment options that exclude certain industries, and investors need to be able to rely on investment screens to help them make these choices.

“In this case, Vanguard promised its investors… that the product would be screened to exclude bond issuers with significant business activities in certain industries, including fossil fuels.”

She further explains: “[ASIC] consider that the screening and research undertaken on behalf of Vanguard was far more limited than that being promised to investors, and we consider this constitutes another example of greenwashing.’

As at 26 February 2021, the total FUM of the Vanguard Ethically Conscious Global Aggregate Bond Index Fund was over $1billion. 

It’s crucial for companies to uphold their environmental claims and ensure transparency.

More Insights
Choosing the Right Structure for Your VC Fund: MIS vs. ESVCLP/VCLP 🚀
Overview of the Early-Stage Venture Capital Limited Partnerships (ESVCLP) Program in Australia 
AML/CTF Reforms: New Obligations for Financial Services
BNPL Providers: New Regulatory Reforms are here!
Stay informed
Subscribe to our insights and updates
Sydney
Melbourne
Brisbane
Sydney
Melbourne
Brisbane

Insights