Australia: Three wins in a row - Active Super to pay $10.5 million penalty in ASIC’s third greenwashing action

On 18 March 2025, the Federal Court of Australia ordered LGSS Pty Ltd as trustee for Active Super fund (Active Super) to pay a pecuniary penalty of $10.5 million for making false or misleading representations about its green and environmental, social and governance (ESG) credentials.

Significantly, this decision marks ASIC’s third successful greenwashing civil penalty action to date, following the $11.3 million penalty ordered against Mercer Super in August 2024 and the $12.9 million penalty ordered against Vanguard Investment in September 2024.

In this article, we explore how the Court determined the appropriate penalty amount for greenwashing and provide key takeaways for businesses operating in Australia as we see a growing trend in greenwashing enforcement actions.

Background

In August 2023, ASIC commenced civil penalty proceedings in the Federal Court of Australia, alleging that Active Super breached sections 12DB(1)(a) and 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) by making false or misleading representations about its green and ESG credentials.

Active Super denied liability, contending that:

• ·none of the representations ASIC relied on was conveyed; or alternatively
• the representations, if made, were not made “in trade or…