The Australian Securities and Investments Commission has secured a AUD 7.3 million penalty against Fiducian Investment Management Services Limited after the Supreme Court of New South Wales found that it breached its duty of care and diligence as a responsible entity and engaged in conduct liable to mislead the public. The findings concerned claims about the ethical and socially responsible objectives of the Diversified Social Aspirations Fund and Fiducian’s representations that it would monitor investments for consistency with those objectives. Between October 2019 and May 2024, the fund invested through underlying funds that held investments in companies deriving revenue from fossil fuels, while its product disclosure statements said it would seek positive social and environmental investments and avoid specified harmful activities. The court found that Fiducian lacked reasonable grounds for its ESG statements and failed to adequately monitor underlying investments, review investment strategies, change investments or align the fund’s stated objectives with its actual holdings. Investor concerns had been raised from at least 2019, but the statements were not appropriately amended or qualified. This is ASIC’s fourth greenwashing civil penalty outcome and its first against a managed fund operator for governance, compliance and oversight failures involving ESG claims. It is also the first such penalty arising from a responsible entity’s failure to discharge its duty of care and diligence.

Original source