Vanguard Australia has been fined almost A$40,000 for alleged greenwashing in a global shares fund popular on this side of the Tasman too.
The Australian Securities and Investments Commission (ASIC) pulled up Vanguard for potentially misleading investors on the tobacco content in its International Shares Select Exclusions Index fund series.
Vanguard markets three versions of the screened global equities fund including a NZ dollar-hedged option with the product used by wholesale investors and also available on retail platforms such as InvestNow.
According to the ASIC statement release late last Friday, the Vanguard funds are “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 release says anti-greenwashing is “a current ASIC priority”.
ASIC deputy chair, Sarah Court, said in the statement: “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.”
It is not clear whether the Financial Markets Authority (FMA) will follow up with regulatory action against the Vanguard fund under the ‘fair dealing’ provisions of the NZ legislation.
“We’re aware of ASIC’s recent enforcement actions and don’t have any further comment at this stage,” a FMA spokesperson said.