ASIC penalises two super funds for misleading claims

The regulator has fined two super funds for misleading sustainability and investment claims, citing ongoing efforts to curb greenwashing across the sector.

The Australian Securities and Investments Commission (ASIC) has penalised two super funds - HESTA and Prime Super - over alleged misleading statements about their investment commitments and sustainability claims.

H.E.S.T Australia Ltd, the trustee for the $100 billion HESTA super fund, has paid $37,560 to comply with two infringement notices issued by ASIC for misleading advertisements about its carbon reduction commitments.

ASIC alleged that between April 2021 and December 2024, HESTA ran paid advertisements on Google and Bin that claimed the fund was “committed to remove all investment in carbon emissions by 2050”.

The regulator stated that these statements were misleading, as HESTA’s actual target was to achieve net zero carbon emissions across its investment portfolio by 2050, a goal that allows for offsetting rather than complete divestment.

ASIC deputy chair Sarah Court said: “In making the representations, HESTA overstated its commitment to reducing investment in carbon emissions.”

“Consumers relying on HESTA’s representation may have been denied the opportunity to make informed decisions about their preferred superannuation provider when HESTA gave a false impression that its commitment to reducing carbon emissions was more ambitious than it actually was.”

HESTA reported the incident to ASIC and paid the infringement notices on 3 November 2025.

According to ASIC, payment of an infringement notice is not an admission of guilt or liability.

Commenting on the matter, Market Forces head of Australian campaigns, Brett Morgan, said the fund is facing “serious consequences for greenwashing after years of getting away with failing to live up to its claims of climate leadership”.

“Despite these infringements, HESTA continues greenwashing by failing to effectively use its position as a shareholder to demand an end to Santos and Woodside’s dangerous oil and gas expansion plans,” he said.

HESTA, which manages the retirement savings of more than 1.05 million members, has previously faced similar scrutiny. In 2023, ASIC issued three infringement notices to the fund for allegedly misleading statements about the performance of its ‘Balanced Growth’ option.

Meanwhile, Prime Super Pty Ltd has paid $18,780 to comply with an infringement notice issued by ASIC over misleading statements about its tobacco investment exclusions.

The regulator alleged that between October 2023 and June 2025, Prime Super’s 2023 annual report incorrectly claimed that manufacturers of tobacco products were “excluded entirely” from the fund’s investments.

During the same period, the fund held indirect exposures to tobacco companies including Altria Group, British American Tobacco, Imperial Brands, JT International, Philip Morris International and Reynolds American.

Court commented that ASIC’s greenwashing interventions are “founded on enforcing well-established legal obligations that prohibit misleading and deceptive conduct.”

“Fund managers need to make sure that they accurately represent the nature of both their direct and indirect investments to allow consumers to make an informed choice.”

Prime Super reported the incident to ASIC and reportedly no longer claims to fully exclude tobacco manufacturers.

The fund paid the infringement notice on 31 October 2025, with payment not constituting an admission of guilt.

ASIC has continued to clamp down on misleading environmental or ethical claims in the super and funds management sectors, previously issuing infringement notices against Morningstar, Future Super, Diversa Trustees, Northern Trust Asset Management, and Melbourne Securities Limited.

It has also commenced civil penalty proceedings in the Supreme Court of NSW against Fiducian Investment Management Services Limited for alleged greenwashing.

ASIC’s Information Sheet 271 provides guidance for fund trustees and responsible entities on how to avoid greenwashing when promoting sustainability-related or ethical products.