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Regulation

Australian Regulator Accuses Mercer Super of Greenwashing

The nation’s Securities and Investments Commission is suing the pension fund for allegedly misleading members about sustainability.

By Michael Katz


In its first legal action against alleged greenwashing, the Australian Securities and Investments Commission accused Mercer Superannuation Limited of misleading its participants about the sustainability of some of its investment options.

The ASIC launched civil penalty proceedings in Australia’s Federal Court and says statements the pension fund made about the sustainable nature and characteristics regarding some of its superannuation investment options were misleading.

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In particular, the regulator alleges Mercer made misleading statements on its website about seven “Sustainable Plus” investment options offered by the Mercer Super Trust. The regulator said Mercer’s statements marketed the options as excluding investments in companies involved in carbon-intensive fossil fuels like thermal coal, and  therefore suitable for members who “are deeply committed to sustainability.” Mercer also allegedly said on its website that the exclusions also applied to companies involved in alcohol production and gambling.

However, the ASIC alleges that the Sustainable Plus investments include investments in companies involved in the fossil-fuel, alcohol-production and gambling industries.

The regulator said 15 companies were involved in the extraction or sale of carbon-intensive fossil fuels, including AGL Energy, BHP Group, Glencore and Whitehaven Coal. Another 15 companies were involved in alcohol production, including Budweiser Brewing Company, Carlsberg, Heineken and Treasury Wine Estates. A further 19 companies were involved in gambling, including Caesar’s Entertainment Inc, Crown Resorts Limited and Tabcorp Holdings.

‘There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” ASIC Deputy Chair Sarah Court said in a release. “If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position. If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld.”

The ASIC said it is seeking declarations and pecuniary penalties, as well as injunctions preventing Mercer from continuing to make any of the allegedly misleading statements on its website. IT also seeks orders requiring Mercer to publicize any contraventions found by the court.

‘This is the first time ASIC has taken an Australian entity to court regarding alleged greenwashing conduct,” Court said in the release. “It reflects our continuing efforts to ensure sustainability-related claims made by financial institutions are accurate.’

A spokesperson for Mercer, the trustee of the Mercer Super Trust, said in an emailed statement that the company has cooperated with ASIC in its investigation and that it “will continue to carefully consider ASIC’s concerns with respect to this matter,” adding that “it would be inappropriate to comment further as the matter is now before the courts.”

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Home > News > Asset Allocation > ‘No Landing’ Economy? Can’t Happen, Says LPL Savant
Asset Allocation

‘No Landing’ Economy? Can’t Happen, Says LPL Savant

It “makes no sense” for things to just dither along with no changes, insist Jeffrey Roach and other Wall Streeters.

By Larry Light



Hard landing or soft landing? That’s been the yin/yang argument in economist circles since early 2022.

A hard-landing scenario, meaning a recession, seemed to be the likeliest outcome back then. Starting late last year, the notion of a soft landing gained ground—that’s when economic growth and inflation slow, but no recession occurs.

But the latest buzz has been about something in between, when no landing occurs. As Torsten Slok, chief U.S. economist at Apollo Management, told Bloomberg, “There are more and more signs of the market pricing the no-landing scenario where the economy remains strong, and inflation remains sticky and persistent.”

Indeed, vibrant hiring, low unemployment, continued strong retail spending and a mid-single-digit Consumer Price Index are trends that don’t appear to be ebbing—and if so, we would get a no-landing result. 

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Now, though, considerable pushback has arisen against this thesis. A no-landing outcome “makes no sense,” wrote Jeffrey Roach, chief economist at LPL Financial, in a commentary. How come?

He used the metaphor of a long-distance foot race, where a runner’s pace varies at different stages of the contest. The athlete’s speed is never constant, the way it would be in no-landing scenario. “Runners transition from the acceleration phase” to a slower one after the field has thinned, he wrote.The head of Yardeni Research contended that current inflation is bound to provoke the Federal Reserve into tightening policy to onerous levels—thus creating a recession.

David Rosenberg, chief of his own eponymous research outfit, tweeted that the no-landing concept is a “hoax” and urged investors to “follow the leading indicators, not the Pied Pipers.”

Roach agrees with the notion that today’s economy might be running too hot, thus inviting harsh tightening beyond what many expect. On the positive side, he thinks that a soft landing is more likely. In his report, he pointed to the one time that the Fed engineered a soft landing, in 1994.

The Fed chair at the time, Alan Greenspan, doubled the benchmark fed funds rate to 6%, which cooled the economy—without a recession. At what Roach believes is the first time the “soft landing term was used,” Greenspan was introduced back then at an appearance before the Economic Club of New York as “the pilot we are all counting on for that very smooth and, we hope, very soft landing.”

That accolade, of course, is one the present chair, Jerome Powell, surely would like to receive.

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