Vanguard Investment Australia is sued for “greenwashing” by Australian authority

The local subsidiary of the American investment giant Vanguard was sued on Tuesday by the Australian Corporate Regulator for allegedly “greenwashing.”

In relation to specific environmental, social, and governance criteria used to determine investments in its fund, the Australian Securities and Investments Commission (ASIC) accused the corporation of misleading behavior. The corporate regulator has been ratcheting up action against Australian companies it alleges made inflated promises about environmentally beneficial investments and products. Such conduct is called “greenwashing.”

“We consider that the screening and research undertaken on behalf of Vanguard was far more limited than that being promised to investors, and we consider that this constitutes another example of greenwashing,” the ASIC said in a statement. Vanguard Investments Australia stated to Reuters that it immediately self-reported the problem to the regulator after realizing the disclosure flaw.

The corporation maintained, “There was never any desire to deceive, but Vanguard acknowledges it has fallen short of the high standards it holds itself accountable to. ASIC is asking the court to issue declarations and impose financial penalties.