A major Australian superannuation fund, UniSuper, has been accused of greenwashing after it continued to market an investment option as "sustainable" despite quietly reducing its environmental standards by half. This controversy has led to a formal complaint being lodged with the Australian Securities and Investments Commission (Asic), raising concerns about transparency and misleading practices in the financial sector.
Background on the Investment Option
UniSuper, which manages $158 billion on behalf of 670,000 members, promotes its Global Environmental Opportunities (GEO) option as a portfolio "selected on the basis of environmental considerations." Initially, this option required companies to derive at least 40% of their revenue from environmental themes such as alternative energy, energy efficiency, and green building. Additionally, negative screens were applied to exclude investments in fossil fuels or weapons, ensuring a strict adherence to sustainability principles.
Changes to Environmental Criteria
In March 2025, UniSuper significantly altered the GEO option by lowering the revenue threshold from 40% to 20%. This change has allowed the inclusion of several technology companies, including Microsoft and Nvidia, among its top investments. Despite this reduction, the fund has continued to present the option under the heading "sustainable and environmental branded options" on its website, maintaining its original name without clear disclosure of the weakened criteria.
Formal Complaint and Allegations
The Environmental Defenders Office filed a formal complaint with Asic on behalf of UniSuper member John Dixon, accusing the fund of potentially misleading representations. The complaint highlights that the fund retained the sustainable branding and name despite watering down its environmental standards, which could deceive option holders and prospective investors. Dixon expressed shock upon discovering technology companies with significant greenhouse gas emissions in the portfolio, stating, "I thought, this can't be right, someone has made a mistake."
Communication Issues with Members
UniSuper communicated the changes to members via its website and an email, but the email did not provide a summary of the alterations; instead, it directed members to a PDF document for details. Dixon criticized this approach, noting, "Having made the change they really didn't explain it to members. Hardly anybody would have twigged." The complaint letter argues that the lack of clear communication increases the likelihood of members being misled about the fund's environmental focus.
UniSuper's Response and Member Concerns
A spokesperson for UniSuper defended the changes, stating they were made "to expand the investible universe while maintaining the option's environmental theme." However, Dixon, who wrote to UniSuper in August outlining his concerns, found the response unsatisfactory and decided to escalate the matter with a formal complaint. He advocates for the fund to rename the option and be more transparent with members about any modifications to investment criteria.
Regulatory Implications and Future Actions
The complaint urges Asic to investigate UniSuper's conduct, emphasizing that the weakened criteria and inadequate communication could constitute greenwashing. This case underscores broader issues in the superannuation and investment sectors, where environmental claims must align with actual practices to avoid regulatory scrutiny and maintain investor trust. As the debate over sustainable investing intensifies, this incident serves as a cautionary tale for funds seeking to balance growth with genuine environmental commitments.
