ASIC wins greenwashing case against Vanguard

On March 8th, Vanguard admitted to engaging in conduct that was liable to mislead the public and that it had made representations that were false or misleading.

On March 28th, a federal court judge found that Vanguard contravened the ASIC Act numerous times when it made false or misleading representations about the ESG exclusionary screens applied to its Vanguard Ethically Conscious Global Aggregate Bond Index Fund.

Public misleading statements were made in a product disclosure statement, a media release, on Vanguard’s website, in a Finance News Network interview on YouTube and as part of a presentation at a Finance News Network fund manager event.

The fund used the Bloomberg Barclays MSCI Global Aggregate SRI Exclusions Float Adjusted Index. Vanguard had claimed the index excluded only companies with significant business activities in a range of industries, including those involving fossil fuels, but has admitted that a significant proportion of securities in the index and the fund were from issuers that were not researched or screened against applicable ESG criteria.