Greenwashing – ASIC’s successful prosecution of Vanguard Investments

If a business wishes to promote its goods or services by reference to good environmental, social or governance practice, it must ensure that its promotional statements are accurate and will not mislead consumers

ASIC has succeeded in its Federal Court Greenwashing action against Vanguard Investments.1

There is a significant perceived commercial advantage in advertising products that meet ESG (Environmental, Social and Governance) principles. But – as is the case with any advertising activity – advertisers need to ensure their material is not misleading.

In advertising one of its investment funds, Vanguard made false and misleading statements that:

  • the Fund offered an ethically conscious investment opportunity; and
  • Fund investments were screened against certain ESG criteria. The ESG criteria related to fossil fuels, alcohol, tobacco, gambling, military weapons, civilian firearms, nuclear power and adult entertainment.

Those statements were not altogether accurate. Vanguard relied on a particular third-party index to screen Fund investments against the ESG criteria. However, Vanguard admitted there were a significant proportion of securities in the index that were from issuers that were not researched or screened against applicable ESG criteria- 46% of the securities held by the Fund were not subject to ESG screening.


Vanguard admitted to most of ASIC’s claims and the Court declared that Vanguard’s advertising was: in breach of the Australian Securities and Investments Commission Act 2001 (Cth); and made representations  that were false or misleading.


With respect to the nature of misleading conduct, Judge O’Bryan observed:

  • conduct is likely to mislead if there is a real or not remote possibility of it doing so;
  • it is not necessary to prove that the defendant intended to mislead;
  • it is not necessary to prove that the conduct actually mislead someone. The question whether conduct is misleading is objective and for the Court to decide;
  • conduct will not mislead if it merely causes confusion.

Half-truths may be misleading, however, it is necessary to establish that the ordinary or reasonable consumer is likely to be led into error by the relevant statement.

ASIC media release

In its associated media release2, ASIC Deputy Chair Sarah Court said:

In this case, Vanguard promised its investors and potential investors that the product would be screened to exclude bond issuers with significant business activities in certain industries, including fossil fuels, when this was not always the case.

As ASIC’s first greenwashing court outcome, the case shows our commitment to taking on misleading marketing and greenwashing claims made by companies in the financial services industry. It sends a strong message to companies making sustainable investment claims that they need to reflect the true position.

Marketing staff need to be trained on these principles

Marketing staff should be trained to ensure they understand the risks of, and potential penalties for, making misleading and deceptive claims. GRC Solutions offers Competition and Consumer Law eLearning for Australia with specific versions for FMCG and Universities. The New Zealand courses cover Commercial Practices, Consumer Guarantees, and Fair Trading.


1. Australian Securities and Investments Commission v. Vanguard Investments Australia Ltd [2024] FCA 308

2. See ASIC media release 24-061MR

For further information on relevant ACCC guidelines, see


GRC Solutions Resources