LGSS Pty Ltd

ADVERSE PUBLICITY NOTICE

The Federal Court of Australia has ordered LGSS Pty Ltd ACN 078 003 497 (LGSS) as trustee for Local Government Super (otherwise known as the Active Super fund) to publish this notice.

Following action by the Australian Securities and Investments Commission (ASIC), on 18 March 2025 the Federal Court ordered LGSS to pay a pecuniary penalty of $10.5 million for contravening Australia's financial services laws.

On 5 June 2024, the Court found that LGSS had engaged in greenwashing by making false and misleading representations to members and potential members of the Active Super fund about its "green" or "ESG" credentials. The representations were made in:

the Active Super fund's website (the Website);
an email sent to 45,621 members of Active Super, that was also published on the Website;
the Impact Report for 2021/22;
PDS Fact Sheets issued in 2021;
PDS Fact Sheets issued in 2022;
the Responsible Investment Report for 2021/22;
the Sustainable and Responsible Investment Policy which was available in three separate versions during the period 10 August 2022 to May 2023; and
an interview with the CEO of Active Super in Investment Magazine.

In these publications, LGSS represented that it had eliminated investments in gambling, coal mining, oil tar sands and - following the invasion of Ukraine - Russia.

These representations were false or misleading and liable to mislead the public in circumstances where, at the time of publishing them, the Active Super fund held investments in companies such as:

SkyCity Entertainment Group Ltd and Pointsbet Holdings Ltd (Gambling);
Whitehaven Coal Ltd and Coronado Global Resources Inc (Coal mining);
ConocoPhillips and Shell Plc (Oil tar sands); and
Gazprom PJSC and Sberbank of Russia (Russian entities).

A full list of the relevant investments is set out in Annexure B to the orders made by the Federal Court on 20 June 2024. A link to those orders is below.

The penalty will be paid from insurance proceeds, however the receipt of those insurance funds will create a capital gains tax liability which may need to be met from members' funds. LGSS will be in contact with members to update them on this issue.

Further Information

LGSS's misconduct contravened the following financial services laws:

section 12DB(1)(a) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and
section 12DF(1) of the ASIC Act.

For further information about LGSS's misconduct, see:

the Federal Court's judgments against LGSS on liability and penalty:
ASIC's media releases:
- 24-121MR Court finds Active Super made misleading ESG claims in a greenwashing action brought by ASIC | ASIC;
- 25-042MR Active Super ordered to pay $10.5 million penalty in ASIC's third greenwashing court action | ASIC.