Last week, the Federal Court issued a landmark $10.5 million penalty to Active Super for misleading claims related to its environmental, social, and governance (ESG) policies. The case, brought by the Australian Securities and Investments Commission (ASIC), is one of the most high-profile greenwashing rulings in Australia to date—and it’s a serious warning shot to organisations and boards nationwide.
As reported in the Australian Financial Review:
“The court found Active Super engaged in conduct that was liable to mislead the public, including members of its super fund, over its ESG claims… This is a reminder that statements about sustainability must be backed by genuine action.” — AFR, April 2025
And here’s the truth: there is a lot of greenwashing happening in the market, whether knowingly or through ignorance. But the regulatory net is tightening, and organisations that think they can “talk the ESG talk” without walking it will increasingly face scrutiny—either from regulators, investors, financial institutions, or the public.
ESG Can’t Just Live on the Website
In today’s environment, ESG is no longer just a marketing angle. It impacts funding, partnerships, supply chain access, and investor confidence. And increasingly, these stakeholders are digging deeper. If your ESG claims don’t match your operations, your culture, and your governance practices, you’re at risk—legally, financially, and reputationally.
I’ve seen it firsthand: organisations struggle to secure bank loans or JV partnerships because their ESG frameworks lack substance. Fancy graphics and glossy PDFs aren’t enough anymore. What’s needed is embedded, enterprise-wide ESG strategy—anchored in governance and aligned with your values and operations.
“ASIC will continue to take enforcement action where we see misleading sustainability claims… We expect transparency and evidence to back up ESG statements.” — ASIC Chair Joe Longo, as reported by ABC News, April 2025
Boardroom Blind Spots: A Leadership Responsibility
In my view, many boards still underestimate the complexity and importance of ESG. Some directors assume it’s “being handled by management” or delegate it to one function like marketing or compliance. That’s no longer acceptable.
If I were advising a board today, here’s what I’d recommend:
Appoint an ESG-literate director or specialist advisor to the board.
Establish an ESG Committee, or at the very least, integrate ESG risk and opportunity reporting into regular board agendas.
Ensure ESG accountability across key executive functions—not just the sustainability team.
Assess the board’s current ESG capability and literacy—if there’s a gap, fill it through education, recruitment, or advisory input.
Boards must take ownership of ESG—not just as a risk—but as a strategic opportunity to lead, differentiate, and future-proof the business.
Getting ESG Right Is Good Business
Contrary to some views, ESG done well isn’t a compliance burden—it’s a business advantage.
It helps attract long-term investors. It aligns with emerging global reporting frameworks. It improves employee engagement and strengthens brand reputation. It can even unlock innovation and operational efficiencies.
But only if it’s real.
“Organisations that embed ESG into their strategy and culture stand to build stronger trust, brand equity, and resilience in the face of change.” — Governance Institute of Australia, ESG Reporting Guide
Final Thoughts: Time to Get Serious
The Active Super ruling is not just about one fund—it’s a broader signal. Boards that continue to treat ESG as a tick-the-box exercise are sleepwalking into risk. And those that ignore the deeper governance responsibility here are increasingly vulnerable to fines, investor revolt, or public backlash.
ESG must become a strategic boardroom priority. It requires capability, clarity, and consistency—and it starts with leadership that’s willing to move beyond rhetoric and into genuine, organisation-wide action.
Now is the time to ask:
Do we really understand our ESG posture?
Can we back up what we’re saying publicly?
And does our board have the right skills to govern this well?
If not, it’s time to act.