State Penrith MP Karen McKeown has resigned from her position at Active Super, after it was found to have contravened the law in connection with various misleading representations concerning its environmental, social and governance (ESG) credentials.
McKeown served as Deputy Chair of Active Super, first appointed in April 2018 and re-appointed in April 2022.
It is understood she received more than $100,000 in Director’s fees last year.
Fellow Labor MP Nathan Hagarty also sits on the Board.
Active Super claimed in its marketing that it eliminated investments that posed too great a risk to the environment and the community, including gambling, coal mining and oil tar sands. Following the invasion of Ukraine, Active Super also made representations that Russian investments were “out”.
However, the Federal Court found that from February 1 2021 to June 30 2023, Active Super invested in various securities that it had claimed were eliminated or restricted by ESG investment screens. These securities were held by Active Super both directly and indirectly (via managed funds or ETFs).
His Honour, Justice O’Callaghan, rejected Active Super’s claims that an ordinary or reasonable consumer would draw a distinction between holding shares in a company and indirect exposures through a pooled fund.
“This is a significant outcome which shows our commitment to taking on misleading marketing and greenwashing claims made by companies in the financial services industry,” said ASIC Deputy Chair Sarah Court.
“ASIC took this case because it sends a strong message to companies making sustainable investment claims that they need to reflect their true position.”
The matter has been listed for a further hearing at which the Court will consider the appropriate form of declaratory relief. The Court will consider the pecuniary penalty to impose for the conduct at a later date.
Apart from confirming she has resigned from her position at Active Super, McKeown has not commented.
Shadow Environment Minister Kellie Sloane said the issue was serious.
“Premier Chris Minns has some serious questions to ask of his MPs who are at the centre of this governance failure,” she said.
“Does he consider the Member for Penrith to be a fit and proper individual to remain a Member of Parliament, after presiding over this clear failure by Active Super?”
Sloane has questioned whether a Member of Parliament can remain in their position when they’ve been a Director of a business found to have broken the law.
Directors of companies are required to be across management and operations of the business in question.
Active Super is a superannuation fund with approximately $13.5 billion in superannuation assets. As of July 1 2023, Active Super has 89,000 members.
Troy Dodds
Troy Dodds is the Weekender's Managing Editor and Breaking News Reporter. He has more than 20 years experience as a journalist, working with some of Australia's leading media organisations. In 2023, he was named Editor of the Year at the Mumbrella Publish Awards.