Northern Trust Asset Management has paid $29,820 to ASIC over two infringement notices for greenwashing activities, an update from the corporate regulator has said.
The corporate watchdog raised concerns about alleged false and misleading statements regarding the application of a carbon emissions exclusion screen.
ASIC alleged that its passive index tracking fund, the NT World Green Transition Index Fund, claimed to exclude companies that ’derive 5 per cent or more of their total annual revenues (either reported or estimated) from thermal coal-based power generation” and have a score of three or four in the low carbon transition management score quartile. But the principle was not properly applied.
The regulator said Northern Trust has disposed of the holdings and paid the infringement notices on 19 December 2023.
In a response to the ASIC notice, Northern Trust said three holdings were erroneously included within the MSCI Index, and therefore within the fund, and were removed once identified.
The firm noted the three holdings represented less than US$50,000 ($74,000) in the fund which holds 1250 securities with assets under management of US$44 million with the largest holding below 0.05 per cent.
“To mitigate the risk of similar errors occurring in the future, NTAM has implemented enhanced internal controls and oversight of the Index and its constituents,” a spokesperson for Northern Trust said.
The case came after ASIC issued greenwashing infringement notices against Vanguard, Diversa Trustees and Future Super.
This article was edited on 20 December 2023 to inculude the response from Northern Trust.