(Bloomberg) — New Zealand’s Markets Authority has formally warned the Australian operation of Vanguard Group Inc. for missing the deadline to disclose greenwashing fines by two months.
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US wealth manager Vanguard was fined in Australia late last year for including companies involved in tobacco sales in funds that claimed to ban such investments. Because the same products were also offered to New Zealand investors, the company had to officially notify the country’s financial markets regulator within five working days, according to a regulator statement on Wednesday.
Instead, it took Vanguard 55 business days to submit the correct documents and following intervention by the FMA, the regulator said, adding that Vanguard had failed to meet its regulatory obligations or have adequate processes in place.
“Vanguard Australia regrets our error in not complying with our reporting obligations to the Financial Markets Authority,” a Melbourne-based spokesman for Vanguard said in an emailed statement. “We take this matter seriously – we are addressing it by investing in education, enhanced resources and expert support for international regulatory affairs.”
Regulators around the world are cracking down on claims related to investments sold under environmental, social and governance criteria. The Australian Securities & Investment Commission has so far imposed fines totaling A$140,000 ($94,000) related to greenwashing, including the Vanguard breach, and recently filed its first such lawsuit against pension fund Mercer Superannuation.
Wary investors await Australia’s first greenwashing court battle
“The FMA believes that a warning will reaffirm to foreign issuers offering investment products in New Zealand under the Trans-Tasman Mutual Recognition regime that they must ensure they comply with the New Zealand regime as well as the regime in their local jurisdiction ‘ the FMA said in the statement.
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