BlackRock, State Street scramble to manage greenwashing risk

Hannah Wootton and Joanna Mather

Updated Aug 3, 2023 – 6.19pm, first published at 2.27pm

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Key Points

ASIC is suing Vanguard for allegedly misleading investors over green claims.
ASIC has other investigations into alleged greenwashing under way.

Global asset managers including BlackRock and State Street are scrambling to understand whether they could be hit with greenwashing lawsuits after the action brought against Vanguard because they rely on similar global indices to structure ESG investment options.

The Financial Services Council held an urgent phone hookup with members this week to discuss their vulnerability to prosecution for misleading and deceptive conduct, similar to that brought against a Vanguard bond ETF by the Australian Securities and Investments Commission.

correction —

An earlier version of this story said the iShares ESG Screened Global Bond Index fund and iShares Global Aggregate Bond ESG ETF tracked the same index at the centre of legal action against Vanguard. It was updated to reflect that they track different indexes.

Hannah Wootton is a Rear Window columnist, based in Melbourne.

Joanna Mather joined the AFR as an education reporter in 2008. She spent four years in the Canberra press gallery before becoming superannuation reporter in 2016, deputy news director in 2021 and wealth editor in 2023.