ESG Enforcement Tracker

In October 2025, ASIC commenced civil penalty proceedings against FIMS, the responsible entity of the Diversified Social Aspirations Fund, alleging that the company had made misleading statements regarding the fund’s ESG characteristics and had failed to discharge its duty to act with care and diligence as a responsible entity.

FIMS provides fund management and investment services. Between 2 November 2015 and 30 May 2024, FIMS operated, and was responsible for, the Diversified Social Aspirations Fund (the DSA Fund). The DSA Fund was created in response to their clients’ increased interest in ethical investing, with environmental, social and governance (ESG) objectives.

The DSA Fund’s Product Disclosure Statement (PDS) stated that the Fund would invest in companies “that aim to be positive for society and for the environment and aim to avoid investments in harmful activities”. The PDS also identified specific categories of industries or activities that the DSA Fund would avoid, and that FIMS would monitor the portfolio for this purpose.

In August 2026, the Supreme Court of New South Wales approved an agreed resolution reached between ASIC and FIMS. The company admitted contraventions of section 12DF of the ASIC Act and section 601FC(1)(b) of the Corporations Act. The admissions followed the filing of a Statement of Agreed Facts and Admissions setting out the relevant conduct and circumstances.

The Court held that FIMS did not have reasonable grounds on which to make the ESG claims in the PDS and identified governance and oversight failures. The court noted that there were instances where: the PDS Checklist had not been completed; where Board approval was not obtained in accordance with the PDS process; and that FIMS did not review underlying shareholdings of investments made, against the ethical objectives of the ESG statements. As such the Court found that FIMS engaged in conduct liable to mislead the public.

The Court found that FIMS had also breached its duty of care as a responsible entity of the DSA Fund. FIMS should have acted in accordance with the principles under the Corporations Act to act with the degree of care and diligence that a reasonable person would exercise if they were a responsible entity in FIMS’s position; for example, understanding the risk that the underlying securities and shareholdings were not aligned with the ethical objectives, reviewing those, recognising that the underlying investments of the DSA Fund did not align with the PDS, and causing the DSA PDS either to be amended or for the underlying investments to be changed.

In deciding the level of penalty, the court considered factors including: the extent and circumstances of FIMS’ contraventions, the nature and extent of any loss or damage suffered as a result, whether the contravention was deliberate, the duration of the conduct, the seniority of the involved employees, FIMS’s compliance systems, FIMS’s size and financial position, and investigatory cooperation. The judgment concluded the proceedings and confirmed the penalty previously announced by the parties.

This is the fourth greenwashing penalty secured by ASIC, and the first case against an operator of a managed fund for ESG related claims.