Federal court proceedings against Centre for Australian Ethical Research (CAER) have been discontinued, following the admission that the investment consultant supplied deficient and inaccurate reports about Sandfire Resources.
Last year Sandfire Resources brought legal action against CAER after Australian National University announced it had divested shares from seven companies which were “not socially responsible and doing harm” as a result of company profiles provided by CAER.
CAER has now published a statement which admits it did not maintain regular communication with Sandfire Resources, and failed to show ESG (environmental, social, governance)reports to the miner before supplying them to ANU.
Despite using methodology from parent ESG group EIRIS, which includes contacting companies subject to its research on a “regular basis”, CAER’s only relevant communication with Sandfire before provision of the ANU profile was to email an earlier version of their profile in March 2012.
“Sandfire was not provided with a copy of the CAER research following the July 2014 review and accordingly was not able to assess the material or provide further information for analysis,” CAER said.
“Sandfire was not provided with a copy of the CAER research following the July 2014 review and accordingly was not able to assess the material or provide further information for analysis.
CAER admitted that such a level of communication did not meet the stated standard that research is “shown to companies and supplemented with analysis of any additional information they provide as a result”.
Sandfire managing director Karl Simich said today he was pleased that the shortcomings of the method of preparation of the ESG reports had been publically acknowledged by CAER.
“As I said at the outset, having the public record corrected is an important matter of principle for us,” he said.
“Sandfire respects the right of any organisation to buy and sell shares as it sees fit.
“However, we expect these decisions be informed by up to date and accurate information.
“Sandfire takes its ESG obligations very seriously and will strongly defend its ESG record.”
CAER also admitted to conducting further reviews into Sandfire in July 2014, after which “significant aspects of that review were not included in the profile provided to the ANU”.
Sandfire sought retractions from CAER after the October 3 announcement by ANU, which resulted in CAER removing press releases from their website while insisting that research had been conducted fairly.
Sandfire later commenced Federal court proceedings on the basis of misleading or deceptive representations made by CAER concerning research methodology and processes in preparing company profiles.
A company statement said, “Sandfire is satisfied that the fairness of the Sandfire profile provided by CAER to ANU can now be appropriately assessed in light of the admissions in the statement by CAER today.”
Image: The Australian