By Zoe Bush
In yet another example of groundbreaking Australian climate change litigation, Mark McVeigh recently settled his case against REST Super. Following the settlement, REST acknowledged that climate change “is a material, direct and current financial risk to the superannuation fund” and committed to a net zero carbon footprint by 2050.
In the world’s first climate case against a superannuation fund, Mr McVeigh, represented by Equity Generation Lawyers, sued REST in 2018, alleging it had contravened its duties under the Superannuation Industry (Supervision) Act 1993 (Cth) by failing to disclose and manage its climate change business risks.
Because the case was settled, it does not provide a clear legal ruling that clarifies superannuation funds’ duties regarding their climate change business risks. The result nonetheless has important implications for superannuation funds, their trustees, and directors. It reflects a growing consensus in the legal and business community that superannuation funds should be identifying, disclosing and managing their climate change business risks, and that those who fail to do so risk falling short of their legal obligations. In order to minimise this risk, superannuation funds should be considering climate risks in their decision making in a way that is more than ‘cursory acknowledgement and disclosure’, disclosing climate risks in accordance with the Task Force on Climate-Related Financial Disclosures, and managing climate risks through robust governance frameworks.
The EDO is excited to be contributing to this growing area of law with the corporate and commercial law work of its new Safe Climate Team. In particular, the EDO is focusing on how fossil fuel companies and other corporations are managing their climate change business risks, and monitoring the accuracy of companies’ claims regarding climate change to address potential climate “green-washing”.
If you have concerns about how companies or super funds are managing their climate risks, or how they are marketing themselves in this regard, you can request free initial legal advice from the EDO through by emailing us at [email protected].