Climate lawyer who sued super fund sets sights on federal government over bond risks
The lawyer who sued $57 billion super fund Rest over its approach to climate change now has the Australian government in his sights, with proceedings in a world-first lawsuit over Commonwealth bonds set to begin next week.
Equity Generation Lawyers principal David Barnden acted on behalf of 25-year-old Rest member Mark McVeigh who sued the super fund for retail workers in a landmark case that was settled this week. The settlement included a commitment from Rest to publish all portfolio holdings and align its investments with a ‘net zero’ emissions target by 2050.
The climate specialist firm is now suing the federal government over its alleged failure to appropriately disclose climate risk in the bonds it issues on behalf of university student and investor Katta O’Donnell.
Mr Barnden said the Rest outcome “certainly could” put pressure on the government to settle the case but his firm was “prepared for anything”.
“We’re in it to win,” he said. “It’s not difficult to imagine that the more debt Australia has, the more sensitive bondholders may become to risks such as climate change.”
As part of the settlement with Rest, the fund made a public statement on climate risk that Mr Barnden described as a victory for his client, 25-year-old Rest member Mark McVeigh.
“Climate change is a material, direct and current financial risk to the superannuation fund across many risk categories, including investment, market, reputational, strategic, governance and third-party risks,” the super fund said.
“The settlement outcome and what Rest has committed to is a wonderful outcome for our client,” Mr Barnden said. “One would think that the threat of legal action should spur funds to do better.”
A string of major Australian financial institutions have recently racheted up their commitments to “transitioning” the economy from a reliance on carbon emitting industries to a greener future. Major industry super funds, including healthcare fund Hesta and AwareSuper, have committed to net zero targets and reduced exposure to fossil fuels.
“You have the prudential and company regulator telling the entities which they oversee to actively consider and disclose climate change risks.
“You have the RBA talking about the structural risks to the Australian economy and the impact on major financial institutions.
“These are not activists,” he said.
Australasian Centre for Corporate Responsibility executive director Brynn O’Brien said the world had changed since the Rest case was launched two years ago.
“The financial sector is now committing to actions we could only dream of in terms of public policy in Australia, it is that far ahead of government.”
Ms O’Brien said the case had been closely watched not only by other financial institutions, but by those who would hold them to account.
“I believe that other institutions are now likely to see what Rest has agreed to do as something like a minimum standard,” she said. “It will have a normative and persuasive effect on the Australian market.”
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Source: Thanks smh.com