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On November 1st, 2020, Australian pension fund Retail Employees Superannuation Trust, better known as Rest, settled a lawsuit brought by 25-year-old environmental scientist and fund member Mark McVeigh. The case had been set to begin trial in Sydney on November 2nd.
McVeigh was represented in the case by Australian climate action law firm Equity Generation Lawyers. He filed an initial complaint in 2018 alleging Rest violated Australia’s Corporations Act by failing to adequately disclose to members the risk posed by climate change to the fund’s investments. In an amended complaint filed two months later, McVeigh further alleged the fund trustee violated the Superannuation Industry (Supervision) Act by failing to properly prepare for climate-related risks, including failing to ensure the fund’s internal processes and disclosures complied with Task Force on Climate-related Financial Disclosures recommendations.
A comprehensive chronology of the lawsuit can be found here.
As part of the settlement, Rest will “ensure that investment managers take active steps to consider, measure and manage financial risks posed by climate change and other relevant ESG risks…[and disclose] to members...those risks, as well as the systems, policies and procedures...to address those risks.” The fund will also commit to achieving a net zero carbon footprint by 2050.
Rest’s settlement is the latest victory in the increasingly-popular arena of climate action and accountability lawsuits being launched against governments, energy companies, and financial institutions around the world.
The settlement arrives as, on the other side of the Pacific, the US Department of Labor rushes to implement new rules to discourage private industry pension funds from investing in ESG vehicles. On its face, the move appears to be a Trump administration effort to assist fossil fuel industry allies by hindering funds from investing in ESG investments vehicles which, by virtue of their environmentally-conscious investment principles, often exclude fossil fuel holdings.
Photo: Xinhua/Bai Xuefei via Fortune