A 24-year-old Australian pension fund member is suing his pension for allegedly violating the country’s Corporations Act by failing to provide information related to business risks associated with climate change, as well as any plans to address those risks.
Mark McVeigh filed a lawsuit in the Federal Court of Australia against the A$57 billion ($38.9 billion) Retail Employees Superannuation Trust (REST), to which he has contributed 9.5% of his salary since 2013. Under the Corporations Act 2001, super fund beneficiaries are entitled to request information they need so they can make informed decisions about the management and financial condition of the fund.
“Climate change, the physical impacts, and the transition impacts, individually or in any combination, have posed, and will increasingly continue to pose, material or major risks to the financial position of many of REST’s investments,” said the lawsuit. “Trustee directors knew, or ought to have known, that REST’s climate change business risks were likely to have a material or major impact on the financial condition of [the fund].”
According to court documents, McVeigh requested information from REST concerning its business risks regarding the potential financial impact on its investments of these changes. In particular, he wanted to know what REST knew of its climate change business risks, and what actions it was taking in response to those business risks, among other requests.
However, he said the fund failed to provide the information he was seeking, and therefore violated the Corporations Act. It was then that he turned to Australian specialist climate change law firm Equity Generation Lawyers.
“I see climate change as a huge risk that dwarfs a lot of other things,” McVeigh said in an interview with Bloomberg. “It’s such a big physical impact on the planet, and the economy.”
REST has a climate change position statement that states that it factors in climate change risks into its investment strategy, and decision-making, including asset allocation and strategy reviews, and in its selection and review of investment managers.
“Climate change will impact the global economy in the short, medium and long term,” REST says in its climate change position statement. “The ongoing transition to a lower-carbon economy drives us to continually manage risks to deliver strong investment performance over time.”
The relief sought by McVeigh includes an injunction to force REST to give him the information he had requested in full, and a declaration that REST violated the Corporations Act by not providing the information he requested.