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| Mark McVeigh wants his super fund to disclose how it's managing the risks of climate change. (ABC News: Michael Slezak) |
Key points
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That's because 23-year-old Mark McVeigh is suing a $50 billion super fund — and if he wins, the industry will likely never be the same.
Experts say the case could force super funds to do more to protect people's savings from the impacts of climate change.
And since super funds own about a quarter of the Australian stock exchange, that could change the way business is done across the country.
Mr McVeigh graduated with an ecology degree from the University of Queensland earlier this year. He's unlikely to get hold of his super until at least 2055.
But by that time, if carbon pollution continues on its current path, the world is likely to have warmed by more than 2 degrees Celsius, according to the Intergovernmental Panel on Climate Change (IPCC).
Global warming of this nature represents a risk to many businesses, and anyone who invests in them.
An increase in natural disasters alone, ignoring impacts on things like water resources and the direct effects of heat, will cost Australia an extra $20 billion every year by 2050, according to Deloitte Access Economics.
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| Mr McVeigh says the heart of his legal action is about making super funds transparent. (ABC News: Michael Slezak) |
'There's risks to investing in companies that aren't sustainable'Super funds are legally required to pass on information that members need to make decisions about their investments.
But nobody has ever tested whether strategies to deal with climate-related risks is information covered by that section.
Your super in 2055
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He couldn't find any information about how his super fund, REST, was managing those risks. So in August last year, he wrote to the fund and asked.
"They haven't given any real information and they haven't supplied any real strategy or plan that they have for climate change and the risks involved," he said.And that, according to lawyers at Environment Justice Australia (EJA), is grounds to sue.
"Mark has asked for information that he reasonably needs to make an informed decision about the management of the fund and that's what the law requires REST to give him," said EJA lawyer David Barnden, who is representing Mr McVeigh.
Mr McVeigh is suing REST for failing to provide that information, and asking the Federal Court to force the fund to release it.
It's the first time a superannuation fund has been sued for not doing enough on climate change.
"It's important for younger people to know that their money is going to be protected and people investing their money are going to do it in a way which isn't going to damage the environment, as well as their financial returns," Mr Barnden said.
"This is certainly not an environmental issue. REST invests in long-term assets such as infrastructure and this can be impacted by climate change and sea level rise.
"This is about protecting people's money and it's about what the world will look like when people can access their superannuation in 30, 40 years' time."
Court cases like this have been expected
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| Mr McVeigh recently graduated with an ecology degree from the University of Queensland. (ABC News: Michael Slezak) |
In 2016, Noel Hutley SC, currently president of the Australian Bar Association, said financial risks caused by climate change would be considered by courts to be foreseeable — meaning company directors couldn't claim that they were unexpected.
Mr Hutley wrote it was "likely to be only a matter of time before we see litigation against a director who has failed to perceive, disclose or take steps in relation to a foreseeable climate-related risk that can be demonstrated to have caused harm to a company".
climate risks not just foreseeable, but also "material and actionable now".
This year APRA went further and revealed it was working with other regulators, including ASIC, to examine what the industry was doing to respond to climate-related financial risks, and warned that regulatory action would be considered.
Former ASIC lawyer Mark Bland, who now advises super funds, said Mr McVeigh's case could force the industry to be more open about how it managed climate risk, and that could have a big impact on investments.
"Really we've got the case of sunlight being the best disinfectant," he said.
"The impact for investment returns … is enormous and so I think this is really going to force directors, to the extent they haven't already, consider what the trustee needs to do to respond to climate change risk."
In a statement to the ABC, REST said it considered "environmental, social and governance (ESG) risks in order to deliver competitive long-term investment returns for our members".
"We require our investment managers to consider a range of factors, including ESG risks, when selecting investments in their portfolios and when exercising voting rights," the statement said.Mr McVeigh said this sort of statement wasn't adequate for him to make informed decisions about his retirement savings.
"They haven't really released any information on strategies or plans to do with climate change risk and that's basically where I started," he said.
Links
- ‘Climate Kids’ Suit Against Government Allowed To Proceed
- Climate Campaigners Lose High Court Battle Over Carbon Target
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- The Netherlands Contemplates The World’s Toughest Climate Law
- Rhode Island Sues Oil Companies Over Climate Change, First State To Do So
- A Landmark Climate Change Ruling Could Go Up In Smoke After Justice Kennedy Retires
- Judge Tosses City Climate Change Lawsuits Against Big Oil
- Here’s Why The Bay Area Lost Its Lawsuit Against Big Oil
- Federal Judge Dismisses Cities’ Suit Against Oil Companies Over Costs Of Climate Change Climate change litigation rising with the seas as victims revert to 'Plan B'
- 'Afraid to have children': Climate scientists reveal their fears for the future
- What convinced these once-sceptical scientists that climate change is real?
- The challenges of understanding impact of climate change in Antarctica
- Modelling predicts dire consequences for all wetlands within 80 years
- Heat waves getting hotter across Australia
- Humans driving climate change 170 times faster than natural forces
- Scientists frustrated as extreme weather becomes the new norm
- Impact of climate change on Indigenous communities
- Summer heat broke 205 records
- Climate change's 'canaries in the coal mine'
- Ski season 'could shrink'
- Climate change 'threatens financial system'
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