In a world first, 23-year-old Mark McVeigh has filed a legal action alleging the trustee of his retirement fund, the Retail Employees Superannuation Trust (REST), breached the fiduciary duties owed to him by failing to adequately consider climate change risks. Climate risks are biting now, and his investment horizon is stretched. The claim does not allege financial loss. McVeigh seeks declarations from the court to establish the trustee breached its duty. He also seeks injunctions to prevent future misconduct.
The unique case has global ramifications. With almost $40 billion under management, REST is one of Australia’s largest asset owners. It is in the top 150 pension funds in the world.
A judgment will make law on how a major asset owner should address climate change risks when managing other people’s money. McVeigh’s lawyers filed the case in the Federal Court of Australia in September this year.
It builds on a landmark 2017 public opinion by Noel Hutley SC, one of Australia’s most respected commercial barristers and president of the Australian Bar Association, and James Mack. They advised that trustees and trustee directors must do three things in the face of climate change:
- inform themselves about the physical and transition impacts of climate change;
- consider how those factors will impact the performance of the fund;
- act with care, skill and diligence to address the risks.