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Pension fund agrees settlement in landmark Australian climate change case, McVeigh v Rest

Pension fund agrees settlement in landmark Australian climate change case, McVeigh v Rest

Overview

The Australian superannuation fund Rest has agreed a settlement in a landmark case, acknowledging that "climate change could lead to catastrophic economic and social consequences and is an important concern of Rest's members", and that it is "important to actively identify and manage" that risk.

The case was brought two years ago by a member, beneficiary and contributor to the superannuation fund, Mark McVeigh, who claimed that Rest was in breach of its fiduciary duties due to its management of climate change risks and the disclosure of those risks.  It was one of the first cases of its kind, and was watched globally as the outcome could have a far reaching impact for other pension funds. 

Rest also agreed to implement a number of climate-change initiatives, including a long-term objective to hit net-zero carbon footprint by 2050, to require its investment managers take active steps to consider climate change, to measure and manage financial risks posed by climate change and other ESG-related risks and to improve its climate change and ESG-related disclosures.

Although the case never made it to Court (settling just days before a hearing) the settlement, which clearly favours the Claimant McVeigh, is likely to act as a precedent globally, and highlights the potential liability, and adverse publicity, which might be faced by pensions and other investment funds if they do not adequately address the risks posed by climate change to their investments. 

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