In some absolutely huge news for young Aussies, a 25-year old has just won a historic lawsuit against Rest super for their handling of climate change.
It’s the first time an Australian super fund has been sued for their climate policy, according to the ABC. Rest have now been forced to commit net-zero emissions by 2050. YES.
Mark McVeigh, 25, sued Rest in 2018, because he alleged that they had breached the Superannuation Industry Act and the Corporations Act by not making climate change investment risks.
If you’re super is being invested in fossil fuel companies, then there is a real risk to your investment because of climate change. That’s why it’s super important (pardon the pun) that superannuation companies prepare for the two types of climate risks: transition risk and physical risk.
Millennial makes history after successfully suing super fund for not doing enough on climate change. This is the news I needed today https://t.co/uH5Nl7RzgA— Prof Felice Jacka (@FeliceJacka) November 2, 2020
What a champion! "This marks the first time a major Australian superfund has agreed to settle litigation about the material financial risk of climate change and what needs to be done to protect members. Managing climate risk cannot be delegated away." https://t.co/PJwT3bMwF5— Ariadne Starling (@AriadneStarling) November 2, 2020
According to The New Daily, transition risk is: “the risks associated with moving to a low-carbon economy…It might include carbon pricing, changes in the energy market, and regulations to mitigate climate change.”
Physical risk is related to “how climate change itself will affect actual assets,” like flooding of properties.
The case was settled out of court, which means that the outcome doesn’t carry the same weight as a legal precedent. But it’s still a landmark case and sets an example for the rest of the world, that we need to take climate change seriously.
“This outcome should represent a significant shift in the market’s willingness to tackle climate risk — a shift which should set a clear precedent for the industry in Australia, and also pension funds around the world,” McVeigh’s lawyer, David Barnden said.
Rest have now agreed to manage its investments better and have net-zero greenhouse gas emissions by 2050. They’ve also agreed to immediately start testing investment strategies, against different climate change scenarios.
“The superannuation industry is a cornerstone of the Australian economy — an economy that is exposed to the financial, physical and transition impacts associated with climate change,” Rest said in a statement.
It’s great news for young Aussies, who will be the ones most affected by this landmark decision.
Hopefully, other big Aussie super funds will now follow suit.