The case against REST super to set a climate risk precedent
In a world first, 23-year-old Mark McVeigh, represented by Environmental Justice Australia, 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.
McVeigh is unable to access his superannuation until 2055. 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 $50 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.
In addition to reviewing the fund’s investment strategy through a climate lens, McVeigh alleges REST’s trustee should have performed additional acts.
The first is to comply with Task Force on Climate-related Financial Disclosures (TCFD) recommendations on disclosure and risk assessment. Notably, the TCFD wants funds to stress-test investment portfolios based on a world that limits warming to well below 2°C, in line with the Paris Agreement.
The second is to seek information from investment managers about investments’ exposure to climate risks and how those risks are being managed.
Read more about the claim in key decisions and documents:
- Mark McVeigh v Retail Employees Superannuation Pty Limited  FCA 14 (17 January 2019)
- Amended Concise Statement (21 September 2018)
- Concise Statement (23 July 2018)