Retirement
Rest commits to net-zero emissions following landmark case
Rest has committed to net-zero emissions following litigation brought on by a member who claimed it breached its fiduciary duty by failing to consider climate risk.
Rest commits to net-zero emissions following landmark case
Rest has committed to net-zero emissions following litigation brought on by a member who claimed it breached its fiduciary duty by failing to consider climate risk.
Mark McVeigh, 25, has successfully sued the $57 billion fund over its handling of climate action, forcing it to commit to net-zero emissions by 2050.
“Rest will take further steps to ensure that investment managers take active steps to consider, measure and manage financial risks posed by climate change and other relevant ESG risks,” Rest said in a statement.
In 2018, Mr McVeigh sued his superannuation fund in the Federal Court, alleging that Rest had breached the Superannuation Industry Act and the Corporations Act by failing to manage those risks – which could include fossil fuel companies plummeting in value or infrastructure being damaged by extreme weather.
The law requires trustees of super funds to act with care, skill and diligence to act in the best interests of members – including managing material risks to its investment portfolio.
The case was expected to set a precedent for how super funds – which are uniquely exposed to the impacts of climate change due to their long-term investment horizons and large investments in infrastructure and unlisted assets – would handle climate risk.
“Consistent with the Task Force on Climate-related Financial Disclosures, Rest acknowledges that climate change could lead to catastrophic economic and social consequences and is an important concern of Rest’s members,” Rest said.
“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’s statement also noted that “climate change is a material, direct and current financial risk to the superannuation fund”.
Rest went further and agreed to manage its investments so they are responsible for net-zero greenhouse gas emissions by 2050.
It also agreed to immediately begin testing its investment strategies against various climate change scenarios, publicly disclose all its holdings, and advocate for companies it invests in to comply with the goals of the Paris Agreement, which aims to stop global warming at 1.5 Celsius.
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