The Australian Government, together with its two government officials, is facing a lawsuit for failing to disclose the risk climate change poses to Australians' super and other safe investments on Wednesday in the Federal Court, the first in the world.
The Australian government was accused in a lawsuit yesterday of misleading people who bought public bonds by failing to reveal the nation's risks to climate change. https://t.co/EXqfwPzW0f— E&E News (@EENewsUpdates) July 23, 2020
The case is a class-action suit filed and will be represented by the 23-year-old Melbourne law student Katta O'Donnell. The bushfires that hit Australia made O'Donnell worry about the effect of it on the value of her bonds and the risks it will bring to the whole of society and the Australian economy.
O'Donnell's will be representing all investors and potential investors in government bonds tradeable on the Australian Securities Exchange against the Commonwealth, the secretary to the Department of Treasury, and the chief executive of the Australian Office of Financial Management. The case does not seek damages but it aims for the government and those two officials to take responsibility for breaching their duty to the public. It includes a judicial order that forces the government to stop promoting bonds until it is transparent enough to disclose information that includes updates about Australia's climate change risks. David Barnden from Equity Generation Lawyers and O'Donnell's legal counsel points out that the duty to be transparent must be extended to the government the same way they are forcing companies to disclose on their shareholders the impact of climate change.
Many climate cases coming before courts in Australia, but this one, according to the University of Melbourne Professor Jaqueline Peel is very significant because it ties climate change to real-world financial risk. It could force the government to take more action on climate change and a new wave of climate litigation may spur around the world by showing private-sector cases had the potential to be brought against governments. For her, this has the potential to be big news around the world.
Former NAB chief economist Rob Henderson said he was surprised a case like this had not been brought before. He added that Australians needed to consider the impact of climate change on the Australian government bonds because comparing to other counties it significantly more exposed to climate change.
APRA, the Australian financial industry regulator, is working with corporate regulator ASIC and the Reserve Bank of Australia to ensure public companies are examining climate risk, disclosing it to investors, and acting on it.