SYDNEY (Reuters) – A 23-year-old student filed a lawsuit against the Australian government, alleging that he had not disclosed the risks related to climate change to investors in the country’s sovereign bonds, in the first such action.
FILE PHOTO: A lone tree stands near a water channel in a drought-stricken meadow on the Jimmie and May McKeown property located on the outskirts of the town of Walgett, New South Wales, Australia, 20 of July 2018. REUTERS / David Gray
According to the litigation filed Wednesday, Kathleen O’Donnell claims that investors buying Australian government bonds should be aware of the risks due to climate change that could make it difficult for Australia to repay its debt.
A spokeswoman for the Australian Treasurer told Reuters the government was aware of the demand.
“The legal representatives are considering the matter. As for the current court proceedings, the government will not comment, “said the spokeswoman.
The litigation comes amid a global call for a “green” recovery in the wake of the new coronavirus pandemic, and many large investment managers pledge their commitment to net zero carbon emissions by 2050 across their entire portfolio.
Climate change has long been a hot topic in Australia, and it has been even more so since last summer, when intense forest fires broke out for four months in much of the country, killing 33 people and millions of animals.
“Australia is materially exposed and susceptible” to the risks of climate change, according to the statement filed with the Australian Federal Court in the state of Victoria.
“Accordingly, (a) those risks are important to an investor’s decision to trade in Australian government bonds (e-AGB) and (b) an investor has the right to be informed of those risks.”
O’Donnell is seeking a statement that the government breached its disclosure duty and a court order restricting further promotion of e-AGB until it complies.
Australia has more than A $ 600 billion ($ 428 billion) of sovereign bonds in issue, enjoying a coveted ‘AAA’ rating from the three major rating agencies.
The country contributes only 1.3% of the world’s carbon emissions, but is the second largest emitter per capita behind the United States and is a leading exporter of coal.
Disclosures related to climate change have become more common globally in recent years, and stakeholders expect better disclosures and transparency about climate risks.
Global financial authorities are also pressuring banks to improve transparency in their exposure to the risks of climate change, arguing that disclosures about climate exposure are a prerequisite for market participants, an issue that is being asked. reference in O’Donnell litigation.
“As a developer, the Commonwealth (government) has a duty of the greatest openness and honesty for investors who acquire or intend to acquire e-AGB,” according to the statement filed in court.
“The Commonwealth failed in its duty as a promoter by … not disclosing any information about the risks of climate change in Australia.”
Swati Pandey’s report; Edited by Lincoln Feast, Robert Birsel
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