Industry superannuation fund, Rest has agreed to settle litigation brought by its member, Mark McVeigh, creating a climate risk fiduciary precedent.
In 2017, McVeigh filed legal action against the fund for breaching fiduciary duties by failing to adequately handle climate change risk.
Today, Rest issued a statement that said it would take further steps to ensure its investment managers took active steps to consider, measure, and manage financial risks posed by climate change and other relevant environmental, social, and governance (ESG) risks.
It noted that it would use “a variety of mechanisms” to access and, if necessary, take steps to improve the compliance of its investment managers.
Rest said climate change was a “material, direct, and current financial risk” to super funds across risk categories such as investment, market, reputational, strategic, governance, and third-party risks.
Rest said it considered that it was important to actively identify and manage these issues, and continue to develop systems, policies and processes to ensure that the financial risks or climate change were:
“Rest’s policy requires that the management of climate change risks also involves the disclosure to members of those risks, as well as the systems, policies and procedures maintained by the trustee to address those risks,” it said.
“Rest agrees with Mr McVeigh to continue to develop its management processes for dealing with the financial risks of climate change on behalf of its members.”
The statement said that McVeigh acknowledged and supported Rest’s initiatives to:
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