SYDNEY (AUSTRALIA) – A lawsuit was filed against Australia’s government by 23-year-old student alleging that it has failed to reveal the risks involved regarding climate change to investors in the country’s sovereign bonds.
According to the litigation filed by Kathleen O’Donnell on Wednesday, claims were made that investors who buy Australian government bonds should be well informed about the risks of climate change, which would not make it feasible for Australia to pay back its debt.
A spokeswoman for Australia’s Treasurer told the government knew about the lawsuit. “Legal representatives are considering the matter. As it concerns current court proceedings the government will not make any comment.”
The litigation comes in the wake of a “green” recovery pushed by the novel coronavirus pandemic even as many large investment managers commit themselves to net zero carbon emissions by 2050 across their entire portfolio.
“Australia is materially exposed and susceptible” to climate change risks, said the statement filed with the Federal Court of Australia in Victoria state.
“Accordingly, (a) those risks are material to an investor’s decision to trade in exchange-traded Australian government bonds (e-AGBs) and (b) an investor is entitled to be informed of those risks.”
O’Donnell is looking for a declaration that the government violated its duty of disclosure, thereby limiting further promotion of e-AGBs until it complies.
Climate change-related disclosures have become a common thing globally in the last few years. Stake holders want better disclosures and a transparent outlook on climate risks.
Global financial authorities are also urging banks to bring about transparency with regard to exposure of climate-change risks, asserting more and more that disclosures on climate exposure are of prime importance for market participants, which was an issue referenced in O’Donnell’s litigation.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field.