Climate Lawsuit: Ecologist Sues Own Retirement Fund

Guest essay by Eric Worrall

An University of New South Wales associate professor of law ecologist is suing his own retirement fund, over a claim the fund managers are failing to address climate risk.

Climate change: Could your super fund be liable?

Twitter Facebook LinkedIn12 FEB 2020
DAWN LO, BEN KNIGHT 

Is the next shake-up to Australia’s superannuation industry just around the corner?

Can you sue your super fund for financial loss incurred as a result of climate change? This controversial question will be addressed in a landmark court case in July this year and will place Australia’s estimated $3-trillion super industry under the microscope.

Has your super fund failed to protect your retirement savings from climate change risks?

The case in question centres around a 24-year-old ecologist who has taken his trustee to court, claiming the financial loss associated with climate change was not factored into his retirement investment. The outcome of the case could set a precedent for whether super funds must take climate change risks into account.

UNSW Law’s Associate Professor Scott Donald, Director of The Centre for Law, Markets and Regulations (CLMR) – a joint initiative of the Faculty of Law and UNSW Business School – says the risk of climate change cannot be avoided and is already impacting investment returns.

“Climate risk is here – it is affecting the valuation of assets and also the investment opportunity set now. Sticking one’s head in the proverbial sand is not a viable investment option.”

Associate Professor Donald says the legal responsibility of super funds could extend to protecting against the risks imposed by climate change.

“The law is clear – super fund trustees have an explicit duty to pursue the best financial interests of members. So, to the extent that climate change poses financial risks, the duty is already there. The problem is one of priority. Unfortunately, not all trustees see action on climate risk as a priority, at least not for their fund.”

Read more: https://newsroom.unsw.edu.au/news/business-law/climate-change-could-your-super-fund-be-liable

Surely the obvious answer is, if you are not happy with the risk management policies of your current pension fund, shop around for a new fund, or start your own; Under Australian law running your own own “self managed fund” is an entirely viable proposition.

There are funds which invest in fashionable green business ventures, though green investments have their own risks. The 2011 collapse of Solyndra obliterated at least $187 million of Tranche “E” investment fund assets, including money from Richard Branson’s Virgin Green Fund, which eventually shut down in 2014.

Spain’s abrupt cancellation of billions of dollars worth of renewable subsidies in 2012 reminded green fund managers who invest in businesses which depend on government subsidies, that governments can arbitrarily rip up renewable subsidy agreements without notice or compensation.

What about investing in China? China dominates manufacturing of solar panels and wind turbine components, so surely there should be plenty of opportunities to invest in profitable green Chinese manufacturing enterprises?

Not so fast. Communist China’s sovereign risk profile has just taken a major dive. Two key Chinese manufacturing cities in the last few days passed laws allowing city authorities to arbitrarily seize private assets, to help combat the Corona Virus.

The one thing fund managers truly fear is the possibility a corrupt government might seize their fund’s assets. Given China’s horrendous levels of corruption, it is likely only a matter of time before a corrupt Communist official uses those new seizure laws to enrich themselves at the expense of Western fund managers and investors. Expropriated owners are supposed to receive fair compensation, but the level of compensation will be determined by the officials exercising the new seizure laws.

Even if the Corona virus is rapidly defeated, and we all hope for the best, this new power to arbitrarily seize assets will be a reminder to green investors and others that property rights are subject to the whim of government officials in Communist China.

Correction (EW): Commiebob points out I misread the article. The plaintiff is ecologist Mark McVeigh, not a UNSW law professor.

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lee
February 12, 2020 6:05 pm

How much climate risk can be evaluated? What percentage risk should be factored in?

Bryan A
Reply to  lee
February 12, 2020 7:23 pm

And how much Climate Regulation Risk must also be both considered and factored for

Reply to  lee
February 12, 2020 8:10 pm

It is patently impossible to show the damages from climate change (manmade global warming, specifically). The fun will be what tripe they produce to try to show damages. As we are not warming NOTHING can be due to warming. What fun.

Sweet Old Bob
February 12, 2020 6:08 pm

Must be something in the water there ….
😉

MarkW
February 12, 2020 6:10 pm

“property rights are subject to the whim of government officials in Communist China.”

Property rights aren’t fully protected in the West either. Just ask someone who has had all use of their land eliminated because an allegedly endangered critter was found to make it their home.

MarkW
Reply to  Eric Worrall
February 13, 2020 7:34 am

The courts have ruled that regulations limiting the use of your land don’t qualify as a “taking”. So as long as they let you keep title to your land, the fact that you are no longer permitted to actually do anything with your land is not something you can complain about.

Sheri
Reply to  MarkW
February 13, 2020 4:26 am

MarkW: Or hundreds of 400 ft spinning towers of death built in the areas all around your no-longer recreational cabin…..

niceguy
Reply to  MarkW
February 13, 2020 5:43 pm

One of the most pathetic moment in the Macron-Le Pen debate (where Macron crushed Le Pen according to the unanimous consensus of those who either didn’t watched it, or don’t understand French, or are paid to fake these conditions) was when Macron replied “in France private property is protected”.

A lie so obvious that not even anti Le Pen activists should have nodded. Yet they nodded.

Now it’s a “fact” that Le Pen was ridiculed during that debate. Yet no enemy of Le Pen was ever able to tell me a moment where they found her ridiculous in her position or analysis, or something clearly wrong that she uttered (she said incorrect stuff, but her enemies don’t remember, or probably couldn’t tell).

4 Eyes
February 12, 2020 6:16 pm

The real risk is the confusion over whether anthropogenic climate change does amount to risk over and above natural risk. No-one knows what governments or other big players are going to do. If they were convinced they would have made clear decisions but they all know that CAGW has not been proved beyond doubt, neither the C nor the A

ozspeaksup
Reply to  4 Eyes
February 13, 2020 5:40 am

well while morons like junior keep protesting(the latest is to stop a natgas plant in WA for being too co2 emitting) then the hedge funds super funds etc will loose money if theyve invested
making them leave anything that fools like this cancel culture twit screams about is going to lose money and make other investments harder or riskier to find.

MarkW
Reply to  4 Eyes
February 13, 2020 7:35 am

The only risk that comes with “climate change” is the risk of new government taxes and regulations.

Mike Smith
February 12, 2020 6:25 pm

Why not sue over actual risks (that receive very little attention relative to climate change)? e.g.
* Asteroid impacts
* Carrington events
* Geologic events
* Volcanic events
* Pandemics
* Nuclear detonations (intentional or not)

Warren
February 12, 2020 6:29 pm

Q. How is the 24-year-old ecologist funding the litigation?
A. He’s underwritten by the socialist green-billionaire backed ‘Friends of the Earth’.
And now they’re after the ANZ Bank in AU: https://www.foe.org.au/bushfire_survivors_launch_claim_against_anz
“The complaint draws inspiration from a​ ​successful complaint​ brought by Friends of the Earth Netherlands, Oxfam and Greenpeace against ING bank before the Dutch NCP under the same rules as will be applied to the ANZ’s behaviour. As a result of the complaint, ING committed to measuring and disclosing its indirect carbon emissions, and to begin steering its lending portfolio towards meeting the Paris Agreement’s ‘well-below’ 2 degrees goal. During mediation, ING also committed to reduce its thermal coal exposure to close to zero by 2025 and refrain from financing new coal fired power plants. Friends of the Earth Australia believe the Dutch case will set a strong precedent for a similar outcome against ANZ here in Australia.”

LdB
Reply to  Warren
February 13, 2020 2:33 am

All this junk is going nowhere in Australia these sorts of lawsuits have been run and the legal landscape is settled in Australia. Australia doesn’t have a bill rights unlike USA and Dutch and you can’t get legal standing. The Dutch case is meaningless but if idiots want to part with there money go right ahead.

commieBob
February 12, 2020 6:32 pm

The person doing the suing is MARK MCVEIGH.

The press release is poorly written, as usual. Scot Donald is an expert quoted in the story not the plaintiff.

February 12, 2020 6:48 pm

So Associate Professor Donald wants to add to the overheads of his superannuation fund by suing it, and then waste more resources providing assurances that climate change is covered? Duh. Lawyers are supposed to be able to think straight. Perhaps that is why he is teaching the subject, not practicing it?
If the Oz tertiary education super fund is the same as other similar funds, then there are investment choices that can be specified by the customer. I instructed my super provider NOT to invest in any greenie-type investments, or investments that are pegged on continued guzzling of renewable energy subsidies. The advice from the agent was that I have my super under a “conservative” option, which I interpret as a confirmation of my wishes. I draw $12,000 from that per annum (the minimum) and the base amount continues to go up rather than down.

February 12, 2020 6:50 pm

This petulant UNSW Associate Professor Scott Donald could easily set up his own Self-Managed Superannuation Fund and invest his money in all the Green Energy Schemes that his heart desires. This would save him fees and allow him to put his money exactly where he wanted. Instead, he calls his legal team and gets a complaint before the Courts. Under Australian law running your own own Self-Managed Superannuation Fund is a profitable and viable move.
Our Professor might, however, discover over the years that a good way to waste your hard-earned money is to invest in untested Green Schemes.

Komrade Kuma
February 12, 2020 6:52 pm

It seems to me, given the lack of success in say the US regarding similarly rationalised lawsuits and given the plaintiff is a professor of law, that this is fundamentally a coat trailing exercise by a lawyer on the make either for himself professionally, for his department (i.e. by adding new ‘specialty law’ aspects to their curriculum and research ambitions) or just his own dingbat narcissism. Who is to know?

BTW our High Court ( same status as the US Supreme Court) has just determined that anyone with ‘indigenous heritage’ even if born overseas and with foreign citizenship, once they are here cannot be sent back overseas due to criminal behaviour ruining their legal ‘character’ in terms of their residency here (as applies to someone of any other race in the same circumstances). Admittedly the decision was 4-3, the narrowest margin, but there you go,, that’s some legal minds for you.

Now ‘indigenous’ Australians are quite distinctive in their appearance but what is really weird is that the guy favoured by the decision was one of two and who looked far and away ‘white’ rather than ‘indigenous’ (I would not have picked him as anything as anglo-celtic-european). The other guy whose case is still under consideration by their ‘honours’ looks indigenous yet he is having to clear some hurdles still. This sort of nonsense is like Elizabeth Warren being legally indgenous because some indigenour community leader vouches for her and she ‘identifies’ as such. No room for a nice little earner in that possibility is there? /sarc. I mean a whole new industry is there for the plucking.

Now I recall why I am such a cynic. The common law does not necessarily require common sense just common as much idiocy.

Komrade Kuma
Reply to  Komrade Kuma
February 12, 2020 6:54 pm

erratum
Last sentence should end “…just common as muck idiocy.”

Komrade Kuma
Reply to  Komrade Kuma
February 12, 2020 9:10 pm

erratum/update

Missed erratum about status of the plaintiff being a lawyer. That said, the lack of common sense in some lawyers is only amplified in the world of ecologists. Apparently humans are the lowest form of life on the planet going by much of their ravings and are personally responsible for everything. In eco world ‘original sin’ occurrs on ground hog day.

ozspeaksup
Reply to  Komrade Kuma
February 13, 2020 5:49 am

heard that and was damned angry
not born here , dont give a stuff what half a part or less aboriginal he is hes got no bloody rights here
were getting road signs around saying” this is 4%^^%$ land”
NO it is NOT
it WAS maybe a couple hundred yrs ago
but its owned taxed and held by the present day owners NOT the wanna be claiming anything and none to be found here anyway aborigines of the area.

Id love to go to England/Scotland/Ireland and try n claim landrights or anything else by saying I have an ancestral belonging and rights to claim ownership of ?? place my 5xgreat grandies came from
bet Id be booted out bloody fast!

Neil Jordan
February 12, 2020 6:53 pm

The activist and his attorney might not have thought this completely through. What if climate change results in a net benefit for the investments? Does the activist need to reimburse society?

David Chappell
Reply to  Neil Jordan
February 13, 2020 4:01 am

I suspect the attorney has thought it through very carefully – from his point of view. Whatever happens, he gets paid.

n.n
February 12, 2020 6:58 pm

How dare you! I want my green[backs] laundered and renewable. What do you mean Green is a deficit, a blight upon the ecosystem?

Clarky of Oz
February 12, 2020 7:11 pm

Strewth
I had better sue myself. I run my own super fund which has some shares in the dreaded FFs.
All I need is two eco lawyers to work probono. One for me one for the fund
What can possibly go wrong?

LdB
Reply to  Clarky of Oz
February 13, 2020 3:40 am

I think with a lot of this stuff it’s just eco groups trying to make a news headline, I am pretty sure any legal advice tells them that they are on a hiding to nothing.

Ketil M
February 12, 2020 7:23 pm

The World Bank estimate that there are $100 Trillion held in pension funds. Someone wants to use that for Climate investment. He might not be happy when his super is wasted on useless climate investment.
https://www.atlanticcouncil.org/blogs/energysource/the-climate-finance-partnership-mobilizing-institutional-capital-to-address-the-climate-opportunity/

BoyfromTottenham
Reply to  Ketil M
February 12, 2020 8:46 pm

Ketil – why do you think us poor super fund members will get a say in this? It looks like we will be the losers either way. IMO this Ass Prof (well, that’s my abbreviation) is just a useful idiot of Friends of the Earth, who are a useful idiot of some larger organisation that doesn’t want us to know who they are and what their global game plan is. Maybe 4 more years of DJT will help us.

Sommer
Reply to  Ketil M
February 13, 2020 7:01 am

Do Canadians realize the risk of CPPIB investing 6 billion dollars in large scale renewables?

https://business.financialpost.com/news/fp-street/cppib-makes-significant-step-into-renewable-energy-with-pattern-purchase

ray boorman
February 12, 2020 8:08 pm

And when the climate scam is finally acknowledged by all to have been a fraud, will the same fellow be suing his super fund for the losses which will result if his current law suit is successful?

ozspeaksup
Reply to  ray boorman
February 13, 2020 5:51 am

bet on it
hes a young entitled git.

brent
February 12, 2020 8:22 pm

Pensions schemes failing on climate change investment policies
Regulator urged to investigate whether trustees are complying with new guidelines
Snip
“I have left trustees in no doubt about their responsibilities and legal obligations to protect people’s pension pots from climate change risks,” said Mr Opperman.
https://www.ft.com/content/29582442-482a-11ea-aeb3-955839e06441

Trying to force pension managers to divest CO2 intensive companies and create artificial demand for new “green investment vehicles”??

Mr.
February 12, 2020 8:57 pm

Maybe this bloke should be suing his parents for not providing him with a risk-free passage throughout life.

Firey
February 12, 2020 9:09 pm

What is the risk in investing your pension fund in “green” industries only to find the underlying science it itself questionable. The Hockey Stick study is an example.

LdB
Reply to  Firey
February 13, 2020 3:42 am

There are plenty of solar and wind farms that have collapsed investing in green industries is not exactly a safe strategy either.

TimTheToolMan
February 12, 2020 10:21 pm

“Climate risk is here – it is affecting the valuation of assets and also the investment opportunity set now.”

Sure, seaside properties are diving in value aren’t they. Sarcasm aside, investment is much more complicated than this guy likely understands. Investors hedge against investments losing value if they believe that’s going to happen and under no circumstances would an investment stand untouched for anything like the 30 years that climate impacts could be felt.

A bigger risk to Super Funds would seem to be excessive costs associated with frivolous lawsuits.

Russell
February 12, 2020 11:15 pm

These clowns only get this opportunity because the “political” and “social” science is settled. That is, knowing about knowledge processes and the grubby power of group-think.
Can I sue my super fund for investing in green projects (and boycotting fossil fuel ones) when the “real” science (geology, physics, etc) tells us that they are not maximizing benefits to their members with such poor investment strategy?

ozspeaksup
Reply to  Russell
February 13, 2020 5:53 am

I rang up my moving to Green..power supply co and told em I was leaving because I resented paying more for less
and was moving to a coal/gas ONLY powerco
I truly enjoyed doing that;-)

Scwatllan
February 12, 2020 11:40 pm

This guy is truly ‘super illiterate’. OT, I hear Downer are getting out of solar power. Anybody hear that too?

Rod Evans
February 13, 2020 12:04 am

The Ass Prof Mark McVeigh, is a classic example of the snowflake generation. He is 24 years old, clearly spent his time thus far on Earth, in school followed by academia and now shows us the failures our current education systems produce.
If he doesn’t like the product he is invested in, then there are plenty of other investment options to choose from.
His desire to turn to the endless, slow grinding process of law, is a common feature of the alarmists. Chief alarmist, Michael E Mann, has set an example with his cases taking years to resolve, simply because of the opportunity to drag these things out. People are now losing their cases not because they are wrong, but because they have run out of money to go on fighting for justice! The only winners in these cases are the lawyers and the judiciary in general. They have built up a massive industry, just listening to nonsense for the most part. The judges love their role as Mr/Mrs big, which has now taken them to the level of holding the very government and its laws they are there to administer hostage. The personal and preferred political position of the judge is becoming a feature of modern law. The effect of which was evidenced in the UK last Autumn with parliamentary anarchy the result. Thank god for democracy and sense of the voters who sorted things out.
We can not go on like this. The world has bigger real problems to solve. The snowflakes have got to be told, stop being time wasting idiots, life is not perfect but it is far better than the other options. Now get on with it.

StephenP
February 13, 2020 12:27 am

If the pension funds divest their investments in fossil fuels it will be interesting to see who picks up the shares.

George Lawson
February 13, 2020 1:15 am

Absent minded professors never did have much intelligence.

Stevek
February 13, 2020 2:12 am

Investing in any fund has inherent risk. Some funds are riskier than others. He assumed the risk when signing the documents and investing his money. He could have chose less risky investments like short term AAA rated bonds.

Ed Zuiderwijk
February 13, 2020 2:39 am

As there is no such thing as man-made climate change the ‘climate change risk’ (from natural change) still is what it always was and has already been taken into account. That should be the case for the defense.

The news about new misappropriation ‘laws’ in China should make any investor make a run for the exit. China is going to do an Argentina big time and its economy will go down the plughole.

yarpos
February 13, 2020 3:43 am

Thats funny. I did the reverse. I fund my Super Fund (I guess Americans would call them 401k managers) was remixing what its investment options meant and that some of my choices were now funding “renewables” I immediately moved my money away to areas focussed on returns , rather than feels.

Sheri
Reply to  yarpos
February 13, 2020 4:28 am

Excellent.

Tom Abbott
February 13, 2020 5:06 am

From the article: “Can you sue your super fund for financial loss incurred as a result of [Human-caused] climate change?”

Well, first you would have to prove that human-caused climate change exists. Noone in the last 40 years has been able to prove that but you go right ahead and try it.

You should be happy I’m not the judge that hears your case because evidence of human-caused climate change would be the first thing I would require in order for your case to go forward.

AGW is Not Science
Reply to  Tom Abbott
February 13, 2020 5:41 am

Agreed. The problem, of course, is judges who will accept AGW as factual without evidence – THAT is the danger, and that is the precise reason these SOTE green pressure groups keep trying – so they can get “legal decisions” in their favor to leverage more useless lawsuits.

Tom Abbott
Reply to  AGW is Not Science
February 13, 2020 10:26 am

“The problem, of course, is judges who will accept AGW as factual without evidence – THAT is the danger”

You’re right. That’s a problem with lots of groups: politicians, scientists, uninformed citizens. Much too trusting of authority.

Annie
February 13, 2020 6:07 am

I’m a member of the Unisuper Fund that he is suing. This very well managed fund offers a large number of alternative (sub) funds to its members including several sustainable funds which have no fossil fuel investments, and which right now are outperforming the default fund (not because they are sustainable but because these particular options are run by very knowledgeable Unisuper in-house managers). So there is absolutely no need for him to set up a self managed fund. He would be hard pressed to argue that Unisuper does not already offer him the option of managing any climate risks, as he sees them, within the fund.

DaveS
February 13, 2020 10:10 am

He’s 24? One day he’ll grow up.

Barbara
February 13, 2020 10:49 am

This clown is proof that “too stupid to live” really should be a valid diagnosis.

Alan Watt, Climate Denialist Level 7
February 13, 2020 12:34 pm

Hmm. A number of US democrat politicians are proposing “net worth” taxes, presumably including retirement assets. Can I sue my retirement fund because they aren’t taking action to protect me from those risks?

Quilter52
February 13, 2020 8:58 pm

This idiot is also ignoring that the Australian market is at almost record levels at least before the coronavirus scare has hit. He could of course set up his own self managed super fund, something the judge should point out before any decision that destroys the value of everyone else in that fund’s savings. This lawfare nonsense has got to stop. Perhaps we in Oz should link the judges pension plan to what ever decision they make thereby ensuring that they will at least have thought seriously about their decision.

old construction worker
February 14, 2020 8:17 am

“…new seizure laws to….” Oh, how true. It’s one of the reasons the progressives socialist love the China’s model of governing. Their “Tax on Assets” paid for with after taxed money will never fly. Amendment XVI; the Federal Government can only “tax” income. States may get away with more “property taxes”. So the question how could the Feds increase revenue? They go after plans like 401Ks and IRAs type programs. Then they phase it in like they did with income tax. “Only the 1% will pay income tax”. How long did that last?

Solomon Green
February 15, 2020 5:24 am

“The law is clear – super fund trustees have an explicit duty to pursue the best financial interests of members.”

That actually applies to all trustees to just those of superfunds.

“So, to the extent that climate change poses financial risks, the duty is already there. The problem is one of priority.”

But pity the poor trustees who switch out of solid, long-term investments because they might not perform well should climate actually warm significantly, as all the so-far failed models suggest, only to find that temperatures do not follow the trajectory forecast by the modellers.

A real catch 22 situation.

Johann Wundersamer
February 25, 2020 1:01 pm

Most states shy away from expropriation.

It has been shown that compensated people still process, for generations.

Thei’ll find lawyers with experience in such processes, thei’ll find lenders, because processes for generations paralyze the bureaucracy and thus cause high additional costs:

Expropriation is not the state’s “what ever you want” program.

Johann Wundersamer
February 25, 2020 1:22 pm

Most states shy away from expropriation.

It has been shown that compensated people still process, for generations.

Thei’ll find lawyers with experience in such processes, thei’ll find lenders, because processes for generations paralyze the bureaucracy and thus cause high additional costs:

Expropriation ain’t the state’s “will have” programs.

Something like that spans generations and leads to murder and manslaughter:

https://www.google.com/search?q=right-of-way&oq=right-of-way&aqs=chrome.

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