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A 23-year-old law student in Melbourne, Australia has filed a lawsuit against the Australian government over failure to disclose the financial risks of climate change to a number of safe investments, including government bonds. Katta O’Donnell says she hopes that the case, which is a world’s-first, will change the way the government recognises and responds to the climate emergency.
In a claim filed in the federal court on July 21, O’Donnell, a fifth-year law student at La Trobe University, said the government was breaching a legal duty and misleading investors by not being transparent about the climate financial risks they face. O’Donnell is backed by David Barnden of Equity Generation Lawyers.
“I’m suing the Government because I’m 23 [and] I think I need to be aware of the risks to my money and to the whole of society and the Australian economy,” O’Donnell told ABC News.
“I think the Government needs to stop keeping us in the dark so we can be aware of the risks that we’re all faced with.”
This marks the first time a national government has been sued over its failure to warn investors over the impact that climate change will have on the value of investments, including government bonds, widely considered to be the safest form of investment. Most Australians have invested in government bonds through compulsory superannuation, a national organisational pension program.
Fossil fuel investments, for instance, are likely to lose value and potentially become a stranded cost as the world seeks to slash greenhouse gas emissions and move towards cleaner and more crisis-resilient renewable sources.
I think the Government needs to stop keeping us in the dark so we can be aware of the risks that we’re all faced with.Katta O’Donnell
The case is a class action, meaning O’Donnell will be representing all investors and potential investors in government bonds traded on the Australian Securities Exchange. Instead of seeking damages, the case hopes to achieve a declaration that the government and related officials have breached their duty, and an injunction to end the promotion of government bonds until climate risk disclosure information is updated.
“Australia is on the frontline of sovereign climate risk,” Barnden told the Guardian. “We confront the harrowing physical impacts of drought and bushfires and we also face the financial risks of an economy over-exposed to fossil fuels being left behind as the world shifts to clean energy.”
Despite the Australian government not having disclosed climate risks to its own investment products, it has introduced regulations for companies to do so. O’Donnell and Barnden believe that this duty needs to be extended to the government.
We confront the harrowing physical impacts of drought and bushfires and we also face the financial risks of an economy over-exposed to fossil fuels being left behind as the world shifts to clean energy.David Barnden, Equity Generation Lawyers
Scientists have warned repeatedly that catastrophic climate disasters lie on our current rate of greenhouse gas emissions. Many lives are already affected by the impacts of climate change, especially in the Asia and the Pacific, notably last year with raging wildfires devastating much of Australia.
The severity of our planetary crisis has even prompted the World Economic Forum (WEF) to announce for the first time in history that all top five financial risks are environmental, from more frequent extreme weather events to mass biodiversity loss and resource depletion.
Lead image courtesy of Molly Townsend.