A 23-year-old law student has filed a federal lawsuit against the Australian government on Wednesday alleging that it failed to disclose climate change-related risks to investors of government bonds. According to her lawyers, it is “the first legal action that seeks to hold the Australian Government to account over climate change risks.”
Kathleen (Katta) O’Donnell, a fifth-year law student at La Trobe University, brought the action in the Federal Court of Australia. She alleges that “Australia’s economy and the nation’s reputation in international financial markets will be significantly affected by the adequacy of the government’s response to climate change.”
A press release from Equity Generation Lawyers, the Melbourne-based climate change group representing O’Donnell, says she represents the “countless” holders and investors in “Exchange-traded Australian Government Bonds (eAGBs)” who, together, “have loaned the Australian government over A$700 billion.” The claim alleges that the government failed to provide an “information statement” to investors regarding its depository interests, and that “by failing to disclose climate change risks to investors, the Commonwealth of Australia… breached its duty of disclosure and misled and decieved investors.”
O’Donnell asserts that the Australian government owes a duty “to disclose information about its climate change risks that can influence the investor’s decision to acquire eAGBs” in a six-page notice. Among the ways in which climate change can be harmful to Australia’s fiscal position, the document lists gross domestic product, fiscal policy, foreign exchange rates, inflation, taxation revenue, terms of trade, international relations, and bond yields. The suit also refers to Australia’s commitment to the 2016 Paris Agreement and the legal challenges and economic changes that will undoubtedly occur in pursuit of that obligation. Additionally, it alleges that Australia’s response to climate change will impact how the country “is viewed by central banks, pension funds, investors, credit rating agencies, and others.”
O’Donnell seeks a declaration from the government stating that it breached its duty to inform investors of climate change risks, as well as an injunction “restraining the Commonwealth from further promoting eAGBs until it complies with its duty of disclosure.”
In recent years Australian and global climate change activists have been increasingly alarmed by climate-induced changes to Australia’s Great Barrier Reef and a surge in climate change-related bushfires, the latest round of which killed an estimated 1 billion animals and directly and indirectly took the lives of almost 500 people before they burned out in March 2020.