The case was filed in the federal court on Wednesday by Katta O’Donnell, a fifth-year law student at La Trobe University in Melbourne, who owns Australian government bonds.
The suit argues that Australia’s economy will be severely impacted by its government’s response to climate change, and that it has failed to disclose these risks to investors. The court filing claims that, as a promoter of its bonds, the Australian government “owes a duty of utmost candour and honesty” to its investors regarding the material risks posed by climate change.
“The Commonwealth breached its duty as a promoter by ... failing to disclose any information about Australia’s climate change risks,” the filing continues.
The action seeks a declaration from the government that it breached its duty of disclosure and an injunction to prevent the further promotion of the government’s bonds until it complies with this duty.
David Barnden of Equity Generation Lawyers, who is backing O’Donnell’s case, said that he believed it to be the first to deal with climate change as a material risk to the global sovereign bond market.
“Australia is on the frontline of sovereign climate risk,” he said. “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.”
The Australian government is aware of the legal challenge.
“Legal representatives are considering the matter. As it concerns current court proceedings the government will not make any comment,” a spokesperson for the Australian government told Reuters.
