McVeigh v. Retail Employees Superannuation Trust

Investor Activism: 23-Year-Old Takes on a Superannuation Fund

23-year-old Mark McVeigh sued his superannuation fund, REST, alleging it breached its disclosure obligations and fiduciary duties related to the climate-related financial risks of its investments. After the first day of the three-day trial, the parties settled the case, and REST publicly agreed to a range of new climate-friendly investment commitments. Although the case settled out of court, it was a ground-breaking case, testing the climate-related financial risk and fiduciary duties of retail pension funds in Australia for the first time.  


The Retail Employees Superannuation Trust (REST) is a large Australian industry superannuation fund that manages AUD$60 billion of assets for its 1.7 million members. It invests significantly in the coal, gas, and oil sectors in Australia.

In 2018, then 23-year-old ecological landscaper Mark McVeigh sued REST in relation to its obligations on the financial risks emanating from climate change.

Starting in August 2017, Mark McVeigh, who had been contributing to his superannuation fund with REST since 2013, wrote to REST requesting information about its approach to the risks climate change posed to his investments. He asked how the fund understood the risks it faced from climate change, how it was responding to those risks, and what steps REST had taken to require its investment managers to provide information about climate risks.

However, after a year of back-and-forth with REST, Mr. McVeigh was left dissatisfied with the information provided by REST and its approach to managing the financial risks associated with climate change. And so, in July 2018, Mr. McVeigh filed a case against REST’s corporate trustees in the Federal Court of Australia, seeking declarations that the trustees had breached their obligations to him and injunctions to stop them from breaching those obligations.

Mr. McVeigh’s Arguments

Mr. McVeigh initially pleaded that REST breached its obligations under the Corporations Act 2001 to provide him with the requested information on the fund’s assessment and climate-related financial risks. He argued that REST’s failure to provide this information impaired his ability to make an informed decision about the management and financial conditions of the fund.

He amended his complaint in September 2018, further claiming that REST breached its duties as a trustee and under Australia’s Superannuation Industry (Supervision) Act by failing to act in the best interests of members and by failing to exercise the skill, care, and due diligence as a prudent superannuation trustee would when investing members’ money. He argued that REST should have:

  • required its investment managers to provide information about risks posed by climate change to investments for consideration by the board or the investment committee, and
  • ensured its internal processes and public disclosures complied with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

This was the first Australian case to challenge the disclosure obligations and conduct of superannuation trustees as they relate to managing climate change risk.

REST’s Response

In its defense, although REST admitted that climate change will cause “foreseeable, and in some contexts, material” impacts, it was just “one of many material factors” that Australian investors might consider. It denied that climate change was likely to have a material impact on the financial condition of the fund. It also argued that Mr. McVeigh’s claim was flawed as he had “not identified any investment of REST [upon which climate change] … will pose a material or major risk to its financial position.”

Court Decision

In January 2019, Justice Nye Perram of the Federal Court of Australia made a decision on a maximum costs order application. A maximum costs order is an exception to the normal rule that the unsuccessful party bears the legal costs of the successful party, limiting the liability of the unsuccessful party at the end of proceedings where the proceeding is in the public interest.

Justice Perram found that the case was certainly in the public interest, noting that:

The case appears to raise a socially significant issue about the role of superannuation trusts and trustees in the current public controversy about climate change. It is legitimate to describe the Applicant’s litigation as being of a public interest nature.


Justice Perram ultimately held that the court needed further information about Mr. McVeigh’s ability to proceed if his application was denied, and the parties later resolved the issue among themselves.


On November 2, 2020, at the end of the first day of the three-day trial, the parties settled the case. REST agreed to comply with Mr McVeigh’s requests through a set of 9 commitments:

  1. Implement a long-term objective to achieve a net zero carbon footprint for the fund by 2050 (thereby, aligning its portfolio with the Paris Agreement targets).
  2. Measure, monitor, and report outcomes on its climate-related progress and actions in line with the recommendations of the TCFD.
  3. Encourage its investee companies to disclose in line with the TCFD recommendations.
  4. Publicly disclose the fund’s portfolio holdings.
  5. Enhance its consideration of climate change risks when setting its investment strategy and asset allocation positions, including by undertaking scenario analysis in respect of at least two climate change scenarios (including one scenario consistent with a lower-carbon economy well below 2˚C this century).
  6. Actively consider all climate change-related shareholder resolutions of investee companies and otherwise continue to engage with investee companies and industry associations to promote business plans and government policies that contribute to and reflect the climate goals of the Paris Agreement.
  7. Conduct due diligence and monitoring of investment managers and their approach to climate risk.
  8. Continue to develop its management processes and implement changes to its climate change policy and internal risk framework, which apply to all of the fund’s investments, to reflect the above.
  9. Seek to require that its investment managers and advisers comply with the above.

“Today’s settlement gives me, and Rest’s almost two million members, the reassurance that we need to know that our retirement savings will be invested responsibly in the face of the climate crisis.” [Mark McVeigh, Plaintiff]

$3 trillion

The total value of Australia’s superannuation industry. It is the fourth largest asset pool in the world

$60 billion AUD

The value of assets held by REST

1.7 million

The number of members of REST, who invest their superannuation savings in REST funds


The number of specific initiatives which REST committed to as part of its settlement


Utilizing a variety of legal arguments to increase the likelihood that one such argument will succeed in front of the court.

The petition includes a variety of claims, ranging from non-disclosure obligations to bolder claims relating to fiduciary and statutory duties of trustees towards beneficiaries. The initial pleading only alleged breaches of non-disclosure obligations, but Mr. McVeigh expanded his pleading after further communications with REST which suggested its management of climate-related risks was more problematic than Mr. McVeigh first anticipated.

Applying a developed body of law in the context of climate change.

Mr. McVeagh argued that the superannuation fund trustees were under a legal duty to consider the risks associated with climate change, stemming from its obligations under the Superannuation Industry (Supervision) Act and its fiduciary obligations found under common law. This is part of a growing movement in climate litigation to recognize that directors have a legal duty to consider climate change risks. This recognizes that climate change should be assessed as a financial risk and will impact most corners of the economy.


New Wave of Climate litigation: Investor Activism

McVeigh is an example of the new wave of climate litigation being brought against trustees of different types of investment funds. It recognizes the increasing consensus on the financial risks presented by climate change and the duties of those who manage and control investment funds to take into account climate change-associated risks.

“This case is a ground-breaking recognition of the material financial risk that climate change poses to the economy and society, and the role that superfunds have in managing it. I hope it will go some way to catalyzing the Australian super fund industry, which, with almost three trillion dollars under management, has the potential to make or break our climate response.” [Mark McVeigh, Plaintiff]


Investor activism is particularly important in the context of superannuation funds. Pension funds worldwide are falling short on their climate commitments. Among the world’s 100 largest pension funds, only 10 percent offer climate-aware investment options, and investments in low-carbon solutions amount to less than 1 percent of their assets.



The fact that REST settled the case suggests the importance of climate-related financial risks for pension funds.

On the one hand, settlement could be seen as a lost opportunity, in that it might have been helpful and powerful to have judicial consideration of the obligations of superannuation trustees as they relate to managing climate change risk. It would have provided more certainty for pension fund trustees.

However, the settlement also sets a standard against which other funds can expect to be measured by their members. Directors or trustees of other superannuation funds around the world might consider how its fund compares with the standards set by REST in the settlement.

The settlement also had direct impacts on the ground. It meant that REST changed its approach to climate-related risk management. And even though the commitments made by REST in its media statement accompanying the settlement are not legally binding, REST would be in treacherous territory if it were to renege from those commitments.


A trust is a relationship that involves one party holding property for the benefit of another.
Administrative Law
Administrative law “refers to the branch of law governing the creation and operation of administrative agencies. [It] encompasses laws and legal principles governing the administration and regulation of government agencies.”
Beneficiaries are those who stand to benefit from a trust. Once beneficiaries receive trust property, they have full legal rights over it.
Trustees hold and manage the trust property (i.e., the property of another, the beneficiary), and they must act in the interests of beneficiaries. This means, for example, they must act in good faith, show loyalty to beneficiaries, be impartial and even-handed, and keep accurate records and information.

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