UK pension funds are at risk of litigation if trustees fail to take account of climate change, according to legal experts.
The warning came from lawyers at ClientEarth, a non-profit environmental law organisation. It said a member of an Australian superannuation fund has recently brought the first climate change claim of any kind against his fund due to lack of disclosure on climate risk policies. ClientEarth has also published two reports from consultants on the financial risks of climate change. It has also written to trustees at 14 pension funds after a House of Commons’ Environmental Audit Committee found a poor understanding of climate risk at some of the UK’s largest pension funds.
ClientEarth lawyer, Joanne Etherton, said: “Trustees’ legal duties are not static and a court would look to the evidence available and how their peers are responding in determining whether they are in breach – in short, legal duties on climate risk are evolving. The EAC raised climate risk as a key financial issue with some of the UK’s biggest schemes and some of the responses showed a woeful level of understanding and awareness, suggesting that trustees are still not clear on what is legally required of them. We are now putting these schemes on notice of the available evidence and setting out the standard that they should be looking to meet as they develop their climate policies, as well as the risk for failing to do so.”