A lawsuit filed by an environmental scientist in Australia against his pension fund for not adequately disclosing or assessing the effect of climate change on its investments has been settled.

Bloomberg reports that the Retail Employees Superannuation Trust, commonly referred to as Rest, has committed to net zero emissions in its portfolio by 2050. The fund also said it would “enhance its consideration” of such risks when making investments, publicly reveal its holdings and monitor the approach of its external fund managers, according to the news report.

Maximilian Horster, managing director and head of climate solutions at Institutional Shareholder Services (ISS)* ESG, previously told PLANSPONSOR that the Australian environmental scientist was not suing for his retirement plan to invest differently—he sued because plan fiduciaries didn’t even understand or measure the risk from climate change. Horster said the first step for plan fiduciaries is to understand what the risk of climate change is to investments or how to invest to help mitigate climate change.

More retirement plan participants are asking for environmental, social and governance (ESG) investments in their plans, and many academics and retirement plan industry professionals alike believe evaluating ESG factors is part of a plan sponsor’s fiduciary duties. This summer, the Department of Labor (DOL) issued a proposed regulation that seemed to create stricter limits for ESG investing in retirement plans. However, during the comment period, the DOL received more than 1,500 comments—1,100 of which criticized the proposed rule.

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