Australian Government sued by 23-year-old Melbourne student over financial risks of climate change: ABC NEWS

Katta O'Donnell, 23, is suing the Government over the risks

 to her investments through climate change. 

(Supplied: Molly Townsend)

A 23-year-old Melbourne law student is suing the Australian Government for failing to disclose the risk climate change poses to Australians' super and other safe investments.

Key points:

• The world-first case alleges the Government failed in its duty to disclose climate change's impact on the value of government bonds
• The case is being led by a 23-year-old student and investor who says she did it to "protect her future"
• Experts say it could open the floodgates for other litigation by tying climate change to real-world financial risk
  
  
  The world-first case filed on Wednesday in the Federal Court alleges the Government, as well as two government officials, failed in a duty to disclose how climate change would impact the value of government bonds. 

Katta O'Donnell, the head litigant for the class action suit, said she hoped the case would change the way Australia handled climate change. 

"I'm suing the Government because I'm 23 [and] I think I need to be aware of the risks to my money and to the whole of society and the Australian economy," Ms O'Donnell said.

"I think the Government needs to stop keeping us in the dark so we can be aware of the risks that we're all faced with."

Experts say it is the first where a national government has been sued for its lack of transparency on climate risks. 

Government bonds are considered the safest form of investment, with most Australians invested in them through compulsory superannuation.

Bonds are similar to shares, but instead of investing in companies, the investor lends a government money to build infrastructure and fund critical services such as health, welfare and national security.

Ms O'Donnell, who has invested in bonds independently from her super, said she did it to "protect her future".

However bonds, like shares, can lose value if they become less attractive to the market. This can occur if investors question a government's ability to repay them due to rising government debt, ethical or reputational reasons.

Ms O'Donnell said watching the impact of bushfires in Australia made her worry about the value of her bonds.

Despite the Government not disclosing climate-related risks to its investment products, government regulators are increasingly forcing companies to disclose how climate change will impact their shareholders.

APRA — the Australian financial industry regulator — said in 2017 that climate change was not only a "foreseeable" risk, but also "material and actionable now".

APRA is working with corporate regulator ASIC and the Reserve Bank of Australia to ensure public companies are examining climate risk, disclosing it to investors, and acting on it.

Ms O'Donnell's lawyer, David Barnden from Equity Generation Lawyers, said the duty to be transparent extended to the Government.

"We allege that the Government is misleading and deceiving investors by not telling them about the risks," Mr Barnden said.

Experts say the drought and the threat of bushfires

 in Australia exposes the Government

 to more financial risk compared to other countries. 

(ABC News: Jordan Hayne)

Read the complete ABC NEWS story  By national science, technology and environment reporter Michael Slezak and the Specialist Reporting Team's Rahni Sadler