O’Donnell v Commonwealth Settlement Statement

AGREED PUBLIC STATEMENT   

Date: 16 October 2023

1. This statement is made by the Commonwealth of Australia in settlement of the proceeding commenced in the Federal Court of Australia by Kathleen O’Donnell against the Commonwealth (Proceeding No VID482/2020). This statement is published on the websites of the Department of Treasury and Ms O’Donnell’s solicitors (Equity Generation Lawyers).
2. In the proceeding in the Federal Court, Ms O’Donnell claimed that the Commonwealth failed to disclose information relating to climate change in connection with the issue of Exchange­traded Australian Government Bonds (eAGBs).
3. The parties have agreed that Ms O’Donnell will discontinue the proceeding with no order as to costs when the Court has approved this settlement.
4. Climate change is a systemic risk that presents significant risks and opportunities for Australia’s economy, regions, industries, and communities. Achieving Australia’s emissions reduction commitments and realising the opportunities that accompany the transition will require significant investment by governments and the private sector. Uncertainty around the magnitude and timing of the physical impacts of climate change and the global transition to net zero emissions translates to uncertainty about the fiscal impacts of climate change. And, as a consequence, there is uncertainty about whether the fiscal impacts of climate change may affect (if at all) the value of Commonwealth Government Securities (also known as Australian Government Bonds or AGBs) and, in turn, eAGBs.
5. The economic and climatic changes brought about by climate change will have fiscal impacts. For example, the new industries and jobs emerging from the net zero transformation will impact the structure of the economy and, in turn, the tax base. Extreme weather events are also expected to occur with increased severity and frequency, which will increase demand for disaster relief payments and infrastructure repairs. Statement 3 of the 2022-23 October Budget outlined the drivers and nature of these fiscal impacts in detail, as well as the climate-related spending being undertaken by the Australian Government to respond to climate change.
6. The 2023-24 Budget continues this practice by transparently reporting $4.6 billion in new climate-related expenditure. This is further to the historic $24.9 billion in new climate-related spending announced in the October 2022-23 Budget and is additional to ongoing climate-related expenditure initiated prior to these budgets. The Government’s approach to reporting climate-related spending is informed by the climate-reporting practices of international peers and is presented within the context of international best practice, as well as contributing to work underway to strengthen transparency in future budgets.
7. The Government is developing a package of sustainable finance reforms, including the establishment of a sovereign green bonds program and regulatory reforms, to increase the transparency and credibility of Australia’s growing sustainable finance market. The Government’s intention is that these reforms will assist investors to align their investment decisions with net zero emissions targets and increase the flow of capital toward new opportunities that support Australia’s net zero pathway.
8. In accordance with the requirements of the Climate Change Act 2022 (Cth), the Commonwealth will continue to publish an Annual Climate Change Statement. Among other things, the Annual Climate Change Statement addresses the risks to Australia from climate change impacts, such as those relating to Australia’s economy. The first Annual Climate Change Statement was tabled in Parliament on 1 December 2022 and may be found at https://www.dcceew.qov.au/climate-chanqe/strateqies/annual-climate-chanqe-statement.
9. The Commonwealth acknowledges that: