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Climate Change Risk and Sovereign Bond Investments: The Case of O’Donnell v Commonwealth of Australia

Jacqueline Peel, Rebekkah Markey-Towler


Sovereign bonds – fixed-term loans from investors to governments with regular interest payments – are conventionally considered a safe form of investment. But a new class action filed in Australia, O’Donnell v Commonwealth, argues that even these investments will not be immune from the effects of climate change and that these risks ought to be disclosed to investors. This article examines the prospects of the case and its broader significance in advancing climate risk disclosure for investments. We argue that the O’Donnell case, building on existing trends in climate change litigation, has the potential to strengthen nascent jurisprudence on climate risk disclosure, while also extending that jurisprudence to the new field of investment in sovereign bonds.

Jacqueline Peel, Professor of Law, Melbourne Law School, University of Melbourne, Australia. This research received funding support from the Australian Research Council pursuant to a Discovery Project grant on ‘Devising a Legal Blueprint for Corporate Energy Transition’ (DP160100225, Funding Period: 2016-2020). Rebekkah Markey-Towler, BA/LLB (Hons), University of Queensland; GradDipLegalPrac, College of Law; Research Assistant, Melbourne Law School, University of Melbourne, Australia.


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