Published July 21, 2026
By Charles Slidders, Manager and Senior Attorney, and Conor MacDonald, Attorney, for Financial Strategies at the Center for International Environmental Law (CIEL).
This piece was originally published as an opinion by Forward Law Review.
Recent lawsuits in the US and Canada suggest fiduciary duties may become a growing legal battleground over how pension funds, investment managers and financial institutions address climate risk, write Conor MacDonald and Charles Slidders at the Center for International Environmental Law.
As fossil fuel companies seek legal protection against climate-related liability claims, climate litigation is evolving in a new direction.
The US Congress is considering legislation that would immunise fossil fuel companies from lawsuits that aim to hold them accountable for their contribution to greenhouse gas emissions and climate-related harms. At the same time, the US Supreme Court, in Board of County Commissioners of Boulder County et al v Suncor Energy et al (Boulder), has agreed to consider whether plaintiffs’ state law claims against the fossil fuel sector are pre-empted by federal law.
The Supreme Court’s decision may significantly narrow a growing body of cases attempting to impose climate liability on large emitters.
But even if these efforts succeed, climate litigation will not stop. Instead, plaintiffs seeking compensation for climate harm are increasingly targeting the financial facilitators of the fossil fuel economy — banks, insurers, institutional investors, investment firms and asset managers. That shift is already underway, as litigation expands beyond direct claims against fossil fuel producers to the financial actors who manage and allocate climate-related risk.
Unlike traditional climate tort claims, fiduciary duty suits focus less on proving responsibility for global emissions and more on whether financial actors adequately assessed and managed foreseeable climate-related financial risks.
Climate risk is financial risk
Kvek v Cushman & Wakefield (Kvek) was filed in the US District Court for the Western District of Washington in March 2026. In this case, a 401(k) participant alleges that Cushman, one of the world’s largest real estate companies, violated its fiduciary duties by failing to protect its workers’ retirement savings from climate-related risk.
According to the plaintiff’s complaint, Cushman allegedly implements “a sophisticated climate risk strategy, employing a range of climate risk management tools to inform its financial decisions,” and markets itself as an expert in assessing and mitigating climate-related risks. Indeed, Cushman has published material entitled “How to Manage Climate Risk” and “publicly cautioned that ‘climate risk is financial risk.’”
Despite this promotional material, Cushman was “openly indifferent to climate risk” and “exposed employee retirement savings to significant, unreasonable climate-related financial risk,” the plaintiff alleges. The claim focuses on the Westwood Fund, an investment option in Cushman’s 401(k) ERISA plan, which the complaint says was disproportionately exposed in sectors “particularly susceptible to climate related-financial risks.”
The plaintiff points to investments in “sectors with well-documented physical climate vulnerabilities,” including timberlands in areas particularly exposed to wildfires and regional banks with geographically concentrated loan portfolios exposed to hurricanes. The complaint also identifies investments in fossil fuel producers confronting the existential risk posed by the transition to a fossil-free economy.
Kvek alleges that Cushman’s failure to adequately consider these climate-related financial risks when selecting and retaining the Westwood Fund violated its fiduciary duty to act “with the care, skill, prudence, and diligence” required of a prudent person under the circumstances. The claim argues that this standard requires fiduciaries to consider all risks, including climate risk. If accepted, it would mean fiduciaries cannot treat climate risk as optional or separate from financial risk.
Legal accountability in climate litigation may no longer be confined to fossil fuel producers. Investors, asset managers, and other financial intermediaries that fail to account for climate risk as a material financial risk will face mounting legal exposure.
Fiduciary duty crosses borders and generations
Kvek follows the October 2025 filing of Hirji et al v Canada Pension Plan Investment Board (Hirji) in Ontario’s Superior Court in Canada, which similarly alleges fiduciary duty violations by pension plan managers for failing to address climate risk.
In Hirji, four plaintiffs in Ontario allege that the management of the Canada Pension Plan (CPP), the sixth-largest pension fund manager in the world, breached its fiduciary duties. They allege that CPP relied on flawed climate-risk modelling and made reckless investments in fossil fuel expansion. Central to the case is CPP’s duty of impartiality “to act fairly and equitably among different classes of beneficiaries.”
According to the plaintiffs, the duty of impartiality requires balancing the interests of present beneficiaries against future ones and accounting for the intergenerational transfer of climate risk. The plaintiffs are “young contributors” who will not be eligible for retirement benefits until after 2050 and who, they argue, will disproportionately bear the climate-related financial risks of CPP’s current investment strategy.
Hirji therefore adds an intergenerational dimension: climate risk is not only a question of how fiduciaries manage assets today, but also of how they allocate risk between current and future beneficiaries.
In a press release at the time, CPP Investments said: “CPP Investments is guided by a statutory objective: to invest the assets of the Canada Pension Plan (CPP) to achieve a maximum rate of return without undue risk of loss, and manage the CPP Fund in the best interests of contributors and beneficiaries.”
It continued: “Climate change presents financial risks and opportunities. We integrate material climate-related considerations into investment and risk processes across asset classes and regions where material, engage with companies to protect and grow value, and invest where transition and resilience can create long-term returns.”
Fiduciary duty cases will multiply
Kvek and Hirji reflect a broader trend that legal scholars have long anticipated: fiduciary duties are likely to evolve to include consideration of climate risk. That evolution is gaining force as company executives and asset managers face growing pressure from investors, shareholders, and customers to assess climate risks and adopt strategies that address the financial risk of climate change.
The outcome of Boulder and the proposed immunity legislation may have a dramatic impact on efforts to hold fossil fuel companies directly accountable through climate liability lawsuits. However, even if those efforts effectively shield the energy sector, climate litigation will undoubtedly continue, with fiduciary duty claims becoming an important pathway for climate accountability.
In the courtroom, as in the market, ignoring climate risk is becoming increasingly costly: financial institutions connected to fossil fuel investment are increasingly facing scrutiny over how they assess and manage climate-related financial risk.
Cushman & Wakefield and CPP were approached for comment. More background on Kvek can be found here. More background on Hirji can be found here.