Commercial real estate giant explicitly acknowledged that climate change poses a material threat to its own business operations and moved to insulate its balance sheet, yet allegedly failed to apply similar risk analysis to its 401(k) plan.
A former employee of Cushman & Wakefield U.S. Inc. filed a first-of-its kind class-action lawsuit alleging that the company breached its duties under the Employee Retirement Income Security Act (ERISA) by failing to protect workers’ 401(k) savings from material climate-related financial risks. If successful, the lawsuit could set a significant precedent, forcing a fundamental shift in how risk is managed across the entire $12 trillion U.S. retirement market.
The complaint alleges that Cushman & Wakefield failed to evaluate, monitor and remove the Westwood Quality SmallCap Fund, which exposes retirement savers to dangerous levels of climate-related financial risk while at the same time underperforming and charging unreasonably high fees.
According to the complaint, the Westwood Quality SmallCap Fund expressly disclaims climate risk analysis, while its returns lagged benchmarks by 17% in 2025 and while charging significantly higher fees than comparable funds. By retaining the fund, the lawsuit alleges Cushman & Wakefield exposed workers to inordinate levels of climate-related risk and persistent underperformance compared to available benchmarks.
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The complaint also highlights an alleged discrepancy between Cushman & Wakefield’s corporate risk management and its stewardship of employee capital. While the company has explicitly acknowledged that climate change is a financial risk that poses a material threat to its own business operations, has moved to insulate its balance sheet accordingly, and offers expertise to clients on how to manage the risk, the lawsuit claims the company failed to apply similar risk analysis to its 401(k) plan.
The lawsuit also alleges the company failed to guard against conflicts of interest between participants and the financial services firm Fidelity, which both advised and administered the plan.
The case could have profound implications for the $12 trillion in retirement savings held in 401(k)-style plans, potentially establishing a legal precedent that recognizes climate risk management as a mandatory component of fiduciary duty. The lawsuit itself signals to the financial industry that fiduciaries cannot ignore the economic reality of climate change without facing liability.
“When your employer offers you a set of retirement options, you assume they’ve done the work to make sure those options are sound. You pick a fund, you contribute every month, and you trust that someone is paying attention to the risks,” said Renee Kvek, lead plaintiff in this case and former employee for Cushman & Wakefield. “I was disappointed to learn how exposed my savings were to climate-related financial risks, especially when the company clearly understood those risks in its own operations.
“Like most of my colleagues, my ability to retire depends on the growth and safety of my 401(k) account. It’s really important that employers understand what types of investments they are offering through their 401(k) plans and how they can affect their employees’ retirement security.”
“Though often misrepresented as a purely ethical issue, climate risk is actually a severe economic risk,” said Kimberly Blake, attorney at ClientEarth USA. “You cannot claim to be a prudent fiduciary while ignoring the biggest systemic threat to the global economy. Climate risk isn’t just about fossil-fuel stocks and coastal real estate. It’s a broad, interconnected threat that touches huge parts of the economy. What’s striking here is that Cushman & Wakefield understood these risks in its own business operations, but it failed to protect its workers’ retirement savings from the same dangers.”
“This first-of-its-kind legal challenge under ERISA will hopefully show 401(k) plans that the financial risks associated with climate cannot be ignored,” said Michelle C. Yau, chair of Cohen Milstein’s ERISA & Employee Benefits practice.
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