A newly filed class action lawsuit could reshape how retirement plan fiduciaries consider climate-related financial risk.
On March 3, Renee Kvek, a participant in Cushman & Wakefield's 401(k) plan, filed a lawsuit in the U.S. District Court for the Western District of Washington against the global commercial real estate services firm, along with its investment committee and unnamed fiduciaries. The complaint alleges violations of the Employee Retirement Income Security Act (ERISA), claiming the company failed to prudently manage its 401(k) plan and exposed tens of thousands of employees' retirement savings to avoidable financial risks. Cushman & Wakefield has not publicly responded.
At the center of the complaint is the Westwood Quality SmallCap Fund, which plaintiffs say is heavily concentrated in carbon-intensive sectors and companies vulnerable to climate-related regulation, extreme weather or other environmental pressures, leaving participants exposed to systemic climate-related financial risk. The complaint details that the fund explicitly disclaims climate risk analysis, underperformed benchmarks by 17% in 2025 and charged significantly higher fees than comparable funds.
The complaint argues the fund's failure to integrate climate considerations constitutes a breach of ERISA fiduciary duties. By ignoring environmental risks, the fund increases vulnerability to market shocks while chronic underperformance and high fees compound the financial impact, the lawsuit says. This combination, plaintiffs contend, jeopardizes participants' retirement security, which is a core fiduciary concern under ERISA.
The complaint also highlights a contrast between the company's corporate climate risk management and its stewardship of employee retirement capital. While the company publicly acknowledges climate change as a material threat to its operations and has insulated its balance sheet, plaintiffs claim it failed to apply the same scrutiny to its 401(k) plan.
"Though often misrepresented as a purely ethical issue, climate risk is actually a severe economic risk," said Kimberly Blake, attorney at environmental legal group ClientEarth USA, which represents the plaintiff. "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."
The complaint further raises concerns about potential conflicts of interest with Fidelity, which both advises and administers the plan.
The lawsuit seeks removal of the Westwood Fund from the plan, restoration of losses to participants and injunctive relief to ensure fiduciaries consider climate-related financial risk in the future.
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