American Airlines violated federal law by considering ESG factors in its employee retirement plan

From Investing.com: 2025-01-11 16:35:32

A federal judge in Texas ruled that American Airlines violated federal law by making investment decisions for its employee retirement plan based on non-financial factors. The judge said American breached its duty by allowing BlackRock to focus on ESG factors. BlackRock denied any wrongdoing and said it acts in the best financial interests of its clients.

The ruling came after a class action lawsuit by American pilot Bryan Spence, representing over 100,000 plan participants. The judge will determine if damages are owed to the class members. American is reviewing the decision, while BlackRock faces separate legal challenges over climate activism and antitrust claims.

Despite breaching its duty of loyalty, the judge found that American did not violate its duty of prudence because it followed industry standards. The judge, who has a history of ruling in favor of conservative litigants, noted that the Biden administration’s rule allowing ESG factors in investment decisions may be challenged by Republican-led states and Liberty Energy.



Read more at Investing.com: American Airlines’ focus on ESG in 401(k) plan is illegal, US judge rules By Reuters