American Airlines' focus on ESG in 401(k) plan is illegal, US judge rules
Source: Reuters
Jan 10 (Reuters) - A federal judge in Texas on Friday said American Airlines (AAL.O), opens new tab violated federal law by basing investment decisions for its employee retirement plan on environmental, social and other non-financial factors.
The ruling by U.S. District Judge Reed O'Connor appeared to be the first of its kind amid growing backlash by conservatives to an uptick in socially-conscious investing.
O'Connor said American had breached its legal duty to make investment decisions based solely on the financial interests of 401(k) plan beneficiaries by allowing BlackRock (BLK.N), opens new tab, its asset manager and a major shareholder, to focus on environmental, social and corporate governance (ESG) factors.
"The evidence made clear that [American’s] incestuous relationship with BlackRock and its own corporate goals disloyally influenced administration of the Plan," wrote O'Connor, an appointee of
Read more: https://www.reuters.com/business/aerospace-defense/american-airlines-focus-esg-401k-plan-is-illegal-us-judge-rules-2025-01-10/
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