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Judge rules American Airlines violated fiduciary duties (2025)
| Environmental, social, and corporate governance |
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
U.S. District Judge Reed O’Connor ruled Jan. 10 against the ESG considerations in American Airlines' retirement plan. O’Connor argued the ESG investments did not align with the company’s legal obligation to make investments solely for the financial benefit of retirees. He said federal law prohibited non-financial considerations in investments, “no matter how noble it might view the aim.”
This ruling marks the first major federal decision opposing ESG investments, potentially paving the way for further legal challenges to retirement and pension plans that integrate ESG factors into their strategies.
According to The Wall Street Journal:
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In the suit, an American airline pilot alleged that the company’s retirement investment plans through BlackRock underperformed because of the firm’s ESG focus. … The judge said that American’s 'incestuous relationship with BlackRock and its own corporate goals disloyally influenced administration of the Plan.' … The judge said BlackRock supported proposals linked to climate change that were unrelated to economic interests. He said the airline 'utterly failed to loyally investigate BlackRock’s ESG investment activities.'[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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