American Airlines broke the law by focusing on ESG in 401(k) plans: judge

A federal judge in Texas on Friday said American Airlines violated federal law by basing investment decisions for its employee retirement plan on environmental, social, and other non-financial factors.The ruling by US 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, 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 Republican former President George W.Bush.The judge ruled after holding a four-day non-jury trial in June, in a class action by American pilot Bryan Spence on behalf of more than 100,000 participants in the retirement plan.American did not immediately respond to a request for comment.BlackRock was not involved in the lawsuit....