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15 January 2025 / Essay
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Copy LinkThe recent federal court ruling against American Airlines over its inclusion of environmental, social & governance (ESG) considerations in its employee retirement plan marks a significant development in the evolving ESG landscape. Decided in the US District Court for the Northern District of Texas, this case highlights the growing legal and political scrutiny surrounding ESG investing in the US, raising critical questions about fiduciary duties, financial performance, and the future of corporate sustainability practices.
In 2023, Bryan Spence, a former American Airlines pilot, filed a lawsuit on behalf of over 100,000 participants in the company’s $26 billion 401(k) retirement plan. The suit alleged that American Airlines had violated its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by allowing its asset managers, including BlackRock, to prioritize ESG measures over financial returns.
Key claims by the plaintiffs included:
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