A judge ruled the airline violated its fiduciary duty to loyalty through its retirement plan management, though experts say “the bar is being set really low for what's a violation.”

Whether, and the extent to which, a plan fiduciary can consider nonpecuniary environmental, social and governance (“ESG”) objectives in selecting

American Airlines Inc. violated federal law by filling its 401(k) plan with funds from investment companies that pursue environmental, social, and corporate governance goals, a Texas federal judge ruled Friday in the biggest victory yet for opponents of the strategy.

Berkshire coal plants emit more nitrogen oxide gases than any other coal-fired fleet in the country. Despite big investments in renewable energy, the company has resisted efforts by regulators to make coal plants cleaner.

Defined contribution plans using environmental, social and governance principles have suffered a setback and could face more litigation risk, following a Texas federal judge’s Jan. 10 ruling against American Airlines and its 401 (k) plan fiduciaries, some ERISA attorneys warn.

A federal judge ruled Friday that American Airlines violated its legal responsibilities in managing employees’ retirement assets by encouraging environmentally and socially responsible investing in its 401(k) plan.

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.

Case over pension scheme management highlights rising risks of legal challenges over environmentally-focused policies

A federal judge in one of the country’s most conservative district courts ruled Friday that American Airlines unlawfully incorporated environmental and sustainable governance (ESG) factors into its employee retirement plan.