Posted on 05/26/2024 9:57:33 PM PDT by george76
Pilot alleges that the airlines’ ESG investment strategy violates pension fiduciary duties..
A district judge has granted a pilot’s request for a class-action lawsuit against American Airlines for allegedly investing pension funds into environmental, social, and governance (ESG) funds.
The case revolves around the allegation that American Airlines—headquartered in Fort Worth, Texas—violated its fiduciary obligation to the Employee Retirement Income Security Act (ERISA) “by investing millions of dollars of American Airlines employees’ retirement savings with investment managers and investment funds that pursue political agendas” through ESG initiatives.
“By pursuing ESG goals, Defendants gave Plan assets to fund managers, such as BlackRock, who allegedly ignored financial returns as the exclusive purpose and lowered the value of Plan participants’ investments,”..
In addition to being disloyal to the employees, the plaintiff, Bryan Spence, argues that American Airlines’ investments were “imprudent because it is well known that ESG funds are associated with poor performance given the detrimental effects of such activism on stock prices.”
“To remedy these alleged ERISA violations, Plaintiff filed this lawsuit individually and on behalf of a proposed class of Plan participants and beneficiaries,” the order says. “ERISA authorized participants in a qualifying plan to bring an action on behalf of other participants to enforce the statute’s fiduciary obligations and remedial provisions, as well as recover all losses to a plan caused by a breach of a fiduciary duty.”
Texas District Judge Reed O’Conner—a George W. Bush appointee—writes in his order that the case is eligible for class action because of the similarities of ERISA violations.
“Even if the damages are diverse, finding in favor of Plaintiff on his ERISA claims would also resolve the ERISA claims of this class,” he writes.
The remedy for damages would be the same for all plaintiffs in the class-action lawsuit, he says.
‘Underperforms Financially’..
According to the complaint, ESG funds are usually more expensive for pension enrollees than non-ESG funds.
They also “underperform financially,” and instead of maximizing “risk-adjusted financial returns” for enrollees, they “engage in shareholder activism to achieve ESG policy agendas.”
Defendants have also selected and included as investment options funds that are managed by investment companies that pursue ESG policy agendas through proxy voting and shareholding activism,” the complaint says. “Many of these funds are not branded or marketed as ESG funds; however, the actions of their investment advisors and managers give rise to the same ERISA violations as those funds that do market themselves as ESG funds.”
The complaint states that Mr. Spence, an American Airlines pilot and Lt. Col. in the U.S. Air Force, “has suffered specific financial damages” as a result of American Airlines’ “unlawful conduct.”
The pension plan itself “has suffered millions of dollars in losses because of the Defendants’ fiduciary breaches and the Plan remains vulnerable to continuing harm.”
The complaint defines ESG as an investment strategy “aimed at influencing societal changes.”
“Generally, three criteria are used to evaluate companies for ESG investing,” the complaint says.
‘Aggressive Climate Goals’..
Among the criteria are environmental commitments to reduce a company’s carbon footprint and a pledge to support Diversity, Equity, and Inclusion (DEI) agendas.
...
Sacrificing Safety for Ideology..
Currently, the airline industry is under scrutiny for what critics say is sacrificing safety and performance for DEI ideology.
...
Elon Musk criticized the airline industry’s emphasis on DEI initiatives in a post on X.
“Do you want to fly in an airplane where they prioritized DEI hiring over your safety? That is actually happening,” he said.
>> A district judge has granted a pilot’s request for a class-action lawsuit against American Airlines for allegedly investing pension funds into environmental, social, and governance (ESG) funds.
Very cool. We need to see a lot more of this.
Yes
“Very cool. We need to see a lot more of this.”
ABSOLUTELY. And I hope that those who went with this ESG DEI crap are sued to starvation when it ends. They had CLEAR RULES to abide by, with that being essentially the following: “Do whatever is legally permissible to increase Shareholder Value.”
Loading up their companies with DEIs was about as far as possible that one can get from the above directive and they need to have their asses sued off of them, now.
>> They had CLEAR RULES to abide by, with that being essentially the following: “Do whatever is legally permissible to increase Shareholder Value.”
Absolutely. That the corporate mandate to increase shareholder value in simple dollar terms could somehow be morphed into “shareholder value also includes assuaging progressive conscience” is yet another manifestation of progressive “truth is a construct” doctrine.
In other words, ESG’s danger is far more insidious and damaging than its obvious effect on investment returns — yet fighting via lawsuit the deleterious effect on investment returns is EXACTLY the best tactic available right now.
American Airlines: Give that judge and the lawyers seats next to the side exit doors on every flight.
And continue with the military’s testing of the new ejector seats for them. I feel so patriotic.
I made sure to copy the link to the filing and sent it to my HR/401K committee to get better choices for my retirement plan.
Everyone should insist that their employer take their fiduciary responsibility seriously.
📌👁️
Good.
IIRC, in the UK, the pensions are heavily invested in green energy and other ESG garbage which is why they are pushing for its success.
Excellent! It would be nice to see BlackRock’s CEO, Larry Fink, taken down a peg.
Love your profile!
“We the People have natural rights given to us from God and only God, not Man. These natural rights must be cherished and protected. They are not gifts from our government(s) to us. Therefore, these natural rights cannot be taken from us by our government(s).”
WELL SAID. Amen!
VERY VERY COOL.
this needs to go viral. it’s time for some pushback BIG-TIME.
VERY VERY COOL.
this needs to go viral. it’s time for some pushback BIG-TIME.
Good
No different than gangsters getting loans from unions for their casinos.
Five or more years ago, the wizards of Leftist smarts decided to change the way they invested the California Public Employees in Retirement System (CalPers). This is a massive system. They started divesting from the hydrocarbon industry, and sought more politically correct methods. Once someone with power found out, it was quickly corrected. No matter what a Leftist may say in public, they know how the world works.
And when it comes to money, their credo is "what's mine is mine, and what's yours is negotiable."
Always excited with ESG & DEI anything. Suddenly Karine Jean-Pierre came to mind. /sacr
Yep - the absolute AUDACITY of gambling people’s retirement money for YOUR political agenda!!!!!!
There needs to be consequences. Loss of license if there is one, confiscation of THEIR money/property to give back to their victims and very public trials with punishment.
Excellent news.
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