Consumers’ Research, a consumer advocacy nonprofit, is warning Fortune 500 companies that the recent ruling against American American airlines over its environment, social and governance (ESG) policies could leave them legally vulnerable. 

American Airlines pilot Bryan Spence filed the lawsuit in 2023 in the Federal District Court of Northern Texas, ESG Dive reported, alleging that the airline, by failing to monitor the proxy voting of its investment managers which included BlackRock, violated its fiduciary duties to prudence. The lawsuit also claimed that the company’s ESG goals created a conflict of interest when these goals were combined with considerations made by BlackRock and others. BlackRock is the world's largest asset manager, with more than $10 trillion in assets under management as of Q1 2024. 

Judge Reed O’Connor ruled that the airline fulfilled its duty of prudence, but American Airlines “breached their fiduciary duty by failing to loyally act solely in the retirement plan’s best financial interests by allowing their corporate interests, as well as BlackRock’s ESG interests, to influence management of the plan.” 

Warning letters

Consumers’ Research sent letters to all Fortune 500 companies warning them that the ruling could expose them to “significant and future liability.” 

“Any corporation or company using BlackRock to manage their pension plans is now effectively aware that BlackRock has acted with a dual motive in the past and is still publicly committed to doing the same moving forward...We highly recommend that your company strenuously review its relationship with BlackRock and whether continuing with them as a retirement plan manager is worth the colossal risks to your companies and yourselves,” the letter states. 

Will Hild, executive director of Consumers’ Research, said in a statement that BlackRock uses its assets under management to push a far-left political agenda, which betrays their fiduciary duty, creating liabilities for the companies that hire the firm. 

"Unless they envy American Airlines’ fate, Fortune 500 companies should fire BlackRock and find an asset manager who is committed to proper investing, not woke politics,” Hild said. 

BlackRock has long denied that its commitment to ESG initiatives in any way compromise its fiduciary duties to its clients.