American Airlines violated federal law by enlisting an investment manager that incorporated environmental, social and governance goals in its management of the company’s retirement plan, a federal judge ruled Friday.

Judge Reed O’Connor of the Northern District of Texas found that the company breached its fiduciary duty “by failing to loyally act solely” in the best financial interests of the retirement plan’s more than 100,000 beneficiaries.

American Airlines’ selection of BlackRock to manage most of its $26 billion retirement plan harmed the financial interests of plan participants because of the company’s “ESG activism” that dictated that “delivering financial performance was no longer enough,” O’Connor wrote.

“ESG investing is a strategy that considers or pursues a non-pecuniary interest as an end itself rather than as a means to some financial end,” wrote O’Connor, an appointee of George W. Bush, who cited statistics showing how ESG funds underperform traditional investments.

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