Conservative Texas District Judge Reed O’Connor Takes Time From His Hectic Schedule to destroy Truly through the Affordable Care Act. unhinged decision.
According to O’Connor, American Airlines violated federal law by offering a 401(k) plan that included funds managed by an investment firm with environmental, social and corporate governance (ESG) goals. It’s the newest, dumbest front in the “woke” war.
Employee Retirement Security Act of 1974 (ERISA) need People who manage retirement investments to act in the best interests of the participants. This is a good thing! This means that fund managers cannot prioritize their own financial interests and must diversify the fund’s investments to minimize the risk of significant losses.
The lawsuit arose when a former pilot filed a lawsuit in 2023, alleging that American Airlines violated ERISA by mismanaging his 401(k) funds. Is it because the company is lining its pockets with retirees’ hard-earned cash? no. Was it because the company’s 401(k) fund was performing poorly? no. This is because American Airlines hired BlackRock, the world’s largest asset management company that manages trillions of dollars in investments, to manage retirement funds.
A few years ago, BlackRock began establishing itself as an industry leader. its focus is Environmental sustainability of investments. In 2021, BlackRock, then the second-largest holder of Exxon stock, was cast. proxy voting On behalf of activist investors who want climate-conscious directors on corporate boards.
Lest this make BlackRock sound like it’s taking a step back from its partnerships with Greta Thunberg and others, the company is still billions of investment We run the world on fossil fuels. Biggest Bitcoin Funds. This is a fund manager, not Santa Claus. BlackRock also had a great year. retreat Previous support for climate action is not surprising, considering there are 11 red states. Recently sued thereon.
The usual suspects are: Florida, louisianaand texasAnd although it withdrew its primary assets from BlackRock, the American Airlines lawsuit was the first successful attack on ESG investing in 401(k) plans.
But it won’t be the last.
Functionally, O’Connor’s decision says that investing with ESG issues in mind is a breach of a fund manager’s duties, regardless of whether there is a financial loss. The mere smell of a vague awareness of the planet is too much to bear.
To be clear, this lawsuit likely wasn’t necessary to cripple ESG investing. With Donald Trump’s return to the White House imminent, much has already been done.
Banks and fund managers have been getaway Net Zero Asset Manager (NZAM). In this initiative, they originally committed to supporting net-zero greenhouse gas emissions by 2050. BlackRock was one of the last companies to leave. NZAM has since stopped We are suspending all activity and removing the names of all companies that signed up to this plan from our website, even the commitment letter itself.
Secretary of Labor Eugene Scalia during the first Trump administration pushed This is a rule that prohibits plan advisors from considering ESG issues. The Biden administration overturned the rule in 2022, but it is certain to be reversed during President Trump’s second term.
The same goes for ESG and the same goes for DEI.
Large companies Already throwing Even before Trump’s 2024 victory, diversity, equity, and inclusion initiatives were in place, in part Relentless homophobia. The efforts of former music video director turned conservative Robbie Starbuck.
small companies under siege These are the words of Trump Deputy Director of Policy Stephen Miller. America First Act They love threatening to sue companies that have the temerity to do things like provide affordable subsidies to black-owned small businesses.
As of 2025, McDonald’s is rushing to roll back some of its DEI practices. proverb It’s conducting a “civil rights audit,” whatever that means. But the payoff for the most disastrous yet entirely predictable retreat from DEI is certainly this: mark zuckerbergThe desire to fool Trump has led him to reject DEI efforts that don’t harm anyone and just make the right cry. Zuckerberg’s Meta provided tampons in women’s and men’s restrooms, making them accessible to anyone who needed them. but not anymore.
Conservatives are treating the elimination of ESG and DEI efforts as if the government will finally turn its back on them and allow companies to finally reach their true potential. But these kinds of actions, promising net-zero emissions and ensuring diversity and equity in the workforce, were not the scary socialist ideas of Barack Obama, Joe Biden, and Nancy Pelosi. Rather, it is a step taken by companies to make themselves more attractive within the capitalist free market system.
But conservatives no longer care about free markets.woke up capitalism.” With Trump in office, they will use a heavy hand in government to reward only those companies that share Trump’s climate denial, white supremacist, and anti-trans views.
If any corporation is foolish enough to consider stewardship of the planet or the dignity of transgender employees, O’Connor and other Federalist Society-favored judges will likely stand in their way. So much for “freedom.”
