Oklahoma State Treasurer Applauds Major Win for Fiduciary Responsibility and Economic Integrity

The U.S. District Court decision involving American Airlines and BlackRock delivers a resounding validation of Oklahoma’s efforts to protect financial integrity and prioritize fiduciary responsibility. This ruling highlights how ESG policies, when prioritized over financial returns, constitute a breach of fiduciary duty—a concern Oklahoma has raised for years through the Energy Discrimination Elimination Act and the Restricted Financial Company List.

“The legislature saw the writing on the wall—this breach of duty—and took action,” said State Treasurer Todd Russ. “I picked up the mantle and made it clear: Oklahoma’s tax dollars and pension funds will not support companies undermining their fiduciary responsibilities. This court decision confirms what we’ve said all along—it’s dangerous, it’s a breach, and it’s exactly what we’ve been fighting against.”

The judge in the U.S. District Court case, Spence v. American Airlines, specifically noted that considering Environmental, Social, and Governance (ESG) factors in fiduciary decisions was central to the breach of duty under ERISA. The court found that:

  • American Airlines’ Employee Benefit Committee (EBC) allowed ESG considerations—particularly BlackRock’s ESG-driven proxy voting and activism—to influence decisions about the 401(k) plan.
  • This focus on ESG goals came at the expense of maximizing financial returns for the plan’s participants, violating the fiduciary duty of loyalty.
  • The court stated that considering ESG factors improperly shifted the focus from financial performance to socio-political outcomes, which is not permissible under fiduciary law.

In its opinion, the court highlighted BlackRock’s blind commitment to ESG initiatives and noted that this activism conflicted with the financial interests of plan participants, citing proxy votes and shareholder proposals at major energy companies as examples.

“As Treasurer, my job is to ensure our funds are managed responsibly and with one goal in mind—ethically delivering returns for Oklahomans,” added Russ. “This ruling reinforces what I’ve said from the start: ESG activism has no place in managing state funds. It’s short-sighted, it’s reckless, and it’s a violation of trust.”

Oklahoma remains steadfast in holding financial firms to the highest standards of fiduciary responsibility, ensuring that state investments protect the jobs, pensions, and economic health of Oklahomans.

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