On Friday, a federal judge in Texas ruled that American Airlines breached its fiduciary duty, under the Employee Retirement Income Security Act, by basing investment decisions for its $26 billion employee retirement plan on environmental, social, and other non-financial factors and not in the “best financial benefit” of retirement plan participants, in the biggest victory yet questioning ESG investing.

US District Judge Reed O’Connor said American Airlines had breached its legal duty to make investment decisions based solely on the financial interests of 401(k) plan beneficiaries by allowing BlackRock, its asset manager and a major shareholder, to focus on environmental, social and corporate governance (ESG) factors. The plaintiffs “proved by a preponderance of the evidence” that American acted “with an intent to benefit a party other than Plan participants,” Judge O’Connor wrote.