Jewish Groups Demand Action From Morningstar Following Anti-Israel Bias Accusations

By Mike Wagenheim

The Morningstar logo

(JNS) A wide swath of Jewish and pro-Israel organizations sent a letter to Morningstar executive chairman Joseph Mansueto and CEO Kunal Kapoor last week, urging the Chicago-based financial-services company to implement steps to root out anti-Israel bias at one of its subsidiaries.

Signatories to the July 15 letter include the Anti-Defamation League; American Jewish Committee; Combat Antisemitism Movement; Conference of Presidents of Major American Jewish Organizations; Christians United for Israel (CUFI); Hadassah: The Women’s Zionist Organization of America; Jewish Funders Network; JLens; the Louis D. Brandeis Center for Human Rights Under Law; and the Jewish Federations of North America.

The letter follows the release of a May report from White & Case, a law firm hired by Morningstar to investigate claims that the Sustainalytics’ Human Rights Radar risk ratings had anti-Israel bias and was signaling out Israel over human-rights abuses while neglecting serious abuses in other countries.

It also comes just weeks after the Illinois Investment Policy Board, which can put businesses who sanction BDS on a list of those who cannot do business with the state, closed an investigation in Morningstar citing its “openness and transparency on the issue.”

As part of its findings, White & Case laid out some 40 recommendations that Morningstar has committed to following to address the findings, including cutting ties with the vendor behind its now-discarded Human Rights Radar.

‘We know how this ends’

However, Jewish and pro-Israel groups would like to see Morningstar take even more steps to ensure this does not happen again, including training, updating methodology, consulting with experts on language and updating its categorization methods.

“While we commend you for pledging to terminate Sustainalytics’ Human Rights Radar product, ending the bespoke research that White & Case flags as likely to produce biased results, and transparently implementing some of the other recommendations, the report makes clear that built-in bias against Israel infects Sustainalytics’ methodology and sources, and thus, its other ESG [environmental, social, and governance] ratings’ products,” said their letter.

“This bias is not only unfair and harmful to Israeli companies and those doing business in and with Israel, but such bias also threatens to tarnish the ESG ratings framework itself,” it continued.

“We know how this ends,” said Ari Morgenstern, senior director of policy and communications for CUFI. “We’ll contend with this with the same vigor as we did with Airbnb and Unilever,” referring to two companies accused of engaging in anti-Israel boycott activity, only to reverse course later.

“Morningstar hasn’t rooted out the effort to bring BDS through the backdoor of ESG,” he said.

Elana Broitman, senior vice president for public affairs at the Jewish Federations of North America, told JNS that Morningstar was given a heads up before the letter’s release and agreed to open a dialogue with the signatories soon.

“After we took our time to do some real analysis, we feel much more needs to be done, and we wanted to put this into very clear guidelines that are representative of our community,” she said, emphasizing that the overall goal “isn’t just to fix Morningstar’s issues, but to set a standard for the entire ESG industry.”

“It’s not any one company,” stated Broitman. “We can help set up the right processes, the right methodology, the right systems for any ESG company so that Israel is treated even-handedly.”

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Preceding provided by JNS.org