EXCLUSIVE: GOP-led states EXPAND investigation into financial investment firm Morningstar for anti-Israel bias as they focus on taking down ESG activists
Three Republican Party-led states are stepping up their investigations into financial services firm Morningstar over alleged anti-Israel bias.
Morningstar engaged in “deception, fraud, false promises, misrepresentations, unfair practices and/or concealment, suppression or omission of material facts,” the attorneys general of Alabama, Kentucky and Montana say.
Specifically, they accuse the company of issuing “unfavorable controversy ratings” to six Israeli companies doing business in the West Bank.
‘ESG scores are heralded to consumers as a carefully curated set of objective criteria used to inform profitable investing, but what we have seen is that these scores are simply an ideologically driven tool used to mislead consumers and harm companies even a certain degree of adherence to traditional American values, including support of Israel,” Alabama Attorney General Steve Marshall told DailyMail.com.
“My colleagues and I will continue to use the tools available to demand transparency for consumers when it comes to ESG investing.”
Last year, for the first time, 19 states launched an investigation into Morningstar over its controversial environmental, social and governance (ESG) practices, including anti-Israel bias in its investment ratings system.
“My colleagues and I will continue to use the tools available to demand transparency for consumers when it comes to ESG investing,” said Alabama Attorney General Steve Marshall.
Kentucky Attorney General Daniel Cameron is one of the leaders leading the investigation into Morningstar
The company is accused of violating the anti-boycott, divestment and sanctions (BDS) laws. The BDS movement calls for boycotting companies and institutions that support Israel by encouraging banks not to invest there.
However, a spokesperson for Morningstar told DailyMail.com that it does not support the BDS movement and has had “substantial and productive” meetings with organizations concerned that their ESG research “reflected biases.”
“Today, our research is even stronger and more consistent for the investors we serve. Among the changes we have made, we have improved our approach to using sources, clarified the human rights guidelines that underpin aspects of our research, unified the oversight of our methodologies, and improved the language we use.”
The spokesperson continued to say that they have received the questions from the Republican Party-led states and that the company will “address any investigation through the appropriate procedural mechanisms.”
The companies that the AGs say received an unfavorable controversy rating included: B Communications, Bezeq, Construcciones y Auxiliar de Ferrocarriles, Elbit Systems, Elco, Electra and Shapir Engineering and Industry.
The attorneys general are demanding documents and internal communications to find out why Morningstar gave them a poor rating.
The company is facing action from other states over its practices.
In July, Governor Ron DeSantis announced that his state of Florida would open an investigation into Morningstar for anti-Israel bias.
“They are specifically targeting Israel,” the governor and 2024 presidential candidate said of the company. ‘It is a shame.’
The governor received a standing ovation from the Christian United for Israel (CUFI) crowd following the conclusion of his remarks pledging continued support for Israel.
He told DailyMail.com at the time of his speech that, if elected, he will rip President Biden’s “appalling” treatment of Israel – and slams progressive Democrats for trying to scapegoat the world’s only Jewish state.
In July, Governor Ron DeSantis announced that his state of Florida would open an investigation into Morningstar for anti-Israel bias.
Morningstar was formally notified of the expanded GOP-led investigation late last month.
The move was praised by consumer advocacy groups.
Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies, said the investigation uncovered evidence suggesting Morningstar “disguised” an Israeli boycott as ESG ratings.
“Those who want financial institutions to turn away from political agendas like those of Morningstar and other ESG activists must continue to call out this type of insidious behavior,” said Will Hild, executive director of Consumer’s Research.