Three GOP-led states are ramping up their probe into financial services firm Morningstar over alleged anti-Israel bias.
Morningstar used ̵6;deception, fraud, false promises, misrepresentations, unfair practices, and/or the concealment, suppression, or omission of material facts,’ the state attorneys general of Alabama, Kentucky and Montana say.
Specifically, they accuse the company of issuing ‘unfavorable controversy ratings’ for six Israeli companies that do business in the West Bank.
‘ESG scores are heralded to consumers as a carefully-crafted set of objective criteria used to inform profitable investing, but what we’ve seen is that these scores are simply an ideologically-driven tool used to deceive consumers and harm companies that display even a modicum of adherence to traditional American values, including the support of Israel,’ Alabama Attorney General Steve Marshall told DailyMail.com.
‘My colleagues and I will continue to use the tools available to us to demand transparency for consumers when it comes to ESG investing.’
Last year, 19 states first launched an investigation into Morningstar for its controversial environmental, social and governance (ESG) practices, including anti-Israel bias in its investment rating system.
‘My colleagues and I will continue to use the tools available to us 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 anti-Boycott, Divestment, and Sanctions (BDS) laws. The BDS movement pushes to boycott companies and institutions that support Israel by encouraging banks not to invest there.
However, a Morningstar spokesperson told DailyMail.com that it does not support the BDS movement and has had ‘substantive and productive’ meetings with organizations concerned that its ESG research ‘reflected biases.’
‘Our research today is even stronger and more consistent for the investors we serve. Among the changes we’ve made, we have enhanced our approach to using sources, clarified the human rights guidance that underpins aspects of our research, unified oversight of our methodologies, and improved the language we use.’
The spokesperson continued to say they have received the inquiries from the GOP-led states and the company ‘will address each inquiry through the appropriate procedural mechanisms.’
The companies that the AGs say were assigned unfavorable controversy ratings 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 get to the bottom of why Morningstar gave them a bad rating.
The firm is facing action from additional states over its practices.
‘They’re specifically targeting Israel,’ the governor and 2024 presidential hopeful said about the company. ‘It is disgraceful.’
The governor received a standing ovation from the Christian United for Israel (CUFI) crowd following the conclusion of his remarks during which he pledged continued support for Israel.
He told DailyMail.com at the time of his speech that if elected, he will tear up President Biden’s ‘horrendous’ treatment of Israel – and slammed progressive Democrats for trying to ‘scapegoat’ the world’s only Jewish state.
In July, Gov. Ron DeSantis announced that his state of Florida was opening an investigation into Morningstar for anti-Israel bias
Morningstar was formally notified about the expanded GOP-led investigation at the end of last month.
The action has been praised by consumers advocacy groups.
Richard Goldberg, senior adviser at the Foundation for Defense of Democracies, said the investigation has uncovered evidence suggesting Morningstar was ‘disguising’ an Israel boycott as ESG ratings.
‘Those who wish to see financial institutions turn away from the political agendas like those driven by Morningstar and other ESG activists, must continue to call out this type of insidious behavior,’ said Consumer’s Research Executive Director Will Hild.