Morningstar Financial Services Firm Urged to Take Action to Ensure All Products Are Free of Anti-Israel Bias
A joint letter issued last week by ten national Jewish and pro-Israel organizations, as well as nearly 80 local Jewish Federations, called on the Chicago-based Morningstar financial services firm to take action to ensure all its products are free of anti-Israel bias.
After the conclusion in June of an independent investigation conducted by White & Case (W&C) LLP, Morningstar acknowledged that its Sustainalytics Human Rights Radar exhibited bias about the Israeli-Palestinian conflict and discontinued the product. Morningstar also reiterated its opposition to the anti-Israel Boycott, Divestment, and Sanctions (BDS) movement.
The joint letter published last Friday — signed by the Combat Antisemitism Movement (CAM), Jewish Federations of North America, American Jewish Committee, Anti-Defamation League, Conference of Presidents of Major Jewish Organizations, Christians United for Israel, Hadassah, Jewish Funders Network, JLens, and The Louis D. Brandeis Center for Human Rights Under Law — was addressed to Morningstar Executive Chairman Joseph Mansueto and Chief Executive Officer Kunal Kapoor.
It noted, “While we commend you for pledging to terminate Sustainalytics’ Human Rights Radar product, ending the bespoke research that W&C 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.”
“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,” the letter added.
It went on to offer five recommended steps for Morningstar to take to “comprehensively address and eliminate anti-Israel bias in all Sustainalytics’ products and practices,” including:
– Engage with persons with deep knowledge of Israeli and Jewish history and politics (such as the signatories to this letter who understand efforts to undermine Israel) to examine and eliminate sources with a history of anti-Israel activities and/or those that have been denounced by the U.S. Government and other credible stakeholders.
– Rather than undertaking only smaller process changes, address the inherent flaws in the existing methodology of reputational reporting on Israel that produces the structural bias.
– Seek the assistance of experts, such as the signatories to this letter, in removing inappropriate language about Israel.
– Establish systems and implement trainings to ensure Sustainalytics officers and employees are better educated on the issues and able to identify and avoid anti-Israel bias in sources and terminology.
– Avoid overly broad categorization of business activities that indiscriminately capture and brand run-of-the-mill companies as controversial.
The joint letter can be read in full here.