PHOENIX — Arizona Attorney General Mark Brnovich joined a 17-state coalition in sending a letter to a major financial firm about reports that one of its subsidiaries may be taking actions that have the effect of furthering the boycott, divestment, and sanctions (BDS) movement against Israel in its environmental, social, and governance (ESG) push.
Sustainalytics, Morningstar Inc.’s wholly owned subsidiary, is a ratings and research firm that publishes its findings through a system of risk ratings. Those ratings influence the investment decisions of government agencies and financial managers. Rather than focusing on investment returns and other traditional financial indicators, Sustainalytics grades companies on their purported ESG performance.
“The BDS movement is filled with hateful propaganda and antisemitism that must be confronted wherever it is detected,” said Attorney General Mark Brnovich. “Organized economic initiatives to undermine America’s strongest ally in the Middle East are unlawful and devoid of merit or virtue.”
According to the letter, “The BDS movement is an anti-Semitic campaign to intimidate the Jewish people and delegitimize the State of Israel. The movement advances these aims through academic, cultural, and economic initiatives that punish people and firms for doing business with Israel.” The attorneys general point out, “In March 2021, Morningstar conducted an internal review to determine whether the company’s practices furthered the BDS movement. In Morningstar’s own words, that review ‘was overly dismissive of the serious bias concerns raised.’ So the company hired the law firm of White & Case to conduct a more thorough investigation. Their investigation revealed a number of alarming issues.”
The coalition asks Morningstar to respond to its questions about Sustainalytics’ actions by August 31.
Joining General Brnovich are the attorneys general from West Virginia, Kentucky, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah and Virginia.
Read the letter here.