Morningstar is a US public company headquartered in Chicago that sells investment research and oversees $215 billion in assets. In 2020, Morningstar acquired Sustainalytics, a Dutch company that sells ESG (Environment, Social, Governance) research to support socially responsible investing. In 2019, Sustainalytics acquired GES International, a Swedish company that conducts investor advocacy and engagement on behalf of institutional investors. Sustainalytics and GES International are two of the most sophisticated enablers of the anti-Israel BDS (Boycott, Divestment, Sanction) campaign in the global investment field, based on JLens’ findings. Morningstar claims to provide independent and objective research to investors. However, JLens’ analysis concluded Morningstar’s products and services, following the incorporation of Sustainalytics and GES, now actively support the BDS campaign’s economic warfare tactics against Israel:
Morningstar’s Engagement Services pressure BDS-targeted global companies with business ties to Israel to divest Israeli operations or cease sales to Israeli entities.
Morningstar’s Controversy Reports support the BDS campaign by elevating the controversy rating of BDS-targeted companies, which in turn raises those companies’ overall ESG Risk ratings. Raising the ESG Risk rating of a BDS-targeted company precludes investment by many socially responsible investors and funds that rely on Morningstar data for investment decisions.
Morningstar’s ESG Risk Ratings incorporate BDS blacklists and use politicized anti-Israel language in the report commentary.
Morningstar’s Human Rights Radar Report narrowly focuses on three disputed territories “Palestine, Western Sahara and Tibet,” as determined by client demand, while ignoring over 100 other disputed territories globally.
Morningstar’s Global Standards Screening enables institutional investors to divest from BDS-targeted companies.
As a result of JLens’ analysis, Morningstar has been placed on JLens’ Do Not Invest list. The list includes companies in sectors that are antithetical to Jewish social and environmental values, as well as companies that demonstrate unacceptable behavior from a Jewish communal perspective, such as support for the BDS campaign. A company with unacceptable behavior will only be added to JLens’ Do Not Invest list when advocacy efforts, including written communication and direct dialogue, have failed to produce positive change. JLens’ Jewish Advocacy Strategy, an investment strategy with over $100 million in assets established by Jewish institutional investors, will not own shares of Morningstar (ticker: MORN) until such time as JLens can determine the company no longer engages in nor profits from economic warfare activities against Israel. JLens does not offer an opinion as to whether the business activities of Morningstar are in violation of US anti-BDS laws. JLens has submitted a shareholder proposal for Morningstar’s annual meeting in May 2021 requesting the board prepare a report for investors on the risks associated with the economic activism against Israel in Morningstar’s business lines. Morningstar’s 2019 Annual Report states, “When it comes to investing, ESG is not political, it is practical.” Hopefully Morningstar’s board will heed their own guidance and ensure that discriminatory politically biased agendas have no place in Morningstar’s services going forward.