Morningstar ESG subsidiary investigated for anti-Israel bias, Morningstar agrees to 43 recommendations from an independent counsel

In 2020 Morningstar bought an ESG firm (Sustainalytics) which had a product that included risk assessments for companies investing in disputed territories. The product was built on a bespoke product for a church active in BDS (unspecified but presumedly the Presbyterians).

JLens, a Jewish investing group asked to talk to Morningstar about their concerns around Sustainalytics. Morningstar publicly denied biased (but internally took steps such as removing Electronic Intifada as a source for the conflict).

JLens then escalated the issue with the Illinois Investment Policy Board which cannot invest in companies that supports BDS. Morningstar agreed to take an independent consul to investigate its policies. The consul came up with 43 recommendations including the removal of the Israel reports.

Some interesting tidbits in the report. For instance, no activism was stressed heavily in the hiring policy of Sustainalytics. Sustainalytics also seems like a huge firm, 1k employees on LinkedIn

(1) JLens original post on Morningstar's BDS support (2) JLens followup after initial engagement with Morningstar (3) JLens victory blog post (4) Morningstar blogpost (5) Independent consul report (6) IIPB minutes (7) JLens stockholder letter (3)