This Big Financial Firm’s “Blacklist” Is Putting Israel At Risk

( According to an independent examination carried out by a Washington, D.C. think-tank, a well-known financial services firm encourages divesting from businesses that assist the Israeli government defeat Palestinian suicide bombers.
A new analysis from the Foundation for Defense of Democracies (FDD) accuses Morningstar Inc. of downgrading businesses that assist Israel in fighting terrorism, including those who work on the nation’s security barrier to prevent Palestinian suicide bombers from assaulting cities. The ratings issued by Morningstar and other comparable research organizations serve as the primary information source for investors and significantly affect how a business is valued.

The Boycott, Divestment, and Sanctions (BDS) movement engage in economic warfare against Israel. It is primarily supported by Morningstar’s practices, according to the author of the FDD report, who claimed that Morningstar’s actions could force states with anti-BDS laws to sever ties with Morningstar.

Reports show Morningstar acquired Sustainalytics, a company that conducts research and ranks businesses according to their social ideals. Following Morningstar’s acquisition of Sustainalytics, watchdog organizations like NGO Monitor and JLens accused the company of enabling its research arm to utilize evaluations on firms doing business with Israel to further the BDS campaign.

Morningstar stated in March 2021 that it wasn’t unfairly punishing businesses that do business with Israel in the face of complaints from its shareholders. White & Case was retained by the company to look into Sustainalytics’ business operations due to probes into its behavior. Their report found that Morningstar’s Sustainalytics products neither promote nor urge divestiture. Morningstar hailed it as evidence that it did not discriminate against the Jewish state.

White & Case found a large amount of material regarding how Sustainalytics creates ratings that would be detrimental to Israel but concluded that there was no proof of institutional prejudice.

According to reports, outside experts disagree. Follow-up research released by the Foundation for Defense of Democracies, Sustainalytics consistently uses biased methodologies to look into and penalize companies doing business with Israel and its security industry. According to FDD’s study, there is evidence in the White & Case report that their ratings support BDS and are driven by a quantitative bias against Israel.

According to the White & Case study, Sustainalytics personnel confessed that their clients use these evaluations as a de facto “do not invest list.” This is seen by experts as proof that Sustainalytics intentionally downgrades some firms to encourage divestment from Israel.

Maybe it’s time businesses dump companies such as Morningstar Inc. and research investments on their own.