Finally, powerful state officials are flexing their muscles to combat rising anti-Semitism.
A group of 18 treasurers, including from large states like Florida, Ohio and North Carolina, is pushing back against financial-services firm Morningstar for using its power to advance the anti-Israel cause. The financial officers join attorneys general colleagues, who are probing whether the company’s insidious actions break the law.
The issue: Morningstar is foisting an anti-Semitic Boycott, Divestment, Sanctions agenda onto its many clients, the latest example of a firm beholden to the hard-left environmental, social, governance movement (ESG). BDS adherents want to damage Israel under false claims it oppresses Arab Palestinians.
That movement is just one tentacle of the much-bigger ESG craze infecting ever more sectors, from academia to credit-rating agencies. The environmental-social-governance campaign, which seeks to defund companies the left doesn’t like, often expresses its hostility toward fossil fuels keeping oil, gas and home-heating costs affordable for poor and middle-class families. In this instance, Morningstar is embracing a very trendy ESG fad: attacking Jewish people through BDS.
Morningstar is a multibillion-dollar investment-research and investment-management firm operating in 29 countries. And it’s decided to attack Israel, our only democratic ally in the Middle East.
In a letter, organized by the State Financial Officers Foundation and first provided to The Post, the treasurers — who manage trillions of dollars in state assets and retirement funds — express their “serious concern” that Morningstar, through its subsidiary Sustainalytics, negatively rates firms connected with Israel. Sustainalytics is doing this to satisfy BDS activists.
The Boycott, Divestment, Sanctions movement — and its acolytes, including Morningstar, some universities, various pension funds and even leaders of some Christian denominations (who should know better!) — undermines global peace, ignoring that Israel faces permanent, existential threats from despotic regimes with no respect for human rights. Its ascendancy coincides with the horrific rise of violent anti-Semitism across the globe.
In their letter, the treasurers note that companies, investors and asset managers — including those contracted with their states — rely upon Morningstar and other firms for unbiased financial research. Unfortunately, the days of unbiased research are long gone.
The officials cite the financial giant’s March 2021 and June 2022 corporate statements, a White & Case independent review and a recent letter dozens of national and regional Jewish organizations sent to Morningstar expressing their skepticism of the firm’s ESG research and ratings.
Morningstar products offered by its Sustainalytics subsidiary “are deeply infused with anti-Israel bias. Specifically, Sustainalytics relies on anti-Israel sources and automatically punishes any company involved in the Israeli economy in its ratings system. Morningstar’s continued statements to the contrary, including a recent letter published in the Wall Street Journal, appear intentionally misleading,” the treasurers write.
“As state financial officers, we have a fiduciary duty to ensure that the financial research our respective states rely upon is based on sound financial principles rather than BDS movement tactics meant to isolate Israel in the world economy and breed prejudice against the Jewish people.”
In some cases, state law prohibits state funds from being used to fuel anti-Israel BDS goals, which makes the treasurers potential lawbreakers if they continue to support Morningstar products. It’s shameful that Morningstar forces their hand in this way.
“Many of our states have investments in Israel, and we view Sustainalytics’ practices [as] a direct attack on those investments,” the treasurers continue. “As Americans who strongly support Israel — a close democratic ally of the United States — we are also deeply disturbed by a corporate culture at Morningstar that would allow researchers to rely on sources aligned with the anti-Semitic BDS movement.”
They offer a simple solution: immediately “terminate all research and ratings products that treat Israel-connected companies differently than companies operating in other free democracies.”
The irony of the self-righteous, politically ignorant BDS crowd is that it directly harms intended beneficiaries. Because the Palestinian territories’ economy is so intertwined with that of Israel, pro-BDS folks intent on taking down companies operating in the Jewish state often end up hurting rather than helping Palestinians.
“Leaders at the state level are stepping up to defend the American people against the scourge of ESG policies that are forcing corporations to go woke while simultaneously driving up the costs of common goods and putting retirements and college-savings plans at risk,” State Financial Officers Foundation CEO Derek Kreifels told The Post. “State financial officers and attorneys general alike will continue to use their platform to call out ESG for exactly what it is — a progressive vehicle used to drive an agenda that is out of touch with a majority of hardworking Americans.”
Bravo to these treasurers taking it on.
Carrie Sheffield is a senior policy analyst at Independent Women’s Voice and a fellow at State Financial Officers Foundation.