Morningstar, an investment research firm known for providing financial and investment analysis, is under investigation from the Florida financial office after allegations surfaced that Morningstar promotes Anti-Israel boycotts. This action can result in Florida cutting ties with the company as a new Florida law bars doing business with any company involved in an economic boycott of the Jewish state.
Florida’s chief financial officer, Jimmy Patronis, confirmed this investigation to The Washington Free Beacon, stating that
We’ve asked the State Board of Administration to engage Morningstar to assess why the company appears to be blacklisting companies associated with Israel, The Company already has a troubling history. If they’re discriminating against Israel, Florida law is clear, and we have no choice but to explore divestment actions against the firm.
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Morningstar’s blacklist generally discourages investors from funding Israel-linked companies, which some say bolsters the anti-Semitic Boycott, Divestment, and Sanctions (BDS) movement as it seeks to isolate the Jewish state economically.
These allegations come less than a month after Florida Governor Ron DeSantis signed a law that takes action against companies that promote BDS or boycott Israel.
The law requires:
[T]he public fund[S] to notify companies it places on the Scrutinized Companies that Boycott Israel List that they may be subject to divestment; providing a timeframe for the public fund’s divestment from companies that boycott Israel, and processes for the companies’ reintroduction on the Scrutinized Companies that Boycott Israel List in certain circumstances; authorizing the public fund to cease its divestment from or to reinvest in certain scrutinized companies,
The bill also goes and defines what a company that boycotts Israel is, saying that:
The term includes taking adverse action, including changes to published commercial financial ratings, risk ratings, and controversy ratings based on nonpecuniary factors, to inflict economic harm on Israel or persons or entities doing business in Israel or in Israeli-controlled territories. The term includes trade practices that are prohibited by federal regulations issued in compliance with 50 U.S.C. s. 4842 and does not include trade practices that are preempted by federal law,
Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies, commented on the matter, saying
The Morningstar BDS blacklist of 26 Israel-based companies clearly falls under Florida law’s definition of an Israel boycott, Having personally reviewed the controversy and watchlist reports, I have zero doubt Morningstar is engaged in economic warfare against Israel.
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One of Morningstar’s subsidiaries, Sustainalytics, has dealt with criticism from pro-Israel groups since the subsidiary has blacklisted many companies that work with Israel to stop terrorism. Some of these companies include Motorola Solutions and Elbit Systems, which provide surveillance technology that helps the Jewish state combat terrorism. The same subsidiary has also been caught relying on data from Anti-Israel groups.
After pressure from the same groups that discovered the controversy around Sustainalytics, Morningstar said it would implement a series of changes to its rating system meant to eradicate anti-Israel bias. But critics say the company is still unfairly targeting the Jewish state, even after it altered many of Sustainalytics’s most controversial practices.
Morningstar vehemently denies supporting the BDS movement and worked alongside pro-Israel groups to alter its rating process, specifically on its ESG guidelines.
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