Eighteen AGs investigate Morningstar’s ESG insurance policies, allegations of anti-Israel bias • The Georgia Virtue

(The Center Square) – Morningstar Inc. and its subsidiary Sustainalytics are being investigated by 18 Attorneys General for alleged consumer fraud or unfair trading practices.

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Republican Attorney General Eric Schmitt announced that he is leading the investigation into the company’s environmental, social and governance (ESG) investment ratings. Schmitt, who is running against Democrat Trudy Busch Valentine for the seat of outgoing Republican Senator Roy Blunt, announced Wednesday that he filed civil investigation requests with Morningstar and Sustainalytics in late July. It included more than 40 document questionnaires. Sustainalytics’ “human rights radar” has been highlighted as worrisome, along with documents related to the investigation by law firm White & Case and the Illinois Investment Policy Board.

“These ESG investment firms are playing politics with pensions and people’s livelihoods,” Schmitt said in a statement announcing the research. “Missouri has been a leader in fighting back against awakened ESG investing, and our fight will continue.”

Schmitt asked Morningstar to provide all documents and notices to customers trying to dissuade them from doing business in and/or with Israel. Documents and communications have also been requested between each manager and any person or entity relating to business conducted in, with or in relation to the State of Israel, Israeli/Palestinian conflict zones and/or Boycott, Divestment and Sanctions (BDS). will.

“Virginia’s consumer protection laws protect Virginians from companies that don’t like to abide by the rules,” Virginia Attorney General Jason Miyares said in a statement. “Virginia has joined the investigations into Morningstar and Sustainalytics in response to credible allegations that they violated our consumer protection laws by allowing anti-Israel bias to infect the ESG ratings they have provided to investors. “

in a (n open letter released in June, Morningstar executive chairman Joe Mansueto and chief executive officer Kunal Kapoor reiterated their stance against an anti-Israel BDS campaign.

“In retrospect, however, our initial review was overly dismissive of the serious bias concerns raised by the organization JLens, the Illinois Investment Policy Board (IIPB) and other organizations,” the letter reads. “We find bias in any form unacceptable and have concluded that the concerns warrant a thorough, independent review.”

Morningstar hired White & Case, an independent law firm, to conduct an investigation. More than 40 employees and external parties were interviewed and 140,000 Sustainalytics documents, client-facing reports and other materials were reviewed. The result 117-page report identified “limited areas of bias that represent outliers throughout our work, but still do not meet Morningstar’s standards.”

Three states are not allowed to disclose participation due to confidentiality laws or other state guidelines. Besides Missouri, the other 14 are Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah and Virginia.

By Joe Mueller | The middle square