Morningstar acquires Sustainalytics, known for their anti-Israel bias
Within Sustainalytics' analyses, companies who operate in Israel are tagged with higher negative controversy ratings.
By ZACHARY KEYSERA WORKER places stickers on wine bottles while packaging them for export at Shiloh Wineries, north of Ramallah(photo credit: REUTERS)
Morningstar, a US-based global financial firm, recently acquired a full ownership stake in Sustainalytics, a Netherlands-based investment research firm, who in the past have voiced anti-Israel bias' within their research findings.The anti-Israel bias was confirmed by JLens, an investor network that focuses on Jewish investments, who carried out a review of five investment firms, coming to the conclusion that Sustainalytics holds the most bias against the Jewish state out of all the other four firms.Within Sustainalytics' analyses companies that operate in Israel are tagged with higher negative controversy ratings, moreso than other companies based in conflicted areas like China or Tibet. Meaning instead of valuing a company by the numbers based on the supply chain, profit margins or overall growth and success, the algorithm for the firm's ratings take into account politicial factors, in this case siding with the Palestinian cause.The firm used to be partly owned by PGGM, the Dutch pension that touted its own divestment from Israeli banks in 2014. Sustainalytics profits from the sale of an Occupied Territories Involvement Report. The report gives companies with involvement in the West Bank, Gaza and the Golan Heights a “controversy” score.Additionally, the Boycott Divestment and Sanction (BDS) movement, is mentioned and sourced within the "analyst commentary" without any counter points introduced, which inadvertently legitimizes the cause. Many of their scores for Israeli companies are also heavily based on the large blacklist of companies based in Israel, disseminated directly by the United Nations Human Rights Council (UNHRC).The so-called blacklist targets companies that do business in the West Bank, east Jerusalem and the Golan Heights. It includes 112 companies with the aim of letting the world know who it is that works in Israel’s alleged “occupied territories.”Since the council’s inception in 2006, it has issued 62 resolutions against Israel, more than any other country around the globe - including habitual human rights offenders, such as Iran, China and Syria, among others.It is unclear if Morningstar is aware of the biases within the Sustainalytics algorithm or findings, however, Morningstar has owned 40% of the company since 2017."Modern investors in public and private markets are demanding ESG data, research, ratings, and solutions in order to make informed, meaningful investing decisions," said Morningstar Chief Executive Officer Kunal Kapoor - however, if the anti-Israel bias is left unchecked Morningstar could inadvertently mislead investors and contribute to the BDS movement in the process.Julie Hammerman and Jpost Editorial contributed to this report.