Missouri Attorney General Eric Schmitt launched an investigation into Morningstar Inc. and its subsidiary Sustainalytics Inc. over the company’s evaluation of environmental, social and governance issues.
The investigation aims to determine whether the investment information and services company violated a consumer protection law or a separate law intended to prevent the state making contracts with companies that boycott goods or services from Israel.
“Following public reports into Morningstar’s alleged anti-Israel bias and concerns raised to my Office, we are launching an investigation into Morningstar Inc. and Sustainalytics over potential consumer fraud issues,” Schmitt said in an emailed statement. “Missouri has been a leader in pushing back against woke ESG investing, and my Office will continue to look out for consumers.”
Morningstar confirmed receipt of the Civil Investigative Demand issued by Schmitt and said it does not support the anti-Israel boycott, divestment and sanctions campaign.
“Sustainability introduces new choices for investors; Morningstar provides the data and insights to help investors of all types weigh those choices in their decision making,” Morningstar CEO Kunal Kapoor said in a statement. “We conduct independent research with a level of transparency that makes us proud.”
In June, law firm White & Case concluded an independent investigation into allegations of anti-Israel bias in Sustainalytics services and products. The investigation found that there was no evidence Sustainalytics products encouraged or recommended divestment from Israel, or of “pervasive or systemic bias” against Israel across Sustainalytics products, including the subsidiary’s ESG rating. One product that the firm found to exhibit bias, Human Rights Radar, has since been discontinued.
[More: Champions, critics drive ESG debate, disclosures]
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