In a time in which there has been a dizzying array of setbacks when it comes to fighting those who pursue hatred of Jews and Israel, it is good to see a well-fought victory. Morningstar, a Chicago-based multibillion-dollar investment research firm that recommends companies based on a wide variety of indexing tools, told investors it dropped a tool called Human Rights Radar after an independent review found that it routinely exhibited bias against Israel. Human Rights Radar has three employees and is part of a trendy subset of ratings called ESG, which considers environmental, social and governance factors when it recommends companies or regions for investment.
The law firm White & Case investigated allegations that Human Rights Radar steered investors away from Israel by improperly inflating the country’s risk and controversy ratings. The report, which was released last Thursday, concluded that companies’ ties to Israel were noted more frequently in Human Rights Radar compared with other places where companies could be exposed to human rights concerns, such as Saudi Arabia or Tibet. It also concluded that inflammatory language was sometimes used to describe Israeli companies, and failed to provide sourcing attribution clearly and consistently. Morningstar pledges to make their products more transparent in the future.
Complaints about Morningstar’s ratings index were first raised by JLens, which advocates for Israel in the investing world, and in the book “Conspiracy U: A Case Study,” by Scott Shay of Signature Bank. An essay based on Shay’s book, called “A Smear by Any Name,” which specifically addressed the Morningstar controversy, appeared in The Jewish Link on November 4, 2021. The nature of the complaints was that Human Rights Radar’s biased ratings amounted to an antisemitic boycott of Israel. JLens further accused Morningstar of supporting the Boycott, Divestment and Sanctions (BDS) movement.
Morningstar said its independent report did not reach the level of BDS, but that the tool was flawed, and that they had been overly dismissive of complaints by Jewish groups. It pledged to be more transparent in the future.
“Due to the efforts of a dedicated group, Morningstar has now admitted that all was not kosher when it came to their ESG coverage of Israel-related companies,” Shay told us by email this week. “JLens was the leader of the posse but the article published by The Jewish Link, as well as the relevant section in Conspiracy U, was significant in that it was sent to legislators, regulators, business contacts and others who ultimately pressured Morningstar to conduct an independent investigation.”