South Carolina threatens to cut ties with Morningstar for its alleged anti-Israel practices
A South Carolina treasurer is threatening to cut ties with Morningstar, a billion-dollar financial firm, over its relationship with a subsidiary that turns out to be negative rating firms linked to Israel.
In a letter to Morningstar CEO Kunal Kapoor, South Carolina Treasurer Curtis M. Loftis Jr. alleged that Sustainalitics, a wholly owned subsidiary of Morningstar, negatively rates companies linked to Israel. These ratings were released in the context of the subsidiary’s efforts to assess environmental, social and governance (ESG) practices, a standard that some believe reflects far leftist positions.
Loftis writes that “South Carolina does not support companies that engage in boycotts, divestment, or sanctions against Israel, and recent reports regarding Socialites are concerning.
Indiana AG recalls activist-led ESGs agendas, seeks to block use to invest state pensions
The South Carolina Treasury office currently relies on Morningstar for its ratings, data, and analysis of the state’s 529 College Savings Savings Plans, a $6 billion fund. Loftis wrote that Morningstar must provide “evidence” that the company complies with South Carolina law, which prohibits listing “a person or company on the basis of the race, color, religion, sex, or national origin of the targeted person or entity.”
In the absence of evidence of compliance, South Carolina will terminate its relationship with Morningstar.
“The state constitution and statutes make it clear that my responsibility is to the citizens of South Carolina, not to politically and financially motivated private interests,” Loftis said. “Elected officials from many countries and both parties feel the same way, and it is time to start a national dialogue about resisting the powerful influences rallying against the interests of our citizens.”
Sustanalytics defines itself as a “global leader in ESG research and data”, serving 18 of the 20 largest asset managers.
“For more than 30 years, our company has focused on delivering innovative solutions that have enabled the world’s leading institutional investors to identify, understand and manage risks and opportunities that are driven by the environment, society and governance,” states the company’s About Us page. “With Sustainability Insights now part of Morningstar, we are accelerating our efforts to provide meaningful ESG insights to investors of all types across different asset classes at the company and fund levels.”
ESG is a vague rating system that ranks companies based on considerations that have nothing to do with the bottom line, including environmental, social and corporate governance policies.
GOP AGS Financial Company Targeted for Billions of Dollars for Alleged Anti-Semitism in ESG Campaign
Loftis and 17 former government treasurers wrote in an August 25 letter to Morningstar that an independent review of their ESG practices revealed “deeply submerged” bias against Israel and asked the company to take corrective action. In an interview with Fox News Digital, Loftis said Morningstar’s answers so far haven’t been enough, prompting today’s message. He says he hopes the company will “take the time to take this seriously”.
CLICK HERE FOR FOX NEWS APP
“Morningstar violates South Carolina’s principle that we will not support companies that do not support freedom and democracy. The BDS movement is against freedom and democracy,” Loftis said.
“Morningstar does not support the anti-Israel BDS campaign,” a Morningstar spokesperson told Fox Digital.
Fox News’ Houston Keane contributed to this report.