'Don't Trust Morningstar': Advocacy Group Launches Nationwide Campaign Against Anti-Israel Financial Firm

Israel's security barrier May 4, 2008 (Getty images)
April 18, 2023

The financial services giant Morningstar, which has come under fire for punishing companies that do business with Israel, is now facing a boycott movement of its own, with a major advocacy group pushing companies to steer clear of the ratings service.

"Don’t trust Morningstar," states a blaring headline on a website launched Tuesday by Consumers’ Research, a nonprofit advocacy group. Consumers’ Research alleges that Morningstar bolsters the anti-Israel Boycott, Divest, and Sanctions movement by systematically downgrading companies that do business with Israel, driving investors away from the Jewish state. The group’s nationwide boycott campaign seeks to expose the company’s anti-Israel bias and urges people to steer clear of its ratings, according to information obtained by the Washington Free Beacon. 

Morningstar subsidiary Sustainalytics—which rates companies based on Environmental, Social, and Corporate (ESG) governance guidelines—has been battling accusations it feeds the BDS movement through a biased ratings system that unfairly targets Israel for its efforts to combat Palestinian terrorism. The ratings produced by Morningstar and Sustainalytics serve as a primary guidepost for investors, who tend to shy away from firms that are flagged on the company’s do-not-invest list.

The pressure campaign is the most public challenge to Morningstar since the company became embroiled in anti-Israel controversy last year following its acquisition of Sustainalytics. Morningstar denies that it supports the BDS movement but blacklists companies that work with Israel’s security sector, the Free Beacon reported in February. Advocacy groups like Consumers’ Research say that Morningstar is letting woke ideology—which portrays Israel as a pariah state—guide its ratings system.

Consumers’ Research says its campaign seeks to boycott the boycotters by raising awareness about Morningstar’s alleged anti-Israel bias. In addition to the website,, the group is sending out mailers across the country that accuse Morningstar of blacklisting "Israel-based companies using antisemitic criteria."

A mobile billboard will also be stationed this week outside the company’s Chicago headquarters carrying the message, "Morningstar is using ESG to cover for BDS and blacklisting Israel based companies." Information about the website and accompanying campaign was provided to the Free Beacon prior to its official launch later on Tuesday.

"As one of the earliest adopters of ESG, Morningstar has long been at the forefront of pushing corporate America to go woke. By using its ratings system and other research tools, it has put its fiduciary responsibility to its clients on the backburner in favor of political investment schemes," Will Hild, executive director of Consumers’ Research, said in a statement.

"Left unchecked," Hild said, "large asset management firms would happily inject progressive politics into every aspect of American life. This, combined with its clear anti-Israel bias, has made it clear that Morningstar simply cannot be trusted."

Morningstar is also under investigation by several states for potential violations of anti-BDS laws, which bar companies that contract with state entities from supporting the Israel boycott movement. If the investigations determine that Morningstar and Sustainalytics are aiding the BDS movement, the company could lose major state contracts.

These investigations pushed Morningstar to implement a series of reforms at Sustainalytics that it says eradicated most instances of anti-Israel bias.

But these efforts have not been enough to assuage concerns in the pro-Israel and Jewish advocacy world, particularly since several companies that work with Israel’s security sector remain on the company’s do-not -invest list. This includes Elbit Systems, which provides counterterrorism surveillance technology that helps the Jewish state combat terrorism. Israeli banks also remain flagged by Morninstar’s Sustainalytics for providing services in what the company terms the Occupied Palestinian Territories.

To combat the perception of anti-Israel prejudice at Sustainalytics, Morningstar hired an outside law firm, White & Case, to conduct an in-depth review of the company’s ratings products. That report, published in May 2022, "made recommendations to tighten processes and procedures to strengthen our objectivity, transparency, and consistency," according to Morningstar. "We’re making those changes and committed to additional actions that we believe will make our research better and strengthen its transparency, consistency, and objectivity."