Days after U.S. Jewish and pro-Israel groups pushed the major financial services firm Morningstar to reform anti-Israel biases in its ratings to guide investors, the coalition is working with another investment firm, MSCI, which at least U.S. 19 states are probing for a similar sort of discrimination against the Jewish state, multiple sources tell JNS.
Morningstar, a Chicago-based firm that reported nearly $570 million in revenue and more than $3.56 billion in total assets in the third quarter of 2024, said on Dec. 31 that its subsidiary, Sustainalytics, was implementing reforms in response to concerns about anti-Israel bias.
That announcement finalized a multi-year process led by the coalition of Jewish groups, which includes the Jewish Federations of North America, the Conference of Presidents of Major American Jewish Organizations, the Anti-Defamation League and others.
Ari Hoffnung, managing director of JLens and senior adviser on corporate advocacy at the ADL, told JNS that “we commend Morningstar for commissioning independent experts, removing dozens of biased controversy ratings and pledging further reforms,” steps that he said should be a model for the environmental, social and governance movement, “including MSCI.”
“We will continue collaborating with other Jewish and pro-Israel organizations, and advocating with MSCI and additional financial industry stakeholders until Israel is treated fairly,” Hoffnung added. “We have zero tolerance for any anti-Israel bias.”
A source familiar with the coalition’s work told JNS that the coalition is continuing its efforts and challenging MSCI. The source, who didn’t divulge details of any discussions, told JNS that “the focus isn’t so much on media attention, but on getting the results, and we want to preserve the kind of communication in which that can happen.” (JNS sought comment from MSCI.)
‘There’s more work to be done’
Agencies in at least 19 U.S. states have flagged MSCI, a New York-based firm, and are probing it about the way it issues ratings for companies that do business in Judea and Samaria, and eastern Jerusalem.
JNS reporting revealed that MSCI had flagged Motorola and Caterpillar—both companies with ties to Illinois—among others for helping the Israeli government and military combat terrorism and illegal practices in Israel-controlled territory.
MSCI tagged those companies with human-rights controversies, lowering their investment scores. Illinois Investment Policy Board, which met this fall with MSCI representatives about potential violations of Illinois’s anti-BDS law, cited the probes and JNS reporting.
MSCI removed human-rights controversy penalties in their reports on Motorola and Caterpillar in late 2024, JNS reported.
The coalition anticipates holding some meetings with MSCI in the new year after it heard from MSCI shortly before the end of 2024, the source with knowledge of the group told JNS.
“We knew that they were starting to initiate a few methodology changes, which are a positive step, but don’t go far enough yet,” the source said.
“Anything that MSCI may have moved toward is good, but from what I know of their issues, more needs to happen,” the source added. “There’s more work to be done.”
Hoffnung told JNS that JLens, which the ADL acquired in 2022, believes that “investors are entitled to research that is both objective and uninfluenced by boycott, divest and sanctions activists seeking to deter companies from doing business with Israel.”
“We encourage all environmental, social and governance data providers to adopt transparent, consistent and rigorous practices so that companies operating in Israel are held to the same standards as those worldwide,” he added.