South Carolina threatens to sever ties with Morningstar over alleged anti-Israel practices

South Carolina threatens to sever ties with Morningstar over alleged anti-Israel practices

The South Carolina State Treasurer is threatening to sever ties with Morningstar, a billion-dollar financial firm, over its relationship with a subsidiary that has proven negative for Israel-linked businesses.

In a letter to Morningstar CEO Kunal Kapoor, South Carolina State Treasurer Curtis M. Loftis Jr. alleged that Sustainalytics, a wholly-owned subsidiary of Morningstar, negatively rates companies linked to Israel . The ratings were issued as part of the subsidiary’s efforts to assess environmental, social and governance (ESG) practices, a standard that some say reflects far-left positions.

“The State of South Carolina does not support companies involved in Israel boycott, divestment, or sanctions, and recent reports regarding Sustainalytics are concerning,” Loftis wrote.

Colombia, South Carolina, United States.

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The South Carolina Treasury Office currently relies on Morningstar for its ratings, data and analysis of the state’s Future Scholar 529 College Savings Plans, a $6 billion fund. Loftis wrote that Morningstar must provide “evidence” that the company is complying with South Carolina law, which prohibits blacklisting “any person or business based on race, color, religion, sex or national origin of the targeted person or entity”.

Without proof of compliance, South Carolina will terminate its relationship with Morningstar.

“The state constitution and code of laws make it clear that my responsibility rests with the citizens of South Carolina, and not with politically and financially motivated special interests,” Loftis said. “Legislators in many states and in both parties feel the same way, and it’s time we started a national conversation about standing up to powerful influences deployed against the interests of our citizens.”

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Wall Street, NYC, NY (Reuters/Mike Segar/Reuters Photos)

Sustanalytics identifies itself as a “global leader in ESG research and data” and serves 18 of the top 20 asset managers.

“For more than 30 years, our company has focused on providing innovative solutions that have enabled the world’s leading institutional investors to identify, understand and manage ESG-related risks and opportunities,” the page reads. About Us” from the company. “With Sustainalytics now part of Morningstar, we are accelerating our efforts to bring meaningful ESG insights to investors of all types across different asset classes at the company and fund level.”

ESG is an ambiguous rating system that rates companies based on considerations that have little to do with the bottom line, including environmental, social and corporate governance policies.

South Carolina Attorney General Alan Wilson joined 16 other attorneys general in an Aug. 23 letter to Morningstar about their affiliate’s alleged promotion of the boycott, divestment and sanctions (BDS) movement. (Drew Angerer/Getty Images)

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Loftis and 17 other state treasurers previously wrote in an Aug. 25 letter to Morningstar that an independent review of their ESG practices revealed “deep-seated” anti-Israel bias and called on the company to take corrective actions. In an interview with Fox News Digital, Loftis said Morningstar’s responses so far have been insufficient, prompting today’s letter. He says he hopes the company “takes the time to address this seriously.”

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“Morningstar violates a South Carolina principle that we will not support companies that do not support freedom and democracy. The BDS movement is anti-freedom, anti-democracy,” Loftis said.

A Morningstar spokesperson told Fox Digital, “Morningstar does not support the anti-Israel BDS campaign.”

Fox News’ Houston Keene contributed to this report.

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