Morningstar drops investment service at library after landing on Florida's anti-Israel list

Specifically, Florida officials said they would reinstate Morningstar Analytics if it follows through on recommendations to remove “occupied territories” from its criteria for determining the investment risks in certain companies operating in the West Bank.

Gov. Ron DeSantis, Attorney General Ashley Moody and CFO Jimmy Patronis voted unanimously to lift the ban if the company provides documents proving it made the changes to adhere to Florida’s anti-boycott, divestiture and sanctions law. They made that call in their role as the State Board of Administration.

DeSantis touted the decision as a victory for Florida’s policy.

“I think their actions are promising,” DeSantis said.

Once they are removed from the list, however, they will continue to be monitored, he said.

The vote to ban Morningstar was the first such divestment after DeSantis signed a bill into law last May that cracked down on companies perceived to use environmental, social and governance standards to target Israeli companies.

This isn’t the first time the state has gone after companies that didn’t do business in the West Bank.

DeSantis and the SBA placed AirBnB on its watchlist in 2019 because it wouldn’t list properties in the West Bank. The company reversed its policy, and the state rescinded the sanction.

And three years ago the SBA sold Florida’s shares in Unilever, the parent company of Ben & Jerry’s ice cream, which had been placed on the scrutinized list for refusing to sell products in the West Bank.

The state’s sanctions against Morningstar last October came a year after the company had already committed to address the anti-bias concerns raised by Jewish organizations. Morningstar said it had never boycotted Israel.

“In fact, Morningstar has long done business in Israel and has many clients in Israel,” Wirth said.

The company “engaged with organizations to understand the concerns and underwent thorough, independent reviews of our research in the sensitive area of human rights,” Wirth said. “That process, while long, was a substantive and productive one that we’re grateful to have taken. Our research today is even stronger for the investors we serve.”

In evaluating the risk to investors, Morningstar’s ratings make assumptions that Israeli-connected companies are at risk of violating international human rights standards because they operate in the West Bank, according to the Foundation for Defense of Democracies, a nonpartisan think tank.

The Jewish groups that had raised concerns about the language said they considered the matter resolved in February after Morningstar accepted the recommendations to remove what they considered language supporting the nonviolent Boycott, Divestment and Sanctions movement protesting Israel’s treatment of Palestinians.

“If the remaining BDS controversies come off Israeli companies after this, we can finally say that Morningstar is BDS free,” said Rich Goldberg of the Foundation for Defense of Democracies.