() The state of Florida has placed another company, Morningstar–Sustainalytics, on its list of “Scrutinized Companies that Boycott Israel.” The company, which rejects the accusation, has 90 days to respond or be subjected to Florida’s divestment and contract prohibitions.
Gov. Ron DeSantis, Attorney General Ashley Moody and CFO Jimmy Patronis, all trustees of the State Board of Administration, made a joint announcement after they placed Morningstar–Sustainalytics under continued examination in August for its “controversial research methodology which categorizes companies as a risk for supporting Israeli interests in Judea and Samaria.”
The SBA then had a meeting on Oct. 25 about the “environmental, sustainable, governance” corporate governance research, ratings and analytics firm.
As of June 30, the Florida Retirement System held 26,343 shares of Morningstar’s stock worth $5.9 million, Pensions & Investments reports.
“Florida will hold companies accountable for discriminating against Israel,” DeSantis said in a joint statement. “We will continue to invest in companies that provide Floridians with the best return on investment and not companies that utilize arbitrary ESG metrics to advance a BDS agenda.”
Moody said the action should send a message to other woke corporations hoping to do business with or in the state of Florida that they could expect a dose of their own medicine when it came to exerting financial pressure on entities to amend their politically controversial practices.
“Our actions on Morningstar–Sustainalytics should put the rest of the world on notice,” she said. “Florida will not stand by while companies use their economic power to attack Israel.”
Morningstar issued a statement in response, saying, “Morningstar does not support the anti-Israel BDS campaign; it never has, and it never will.”
Last year, the company faced similar scrutiny from a range of Jewish groups, including the Jewish Federations of North America, the Anti-Defamation League, and the American Jewish Committee, among many others over its ESG products.
Of the many concerns raised was language it used in its products referring to the West Bank in Israel as “Occupied Palestinian Territory” or “occupied territory.”
Israel, as a sovereign nation, doesn’t occupy any “territory” and has a right to defend itself from terrorists whose stated goal is to kill Jews and destroy Israel, DeSantis has argued.
After a months-long engagement process with the organizations, Morningstar said it committed to “further fortifying” its ESG “research and ratings against any concerns of anti-Israel bias” and “strongly reinforces the fact that we repudiate the Boycott, Divest, and Sanctions campaign.”
It also agreed to adopt all recommendations made by an independent investigation into its anti-Israel bias allegations and commit to take specific actions.
But some industry watchers have warned that companies may attempt to rebrand their toxic practices under another name due to the negative stigma now attached to the ESG label from the public awareness of it.
That goes doubly for anti-Semitic practices against Israel in the wake of the Oct. 7 terrorist attack that prompted it to declare war on the terrorist organization Hamas.
Pro-Hamas leftist groups in the U.S. and elsewhere have demonstrated—sometimes violently—in response, but have been met with their own backlash and consequences from those rallying in support of Israel and the Jewish people.
Florida’s chief financial officer, Jimmy Patronis, issued a warning to all companies doing business in Florida: “Let me be clear—If you want to do business with the State of Florida, you cannot support BDS policies against Israel, or you will face the consequences.”
The announcement comes after Florida has taken unprecedented action to support its Jewish population, including expanding law enforcement resources statewide, shutting down pro-Hamas student organizations on state college and university campuses, and flying roughly 700 Americans to Florida who were stranded in Israel.
Florida is the only state to bring home stranded Americans from Israel.
Florida has cracked down on companies involved in the BDS movement before. In 2019, it added Airbnb to its Scrutinized Companies List. Airbnb then reversed its policy and was taken off the list. In 2021, Unilever, the parent company of Ben & Jerry’s, was added to the list and remains on it.
