How a Leading Financial-Research Firm Encourages Divestment from Israel

Investors who aspire to use their money in “socially responsible” ways—or to appear to be doing so—have in recent years sought out evaluations of firms based on “environmental, social, and governance criteria,” or ESG. Perhaps foremost among the firms offering ESG ratings is Sustainalytics, which in 2020 was acquired by the financial-services giant Morningstar. As the author and businessman Scott Shay has detailed, Sustainalytics’s analyses were infected with anti-Israel prejudice. These revelations eventually led Morningstar to hire a law firm to conduct a formal investigation into the subject. Richard Goldberg comments on the lawyers’ report, which presents itself as an exoneration, when, in fact, it is something else: