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South Carolina’s state treasurer has threatened to cut ties with Morningstar, a billion-dollar financial firm, for its ties with a subsidiary that was found to be companies with negative ratings linked to Israel.

In a letter to Morningstar CEO Kunal Kapoor, South Carolina State Treasurer Curtis M. Loftis Jr. alleged that Sustainlytics, a wholly owned subsidiary of Morningstar, negatively rates Israel-affiliated firms. Those ratings were issued in the context of the subsidiary’s effort to rate Environmental Social and Governance Practices (ESG), a standard that some believe reflects the far-right status quo.


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

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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 Plan, a $6 billion fund. Loftis wrote that Morningstar must provide “evidence” that the firm complies with South Carolina law, which mandates “blacklisting of an individual or firm on the basis of race, color, religion, gender or national origin of the targeted individual or entity.” prohibits it.”

absent proof of complianceSouth Carolina will end its relationship with Morningstar.

“The state’s Constitution and Code of Law make it clear that my responsibility is to the citizens of South Carolina, not to politically and economically motivated special interests,” Loftis said. “officers elected from Many states and both parties Feel the same way, and it is time for us to start a national conversation about resisting powerful influences against the interests of our citizens.”

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

“For more than 30 years, our firm has focused on delivering innovative solutions that have enabled the world’s leading institutional investors to identify, understand and manage ESG-driven risks and opportunities,” said the company. “About Us” page reads. “Now that Sustainlytics is a part of Morningstar, we are ramping up our efforts to bring meaningful ESG insights to investors of all types across different asset classes at the company and fund level.”

ESG is a vague scoring system Which rates corporations based on considerations that have nothing to do with the bottom line, including the companies’ environmental, social and governance policies.

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

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

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

Fox News’ Houston Keene contributed to this report.