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Sustainalytics ESG Risk Ratings and Research on Israeli Companies

How we’ve addressed anti-Israel bias concerns in our research

Following questions about whether some of Sustainalytics’ ESG research reflected biases, we engaged with organizations to understand the concerns and underwent thorough, independent reviews of our research in the sensitive area of human rights. That process, while long, was a substantive and productive one that drew from multiple authoritative viewpoints and made our research stronger.

We recognize that research related to human rights and conflict areas represents a very small part of Sustainalytics’ total ESG research and analysis. However, it is a complex area that’s extremely difficult to get right. We engaged independent, recognized experts in international and human rights law to provide a report setting out recommendations on the assumptions, sources and language used by us in such research, and we have implemented a set of reforms that are consistent with their report. 

Among the changes we’ve made to enhance our processes and minimize risks of bias, human rights incidents connected to contiguous disputed territories are no longer eligible for research coverage. This means we won’t cover those areas because human rights issues, when related to contiguous territorial disputes, are less likely to be objective, reliable, or consistent, and are subject to complex geopolitical factors, divergent views and conflicting partisan media reports.

Morningstar has always been a force for transparency in the industry, and we applied that commitment to ourselves by making each third-party report available to the public and publishing a detailed progress tracker that followed each of our committed actions through to completion. You can find more background and details on each of the changes we’ve made here.

Since our founding 40 years ago, Morningstar has been dedicated to independent, comprehensive research that investors can trust. Our role is to advance transparency, promote access to valuable insights, and enable investor choice to support successful investor outcomes. We remain committed to delivering consistent, reliable, and actionable research in human rights issues, backed by a rigorous methodology, and we look forward to continuing to provide investors with the information they seek to guide successful investing outcomes.