Southern AGs investigate investment firm MSCI over anti-Israel bias

MSCI website. Credit: Mehaniq/Shutterstock.

By Mike Wagenheim

(JNS) — When Ashley Moody announced on March 29 that she is leading a coalition of state attorneys general in investigating whether a major investment firm is engaging in anti-Israel practices, the Florida attorney general cited JNS reporting.

“Israel is our greatest ally in the Middle East, and in Florida, we unequivocally support their right to exist,” Moody stated. “The BDS movement has one goal, the complete elimination of Israel as a Jewish state. The allegations against MSCI are deeply disturbing, and we have called for a quick response from the company’s leadership directly addressing our concerns.”

“As reported by the Jewish News Syndicate, ‘Like Morningstar, which allegedly assigned damaging ratings to a dozen companies that it said committed “human rights violations” simply for conducting business in Judea and Samaria and eastern Jerusalem, MSCI’s environmental, social and corporate governance (ESG) ratings appear to downgrade companies for the same reason’,” the Florida attorney general stated.

Based in New York, MSCI manages some $5.2 billion in assets. JNS has reported for more than two years on anti-Israel bias at the Chicago-based Morningstar financial services firm, which manages and advises on about $264 billion in assets.

The coalition is made up of attorneys general from 18 states: Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Oklahoma, South Carolina, Texas, Utah, Virginia and West Virginia.

The group of 18 is probing whether MSCI “is embracing the boycott, divestment and sanctions, or BDS, movement against Israel,” Moody announced.

“As evidenced by our efforts against Morningstar, we oppose the BDS movement in all forms, especially given the recent rise in antisemitism across the United States. Having said that, one of the allegations against MSCI is uniquely egregious,” the group of 18 wrote in the March 28 letter to Henry Fernandez, chairman and CEO of MSCI.

“According to JNS, MSCI deducted ESG points from an Israeli company specifically because of the company’s ‘participation in the construction of security and surveillance barriers designed to protect Israelis from terrorists.’ It is unthinkable to us that MSCI would stand by this position following the terrorist attacks on Israel last October,” the group wrote.

Using a publicly available search tool on the MSCI website, JNS found that the company has tagged at least nine companies with ESG controversy ratings that do business in Judea and Samaria.

A copy of MSCI’s ESG ratings for Elbit, dated January 2023, that JNS viewed suggests that MSCI deducted 2.4 points from the international defense technologies company’s ESG ratings due to controversies surrounding Elbit’s participation in the construction of security and surveillance barriers designed to protect Israelis from terrorists.

In the document JNS viewed, MSCI described the controversies as “severe.”

The MSCI report cited Elbit’s construction of the security barrier in Judea and Samaria at the height of the Second Intifada (2000-2005), which stopped the flood of suicide bombers from crossing from Palestinian Authority-controlled territory into Israel.

The MSCI report cited criticism of the barrier by the “Palestinian civil society campaign for boycott, divestment and sanctions.” It also mentioned Pax Christi, a Catholic group that routinely demonizes Israel; and “Jewish Voice,” an apparent reference to Jewish Voice for Peace, which denounces the Jewish state on a regular basis.

In its damaging score of Elbit, MSCI also included the company’s construction of the “smart barrier” along the Gaza border — the one that Hamas terrorists destroyed on Oct. 7 en route to carrying out their killing and hostage-taking spree.

The security barrier “would allegedly intensify Israel’s control over Gaza and would further hinder peaceful resolution of the conflict,” the document states.

“Given the disturbing nature of the allegations, the attorneys general are requesting a response from MSCI Chairman and CEO Henry A. Fernandez by April 18,” the Florida attorney general stated.