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AG Reyes Joins Investigation into ESG Ratings Company Morningstar and its Subsidiary Sustainalytics

August 23, 2022

Utah Attorney General Sean D. Reyes and a coalition of 18 other state attorneys general joined Missouri’s investigation into ESG (environmental, social, governance) investing ratings company Morningstar Inc. and its subsidiary Sustainalytics for alleged violations of Utah’s consumer protection laws. This is the first investigation by state attorneys general into an ESG ratings company for alleged consumer fraud or unfair trade practices. 

In early August, the Missouri Attorney General’s Office launched an investigation and sent civil investigative demands to Morningstar and Sustainalytics, both containing 43 interrogatories for documents pertaining to Morningstar’s perceived anti-Israel bias in ESG ratings products like Sustainalytics’ “Human Rights Radar,” as well as documents relating to previous investigations into this bias by the law firm White & Case and the Illinois Investment Policy Board. 

AG Reyes has now joined this investigation into Morningstar and Sustainalytics. 

Some of the interrogatories include:

  • Identify and provide all documents and communications relating to the March 16, 2021 statement, “Morningstar Affirms Integrity of ESG Research and Ratings,” including all documents referenced in the statement and documents relating to your internal review. 
  • Identify and provide all documents and communications with the Illinois Investment Policy Board relating to ESG Services or BDS. 
  • Identify and provide all Documents and Communications relating to changes to your ESG services relating to: (1) the May 11, 2022 report from White & Case, “Report of Independent Investigative Counsel Regarding Alleged Anti-Israel Bias in Morningstar, Inc. ESG Products and Services” (“White & Case Report”); (2) Your June 2, 2022 statement, “A Letter from Joe Mansueto and Kunal Kapoor”; and/or (3) the June 22, 2022 meeting of the Illinois Investment Policy Board Committee on Israel Boycott Restrictions. 
  • Identify and provide all documents and communications with any federal government or state government entity relating to ESG Services and BDS. 
  • Identify and provide all documents and communications with any third-party relating to concerns, complaints, or criticisms about ESG Services and BDS. 
  • Identify and provide all documents ranking news sources or assessing their reliability for any of your ESG Services, and identify and provide the “blacklist” and “watchlist” of sources used by the Incidents team researchers. 
  • Identify and provide the Human Rights Radar methodology document, process map, description of standard operating procedures, and analyst guidance document, including all draft, final, and updated versions thereof. 
  • Identify and provide all documents and communications relating to the Global Standards Engagement 2018 report and 2021 update report containing bespoke research on the Israeli/Palestinian conflict area. 
  • Identify and provide any document provided to or reviewed by White & Case in the course of preparing its May 11, 2022 report, “Report of Independent Investigative Counsel Regarding Alleged Anti-Israel Bias in Morningstar, Inc. ESG Products and Services” (“White & Case Report”). 
  • Identify and provide all documents and communications with clients trying to dissuade them from doing business in and/or with Israel. 
  • Provide all documents and communications between any GSE (Global Standards Engagement) engagement manager and any person or entity relating to business conducted in, with, or relating to the State of Israel, any Israeli/Palestinian conflict areas, and/or BDS. 

More information will be made available as this investigation moves forward. 

Read the letter here.