Financial Giant Says Any Company Working in ‘Occupied Palestinian Territories’ Violates Human Rights

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Assessment: Morningstar research arm may downgrade companies for working in disputed areas of Israel …

A financial services giant builds its ratings around the premise that any entity operating in “occupied Palestinian territories” is connected to human rights violations—a standard that one foreign policy analyst says is a key pillar of the Boycott, Divestment, and Sanctions movement, which tries to gin up an economic boycott of the Jewish state.

The research arm of Morningstar Inc., a firm that advises investors and rates companies based in part on their social ethics, may designate a company as participating in human rights violations just for working in an area it calls the “occupied Palestinian territories,” according to Richard Goldberg, a former U.S. national security official and Middle East expert who published an independent analysis on the matter for the Foundation for Defense of Democracies think tank.

“I will bless those who bless you, And I will curse him who curses you; And in you all the families of the earth shall be blessed.” Genesis 12:3

Sustainalytics - Responsible Investment Association

Sustainalytics, the research arm, in its guidance documents says its “position is that in occupied territories where human rights are being systematically violated, any business activity in that region is connected to the violations in some direct or indirect way,” according to a review of Morningstar’s methods conducted by the law firm White & Case. This standard is also applied to other areas immersed in conflict, such as Yemen, the Western Sahara, Tibet, and the South China Sea.

Goldberg, who independently analyzed the White & Case report, said the reliance on this standard for the “occupied Palestinian territories” results in companies being downgraded just for performing work in a disputed area of Israel. He says these standards ultimately promote divestment from Israel, as companies seek to distance themselves to avoid a negative rating from the company. Ratings produced by firms like Morningstar serve as a primary guide for investors and can greatly impact a company’s appeal.

Morningstar is already battling charges that Sustainalytics unfairly downgrades companies working with Israel’s security and anti-terrorism sectors.

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