Sustainalytics is a company owned by the American financial firm Morningstar that provides environmental, social, and governance (ESG) data to companies¹⁾. It is one of the leading providers of ESG screening and is used by organisations to determine whether investments meet their Responsible Investment Policy.

Following significant lobbying from pro-Israel organisations like the ADL, in 2021 Morningstar engaged external law firm White & Case LLP to conduct an investigation of Sustainlaytics to review whether there was anti-Israel bias in their screening process. The investigation found²⁾:

- There was no evidence Sustainalytics products recommended or encouraged divestment from Israel.
- There was no evidence of pervasive or systemic bias against Israel across Sustainalytics products, including the Sustainalytics ESG Risk Rating.
- One Sustainalytics product, Human Rights Radar, exhibited bias in its outcomes by overrepresenting firms linked to the Israeli-Palestinian conflict.

To address this, the Human Rights Radar product was discontinued.

Right-wing US state officials were not satisfied with the outcome and started investigations into Sustainalytics for violating their states' anti-BDS laws³⁾⁴⁾. In response to the mounting legal pressure, Sustainalytics amended their policies in October 2022 to address “anti-Israel bias concerns” in their research⁵⁾. These changes state that:

- Sustainalytics will immediately terminate the use of several sources, including the United Nations Human Rights Council, among others“
- Sustainalytics will use geographic names (e.g., West Bank, East Jerusalem) in relevant regions, rather than terms such as “Occupied Palestinian Territory” or “occupied territory”
- (Sustainalytics)…will remove references to the Boycott, Divest, and Sanctions campaign
- Sustainalytics will provide additional documented guidance to ensure that its analysts understand that business activity, including but not limited to sectors such as telecommunications, banking, real estate, and construction, within the regions linked to the Israeli-Palestinian conflict or related to Israel’s defense against terrorism, do not give rise to a presumption that there is a human rights concern.

Joe Mansueto, executive chairman of Morningstar, added “Morningstar strongly reinforces the fact that we repudiate the Boycott, Divest, and Sanctions campaign”.