Montana Attorney General Austin Knudsen announced today the initiation of an investigation into MSCI Inc., a prominent investment firm, over allegations of discriminatory practices against Israeli companies. The probe, conducted under Montana’s Unfair Trade Practices and Consumer Protection Act, targets MSCI’s purported involvement in boycott, divestment, and sanctions (BDS) actions against Israel.
The investigation follows reports that MSCI may have unfairly deducted environmental, social, and corporate governance (ESG) points from an Israeli company due to its efforts to safeguard Israelis from terrorist threats. The Civil Investigative Demand (CID) issued by the Attorney General requires MSCI to respond within 30 days.
“My commitment to supporting Israel remains unwavering, and so does Montana’s,” Attorney General Knudsen stated. “The reports of discrimination against Israeli companies are deeply troubling. If MSCI is found to be engaged in illegal business practices, I will use all available means to hold them accountable and ensure that Montanans are protected from unlawful and discriminatory actions.”
Recent reports suggest that MSCI assigned a lower “yellow” rating for social and human rights concerns to Israeli banks operating in Judea and Samaria. In contrast, the firm reportedly awarded a higher “green” rating to the state-run Bank of China, which has been implicated in human rights abuses in the Xinjiang Uygur Autonomous Region of China. U.S. officials have classified China’s actions in Xinjiang as genocide and crimes against humanity.
Earlier this year, Attorney General Knudsen, along with 16 other attorneys general, addressed MSCI in a letter expressing concerns about the firm’s apparent support for the BDS movement against Israel. The letter highlighted allegations that MSCI reduced ESG points for an Israeli company due to its role in constructing security barriers to protect against terrorism. The letter condemned MSCI’s stance, particularly in light of recent terrorist attacks on Israel.
“As evidenced by our previous actions against firms like Morningstar, we firmly oppose the BDS movement, especially amid a rise in antisemitism across the United States,” Knudsen said. “The allegations against MSCI are particularly concerning, and we are committed to addressing any discriminatory practices.”
The investigation marks a significant effort by Montana to scrutinize and challenge potential biases within major investment firms and ensure fair treatment of businesses regardless of their national affiliations.
Click here to read the CID.