Sustainalytics, an ESG research firm owned by Morningstar, will no longer assess human rights issues in the “Israeli-Palestinian conflict area” and parts of Ukraine. Morningstar informed clients last week that this decision stems from concerns about the reliability of information from these regions.

The company stated that human rights information related to “contiguous territorial disputes” is often influenced by “complex geopolitical factors, divergent views, and conflicting partisan media reports,” making it difficult to ensure objectivity, reliability, and consistency.

Richard Stazinski, co-founder and executive director at Heartland Initiative, said that the change hinders investors’ ability to uphold commitments to clients and beneficiaries who consider human rights and conflict-related risks and duties under national laws requiring sustainability due diligence and reporting.

“Producing a dataset that does not align with the UN Guiding Principles and international law further impedes investors’ ability to meet their fiduciary duties to mitigate material risks associated with business activities in markets affected by conflict, including ‘contiguous territorial disputes’,” he said.