Missouri Attorney General Eric Schmitt speaks during a news conference after the U.S. Supreme Court heard oral arguments in President Joe Biden’s bid to rescind a Trump-era immigration policy that forced migrants to stay in Mexico to await U.S. hearings on their asylum claims, in Washington, U.S., April 26, 2022. REUTERS/Elizabeth Frantz

Missouri Attorney General Eric Schmitt has launched an investigation into whether Morningstar Inc violated a state consumer-protection law through its evaluations of environmental, social and governance (ESG) issues, his office told Reuters.

The review is two-pronged, covering ESG matters as well as whether the financial research firm violated a separate Missouri law aimed at protecting Israel from a campaign to isolate the Jewish state over its policies towards Palestinians.

Staff for Schmitt said it is the first instance of a state looking into ESG ratings products potentially breaching such laws, on the books in more than 30 US states.

“Missouri has been a leader in pushing back against woke ESG investing, and my office will continue to look out for consumers,” Schmitt — a Republican who on Tuesday won his party’s nomination for a US Senate seat — said in a statement.

Morningstar Chief Executive Kunal Kapoor said the company was evaluating Schmitt’s action.

“Sustainability introduces new choices for investors; Morningstar provides the data and insights to help investors of all types weigh those choices in their decision making,” Kapoor said in a statement.

In a pair of July 26 civil investigative demands to Morningstar and to its Sustainalytics ESG-ratings unit, Schmitt said they may have violated the Missouri Merchandising Practices Act such as by misrepresenting or omitting facts.

Schmitt’s office said the violations may have occurred through the sale of ESG products to Missouri-based businesses and other consumers, such as if the products overly emphasized the risk for companies of doing business in Israel.

Among his demands, Schmitt is seeking documents or communications relating to “ESG Services and BDS,” referring to the boycott, divestment and sanctions movement against Israel.

Morningstar has said it does not support the BDS campaign — a claim for which Schmitt also sought documents.

In June, Chicago-based Morningstar said it would cancel a human rights research product meant to help clients evaluate companies working in high-risk countries and disputed territories, after a law firm hired by Morningstar found the research focused disproportionately on the Israeli-Palestinian conflict relative to other regions.