Morgan Stanley’s Rating Farce: Greenwashing China’s Ninestar While Ignoring Human Rights Violations.

[toner]

Morgan Stanley’s Rating Farce!
Greenwashing China’s Ninestar While Ignoring Human Rights Violations.
In a move that has raised alarms among corporate watchdogs and human rights advocates, Morgan Stanley recently upgraded China’s Ninestar to an ‘A’ rating for its environmental, social, and governance (ESG) practices. The move comes amidst ongoing investigations by U.S. government agencies into Ninestar’s connections to forced labor and other serious human rights violations. This controversial decision has sparked accusations of greenwashing and corporate compromise, with critics accusing Morgan Stanley of overlooking the company’s troubling track record in favor of lucrative business interests.

The Upgrade: A Dubious Move
On the surface, Morgan Stanley’s upgrade of Ninestar—a Chinese multinational known for its role in the printing and imaging sector—appears to be a standard practice of assessing a company’s ability to manage environmental and social risks. The company received an ‘A’ rating for its supposed adherence to environmental sustainability, social responsibility, and robust governance practices.

However, a deeper dive into Ninestar’s history reveals a much darker reality. The company is currently under investigation by multiple U.S. government entities for alleged ties to forced labor, particularly in relation to its supply chains in Xinjiang, China. The region has been a focal point of international scrutiny due to widespread reports of human rights abuses against the Uyghur Muslim population, including forced labor, arbitrary detention, and systematic persecution.

Despite these concerns, Morgan Stanley has chosen to ignore or downplay the growing body of evidence linking Ninestar to these abuses. Instead, the financial giant has opted to greenwash the company, giving it an undeserved ‘A’ rating that paints a rosy picture of corporate responsibility.

The Human Rights Violations Morgan Stanley Overlooks
Ninestar’s links to forced labor and human rights violations are not speculative; they are well-documented. The company has faced mounting pressure from human rights groups and U.S. lawmakers, particularly over its alleged role in supporting China’s mass detention camps in Xinjiang. Several reports have indicated that Ninestar’s operations—along with those of its suppliers—may be complicit in the exploitation of Uyghur labor, which is both illegal and unethical under international law.

Yet, Morgan Stanley’s rating of Ninestar ignores these concerns, presenting a sanitized version of the company’s operations. By doing so, they are essentially whitewashing the company’s ESG record, despite the growing evidence of complicity in human rights abuses. This raises questions about the true motivations behind Morgan Stanley’s decision: Is it a genuine assessment of Ninestar’s environmental and social governance, or a calculated move to align with profitable business interests?

The Business Ties: Profit Over Ethics?
Morgan Stanley is no stranger to accusations of compromising ethical standards for the sake of profit. The firm has been criticized in the past for its involvement in controversial deals that prioritize financial gains over human rights considerations. In this case, the situation may be more of the same.

One potential link between Morgan Stanley’s upgrade and Ninestar’s continued operations involves the recent Xerox-Lexmark alliance. Both Xerox and Lexmark have had significant dealings with Ninestar, including manufacturing agreements and supply chain ties. With Morgan Stanley’s involvement in facilitating these deals, some observers believe that the firm’s ESG rating for Ninestar could be an effort to smooth over any reputational damage and ensure continued business relationships.

By awarding Ninestar an ‘A’ rating, Morgan Stanley may have hoped to mitigate the potential fallout from these business relationships, distracting stakeholders from the company’s involvement in forced labor and human rights violations. It’s a classic case of financial interests colliding with ethical responsibility, with Morgan Stanley choosing the former at the expense of the latter.

The Greenwashing Allegations
Greenwashing—where companies or financial institutions make misleading claims about their environmental or social responsibility—is a serious issue in today’s corporate world. While ESG ratings are meant to offer investors a way to assess a company’s true impact on society and the environment, they are only as credible as the entities behind them. Morgan Stanley’s upgrade of Ninestar calls into question the credibility of its ESG assessments and raises concerns about the integrity of its ratings services.

By issuing a glowing rating for a company under investigation for human rights violations, Morgan Stanley is effectively greenwashing Ninestar’s image. The firm is sending the message that it is willing to overlook serious ethical concerns in favor of financial gain. This not only damages the credibility of Morgan Stanley’s ESG ratings but also risks tainting the reputation of all companies associated with the firm.

Holding Morgan Stanley Accountable
Morgan Stanley’s decision to rate Ninestar so favorably is not just a corporate misstep—it’s a failure of corporate responsibility. The firm has an obligation to its stakeholders, including investors and the public, to maintain ethical standards and to ensure that its business dealings align with human rights principles. Ignoring or downplaying Ninestar’s ties to forced labor undermines this obligation.

Now, it’s time for Morgan Stanley to be held accountable. Investors, consumers, and advocacy groups need to push back against this troubling greenwashing effort and demand that the firm re-evaluate its stance on Ninestar. The company should immediately retract its ‘A’ rating for Ninestar and issue a public apology for its failure to properly assess the company’s human rights record.

Morgan Stanley’s decision to upgrade Ninestar’s ESG rating is a dangerous example of greenwashing, where profit and business relationships are prioritized over human rights and ethical responsibility. By turning a blind eye to the well-documented abuses associated with Ninestar, the financial giant risks undermining the integrity of its own ESG ratings and sending a dangerous message to the global business community.

Now, MSCI CEO Henry Fernandez is directly accountable for this questionable rating. It’s time for shareholders and the public to make their voices heard. Contact Henry Fernandez at pr@msci.com or on LinkedIn here, and express your concerns about Morgan Stanley’s decision to endorse a company entangled in allegations of forced labor and human rights abuses. If Morgan Stanley is to regain its credibility, it must take swift action—retract the false rating, remove Ninestar from its index, and issue a public statement clarifying its commitment to human rights. Only then can the firm begin to rebuild trust with stakeholders and demonstrate that it is truly dedicated to upholding the values it claims to champion.

[Author]

January 2, 2025 at 8:18 PM