S&P Dow Jones Indices has removed electric car maker Tesla Inc. from its widely followed S&P 500 ESG index, citing racial discrimination claims and issues related to its autopilot vehicle crashes, a move that provoked critical tweets from Tesla CEO Elon Musk on Wednesday.
Other contributing factors to the change, effective May 2, include the lack of published details about Tesla’s low-carbon strategy or business code of conduct, Margaret Dorn, head of the North American ESG Index, said in an interview.
While Tesla is contributing to reducing emissions with its electric vehicles, Dorn says its problems and lack of disclosure related to industry peers should raise concerns for investors seeking to judge the company by environmental, social and governance (ESG) standards.
“You can’t just take a company’s mission statement at face value, you have to look at their practices across all of those core dimensions,” he said.
Exxon has been ranked in the top ten for Environment, Social and Governance (ESG) by the S&P 500, while Tesla did not make the list!
ESG is a scam. It has been armed with fake social justice fighters.
– Elon Musk (lonelonmusk) May 18, 2022
Tesla’s representatives did not immediately respond to a request for comment. But after the index change, Tesla CEO Elon Musk tweeted Wednesday that “ESG is a scandal. It has been armed by fake social justice fighters.”
Corporate ESG underscores a growing debate back and forth on how to judge performance. Investors concerned about issues such as diversity and climate change have invested in funds using ESG criteria to select stocks, raising questions about how effectively funds promote change or whether they are too involved in policy-making.
S&P Dow Jones Indices Majority Owned by S&P Global Inc.
Tesla was removed from a group of changes to the S&P 500 ESG index as of April 22, according to an announcement. Among the additions to the index at the same time was Twitter Inc., a social media platform that has agreed to buy masks.
Dorn and others did not immediately elaborate on the reasons for adding Twitter.
(This story was not edited by NDTV staff and was automatically generated from a syndicated feed.)