Electric car maker Tesla has been removed from the S&P 500 ESG stock index for supposedly sustainable investments — much to the outrage of company founder Elon Musk. In a tweet on Wednesday, the Tesla boss described the ESG asset class as a “scam” and accused the index provider of having lost its integrity. In the company blog, however, he gave “many reasons” for the eviction.
ESG is the English abbreviation for Environmental, Social and Governance – under this label the financial sector offers investments in which criteria such as the environment, social issues and good corporate governance receive more attention. There are “many reasons” why Tesla — despite its self-proclaimed mission to accelerate the sustainable energy transition — no longer belongs in the S&P 500 ESG index, according to S&P Dow Jones Indices.
These include accusations of racism and complaints about poor working conditions at Tesla’s US auto plant and the handling of investigations into accidents, some of which have been fatal, related to the “Autopilot” driver assistant, explains S&P analyst Margaret Dorn. Despite this, Tesla’s sustainability ranking has remained relatively stable over the past year. But the rest of the auto industry has improved significantly, slipping Tesla in comparison.
Musk vented his anger on Twitter
Musk took to Twitter to express his anger that the largest US oil company ExxonMobil was topped by S&P as one of the top ten companies in sustainability, while Tesla was no longer even in the index. Tesla had previously criticized ESG criteria as “fundamentally flawed”.
ESG financial products have been criticized for some time. For example, common accusations made by experts are that the market is not regulated enough and that the label is more of a sales tool for the financial sector. Due to a lack of clear and uniform definitions of what actually counts as sustainable investment, there is sometimes a suspicion of ‘greenwashing’ in, for example, the investment funds concerned.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
