Why Tesla was kicked out of the S & P 500’s ESG index

Aerial view of the Tesla Fremont plant on May 13, 2020 in Fremont, California.

Justin Sullivan | Getty Images

The S & P 500 launched the electric vehicle manufacturer Tesla from the ESG Index as part of its annual list update. in the meantime, Apple, Microsoft, Amazon And even oil and gas are multinational Exxon Mobil It was still on the list.

The S & P 500 ESG Index uses environmental, social and governance data to rank companies and effectively recommend them to investors. The criteria include hundreds of data points per company related to how companies impact the planet and treat non-shareholder stakeholders such as customers, employees, vendors, partners, and neighbors. ..

The index changes took effect on May 2, and an index spokesperson explained why the changes were made. A blog post published on Wednesday.

Tesla’s “lack of low-carbon strategy” and “Code of Conduct”, along with racism and poor working conditions reported at Tesla’s factory in Fremont, California, said it affected scores. The handling of Tesla in the investigation by the National Highway Traffic Safety Bureau also weighed heavily on the score.

Tesla’s mission is to accelerate the transition to sustainable energy in the world, February of this year It settled with the Environmental Protection Agency after years of neglecting to track Clean Air Act violations and their own emissions.Tesla ranked 22nd last year Toxic 100 Air Pollutants Index, Edited annually by the U-Mass Amherst Political Economic Research Institute — worse than the ExxonMobil that came on the 26th. (The index uses the latest available 2019 data.)

Tesla First quarter filing The company is also investigating the handling of waste in California and has revealed that it will have to pay a fine in Germany if it fails to meet its domestic “recovery” obligations for used batteries.

Meanwhile, the California Department of Fair Employment and Housing has sued Tesla for harassment and discrimination against blacks at Fremont’s car factory. The agency routinely kept black workers in low-level roles in the company, giving them more physically demanding and dangerous missions, and they complained about racist slurs. He says he sometimes found evidence of retaliation against them.

last year, National Labor Relations Committee Tesla said he was also engaged in unfair labor practices.

“Tesla may be responsible for removing fuel-powered cars from the road, but when examined with a wider ESG lens, it lags behind its peers,” an S & P spokeswoman said. “.

Tesla CEO Elon Musk caught up with the index on Twitter Wednesday morning, stating that the S & P Global Rating was “incomplete” and boasts more than 90 million followers.

In a previous tweet about Mask, he wrote, “I’m more and more convinced that corporate ESG is an incarnation of the devil.”

Subsequent corporate impact reports Tesla wrote:

“Current environmental, social and governance (ESG) reports do not measure the extent of positive impacts on the world. Instead, they focus on measuring the dollar value of risk / return. Individual investors — Financial institutions that outsource funds to ESG funds for large investments — probably unaware that their money could be used to buy stock in companies that exacerbate climate change ..

In that report, Tesla argued that other automakers could achieve higher ESG ratings while continuing to build internal combustion engine vehicles with little reduction in greenhouse gas emissions.

Tesla shares were down more than 7% on Wednesday noon amid wide market sellouts. The company’s inventory has fallen by more than 30% this year.

Why Tesla was kicked out of the S & P 500’s ESG index

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