Elon Musk Calls ESG ‘An Outrageous Scam’ After Tesla Was Removed From Index

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Tesla CEO says S&P has ‘lost their integrity’; S&P cites Tesla’s carbon strategy, working conditions and claims of racial discrimination for removal

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“Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!” Mr. Musk, the world’s richest person, said on Twitter,

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“ESG is a scam,” he added. “It has been weaponized by phony social justice warriors.”

Exxon was not immediately available to comment.

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The tweets come after S&P Dow Jones Indices recently removed the electric-vehicle maker and several other companies from its ESG index as part of its yearly rebalancing. In an explanation of the move, the index operator said Tesla lagged its peers for a variety of reasons including its carbon strategy, working conditions and handling of a regulatory investigation.

“While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens,” S&P said in a blog post detailing the index changes.

An S&P didn’t comment on Mr. Musk specifically. “We would simply repeat the explanation laid out” that detailed changes to the index, the said.

S&P Dow Jones Indices is a joint venture between S&P Global Inc. and CME Group Inc. Dow Jones & Co., publisher of Businesshala, is not a stakeholder in the venture.

ESG investing has grown in popularity in recent years as investors look to put their money into more socially conscious companies. At the end of 2021, assets in ESG funds hit $2.74 trillion, Morningstar said. The popular three-letter acronym is a category that encompasses how companies perform in areas like diversity, their impact on the environment and more.

Mr. Musk, who has agreed to buy Twitter for $44 billion but has recently indicated the deal is “on hold,” said he thinks “political attacks on me will escalate dramatically in coming months.”

In a separate tweet he added that Tesla does “more for the environment than any company ever!” The comment included a meme that shows a person asking what an ESG score is, and another responding saying “it determines how compliant your business is with the leftist agenda.”

Mr. Musk followed that tweet with one saying he now plans to vote Republican after voting for Democrats in the past.

Tesla was the largest company left out of the ESG index when measured by its weighting in the S&P 500. Other companies bumped from the index include Johnson & Johnson and Meta Platforms Inc.,

For Tesla specifically, S&P said its lack of a low carbon strategy, claims of racial discrimination, poor working conditions at its Fremont factory and the handling of an investigation by regulators related to injuries and deaths tied to its vehicles.

The changes to the index were effective May 2, according to S&P.

Write to Allison Prang at [email protected]

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Credit: www.Businesshala.com /

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