Tesla Inc has been excluded from S&P Dow Jones Indices’ widely watched S&P 500 ESG Index, citing issues such as racial discrimination accusations and crashes tied to its autopilot vehicles, a move that provoked a series of angry tweets from Tesla CEO Elon Musk. Tesla’s lack of disclosed details relating to its low-carbon plan or business behaviour norms were also significant factors, according to Margaret Dorn, the organization’s head of ESG indices for North America, in an interview.
- Even if Tesla’s electric cars help to reduce emissions, Dorn believes that the firm’s flaws and lack of disclosures in comparison to industry rivals should raise concerns for investors evaluating the company based on environmental, social, and governance (ESG) standards.
- Tesla officials did not react to inquiries right away. Tesla CEO Elon Musk, meanwhile, tweeted on Wednesday after the index revisions that ESG is a hoax. Fake social justice warriors have turned it into a weapon.
- The back-and-forth highlights a growing debate over how to assess business ESG performance. Investors worried about issues such as diversity and climate change have poured money into funds that buy companies based on ESG criteria, raising questions about how effective the funds are at promoting change and if they have become too involved in policymaking.