'ESG is a scam’: Elon Musk after S&P500 removes Tesla from list 

Tesla CEO and billionaire entrepreneur Elon Musk has called out the global rating agency S&P for removing the automaker from its environmental, social and governance (ESG) list. Musk called these lists a “scam” and claimed that they “have been weaponised by phony social justice warriors.” 

Musk tweeted, “Exxon is rated top ten best in world for environment, social and governance (ESG) by S&P 500, while Tesla didn’t make the list! ESG is a scam. It has been weaponised by phony social justice warriors. S&P Global Ratings has lost their integrity.” 

He also tweeted a meme on ESG scores and wrote, “Despite Tesla doing more for the environment than any company ever.” In the meme shared by Musk, the car driver asks a passenger what does an ESG score mean. The passenger replies, “It determines how compliant your business is with the leftist agenda.” 

For the unversed, the global rating agency removed Tesla from its ESG list citing issues related to racial discrimination , crashes linked to its autopilot vehicles and lack of published details related to its low carbon strategy or business conduct codes, according to S&P500’s Margaret Dorn.  

As per S&P500, “Tesla was ineligible for index inclusion due to its low S&P DJI ESG score, which fell in the bottom 25 per cent of its GICS industry group peers. It joins Berkshire Hathaway, Johnson and Johnson and Meta, which have once again met their index methodology’s chopping block.” 

It added, “A few of the factors contributing to its 2021 S&P DJI ESG Score were a decline in criteria level scores related to Tesla’s (lack of) low carbon strategy and codes of business conduct.”  

The S&P also noted, “In addition, a Media and Stakeholder Analysis, a process that seeks to identify a company’s current and potential future exposure to risks stemming from its involvement in a controversial incident, identified two separate events centered around claims of racial discrimination and poor working conditions at Tesla’s Fremont factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles. Both these events had a negative impact on the company’s S&P DJI ESG score at the criteria level, and subsequently its overall score.” 

The rating agency underscored, “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.” 

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