S&P ESG Index Boots Tesla Over Poor Working Conditions, ‘Lack of Low Carbon Strategy’
It appears that Tesla (NASDAQ: TSLA) lost its highly prized spot on the S&P 500’s ESG Index amid compounding accusations of poor working conditions and inadequate low-carbon initiatives.
As part of a routine annual update, the index booted Tesla from its list after the EV maker failed to meet criteria that even Apple, Microsoft, Amazon, and oil giant Exxon Mobil were able to adhere to. In a blog post published on Wednesday, the S&P 500 ESG Index cited the carmaker’s “lack of low-carbon strategy” and its “codes of business conduct” as the main reasons behind the boot, as well as accusations of poor working conditions and even racism against some employees.
“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,” said senior director and head of ESG indices for S&P Dow Jones in North America Margaret Dorn. “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,” added the spokesperson, referring to the S&P’s analysis.
Elon Musk, in response, did not seem too impressed with the S&P’s decision, taking to twitter to accuse the index of lacking integrity. Tesla followed up with a company impact report arguing that “current environmental, social and governance (ESG) reporting does not measure the scope of positive impact on the world. Instead, it focuses on measuring the dollar value of risk / return. Individual investors— who entrust their money to ESG funds of large investment institutions— are perhaps unaware that their money can be used to buy shares of companies that make climate change worse, not better.”
Information for this briefing was found via S&P 500 and twitter. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.