S&P Dow Jones Indices removed Tesla electric car maker from its S&P 500 ESG index, citing issues including racial discrimination and autopilot accidents, a move that sparked critical tweets from Tesla CEO Elon Musk.
Other factors that contributed to the measure, which took effect on May 2, included the lack of public details from Tesla about its low-carbon strategy or business codes of conduct, said Margaret Dorn, head of ESG indices. organization for North America in an interview.
While Tesla is helping to reduce emissions with its electric cars, Dorn said, its problems and lack of disclosure to industry colleagues should raise concerns for investors who want to judge the company on environmental, social, and governance criteria ( ESG).
“You can’t just take a company’s mission statement, but you have to look at its practices in all those key dimensions,” she said.
Tesla representatives did not immediately answer questions. But after the index changed, Tesla CEO Elon Musk wrote on Twitter on Wednesday that “ESG is a scam. It has been used by false social justice warriors. ”
The decision highlights a growing controversy over how to assess corporate performance.
Investors concerned with issues such as diversity and climate change have allocated money to funds using ESG criteria to choose actions, raising questions about how effectively the funds promote change or whether they have become too involved in policy-making.
S&P Dow Jones Indices is majority-owned by S&P Global Inc.
The Tesla exclusion was part of a group of changes to the S&P 500 ESG index, dated April 22, according to an announcement. Among the additions to the index was Twitter, the social networking platform with which Musk has a purchase agreement. Dorn and others did not immediately describe the reasons why Twitter was added.