Electric vehicle giant's CEO Elon Musk claims ESG has been 'weaponised by phony social justice warriors'
Tesla has been removed from the environmental, social and governance (ESG) sustainability version of the S&P 500 index, prompting the EV giant's billionaire CEO to describe ESG as "a scam".
In a blog post on the S&P website earlier this week posted by Margaret Dorn, head of ESG indices for North America, the stock market tracking company said the index had undergone its fourth reassessment.
However, she stated that Tesla was "ineligible for index inclusion" as its ESG score, as calculated by the group, had fallen to the bottom 25 per cent of its peer group.
S&P noted the sector the company sits in - automobiles and components - had experienced an "overall increase" in its average ESG score, while Tesla had remained stable.
Dorn flagged recent concerns relating to Tesla's working conditions, the handling of an investigation into deaths and injuries linked to its driver-assistance systems, a lack of low-carbon strategy and codes of business conduct.
Even so, Dorn concluded in the blog that the "beauty of the annual rebalance" meant Tesla and others would once again be eligible for inclusion in the future.
However, the decision prompted an angry response from Musk, who in a stream of Tweets yesterday evening claimed "ESG is a scam" that "has been weaponised by phony social justice warriors".
The CEO pointed out that oil giant Exxon was still rated inside the index's top ten, and claimed S&P Global Ratings "has lost their integrity". Other firms to make the top 10 of the index include technology giants Apple, Microsoft, Amazon and Alphabet.
Musk also posted a meme, alongside the widely disputed claim that Tesla is "doing more for the environment than any company ever".
Despite Tesla doing more for the environment than any company ever! pic.twitter.com/ImxrhnRepj— Elon Musk (@elonmusk) May 18, 2022
A version of this article originally appeared at Investment Week.