Tesla removed from S&P 500 ESG index, angering Musk

May 18 (Reuters) – S&P Dow Jones Indices has removed electric car maker Tesla Inc (TSLA.O) from its widely followed S&P 500 ESG Index (.SPXESUP), citing issues including allegations of racial discrimination and crashes linked to its Autopilot vehicles, a move that prompted harsh tweets from Tesla CEO Elon Musk on Wednesday.

The back and forth underscores the widening debate about the metrics used to judge corporate performance on environmental, social and governance (ESG) issues, a growing area of ​​investing.

Other factors contributing to the changes, as of May 2, include Tesla’s lack of published details about its low-carbon strategy or codes of business conduct, said Margaret Dorn, head of S&P’s ESG indices. Dow Jones Indices for North America, in an interview.

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Even though Tesla is helping to reduce emissions with its electric cars, Dorn said, its other issues and lack of disclosure compared to industry peers should raise concerns for investors looking to judge the company on criteria. environmental, social and governance (ESG).

“You can’t just take a company’s mission statement at face value, you have to look at their practices in all of these key dimensions,” she said.

Tesla representatives did not immediately respond to questions. But after the index changes, Tesla CEO Elon Musk tweeted on Wednesday that “Exxon is ranked among the top ten in the world for Environmental, Social and Governance (ESG) by the S&P 500, while Tesla wasn’t on the list! ESG is a scam. It’s been weaponized by fake social justice warriors.”

Asked about the tweet, a representative for the index provider said Musk may have been referring to a list on a corporate blog of the ten largest constituents by market capitalization of the S&P 500 ESG Index after Tesla pulled out. and others. The list is “not a ranking of the best companies by ESG score,” the representative said.

Exxon now represents 1.443% of the weight of the index. Apple Inc was the largest with 9.657%.


Investors concerned about issues such as diversity and climate change have invested billions of dollars in funds using ESG criteria to select stocks, sparking debate about how effectively funds promote change or they push business too hard on issues that should be settled by government policy.

S&P Dow Jones Indices is majority owned by S&P Global Inc. (SPGI.N)

The removal of Tesla was part of a group of changes made to the S&P 500 ESG index dated April 22, according to an announcement. Among the additions to the index at the same time was Twitter Inc (TWTR.N), the social media platform that Musk has under contract to buy.

Dorn and others did not immediately describe why Twitter was added.

Last year, the National Highway Traffic Safety Administration (NHTSA) launched a formal safety investigation into Tesla Inc’s Autopilot driver assistance system after a series of crashes involving Tesla models and emergency vehicles . [nL4N2R92KC]

In February, Read More, a California state agency sued Tesla over allegations by black workers that the company condoned racial discrimination at an assembly plant, adding to allegations made in several other lawsuits. Read more

A shareholder proposal asking Tesla to disclose detailed data on its diversity and inclusion efforts last year won majority support. Read more

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Reporting by Ross Kerber; Editing by Pete Henderson and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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