The electric car manufacturer Tesla has been removed from the S&P 500 ESG stock index for allegedly sustainable investments. CEO Elon Musk (50) reacted immediately and in a tweet on Wednesday described the ESG investment category as a “swindle”. The tech billionaire also accused the index provider of having lost its integrity.
ESG stands for Environmental, Social, and Governance – this is the label used by the financial industry to offer investments in which criteria such as the environment, social issues and good corporate governance are to be given greater consideration.
S&P Dow Jones Indices explained the decision in a company blog. There are “many reasons” that Tesla – despite its self-declared mission to accelerate the transition to sustainable energy – no longer belongs in the S&P 500 ESG Index. These included allegations of racism and complaints about poor working conditions in Tesla’s US car factory and the handling of investigations Fatal accidents in connection with the “Autopilot” driving assistant
, explained S&P analyst Margaret Dorn. Nevertheless, Tesla’s sustainability ranking has remained relatively stable over the past year. But the rest of the auto industry has improved significantly, causing Tesla to slip in comparison.
Musk joined Twitter vent his anger that the largest US oil company ExxonMobil received a top rating from S&P as one of the ten best companies in terms of sustainability, while Tesla no longer even made it into the index. Tesla had previously criticized ESG criteria as “fundamentally flawed”.
ESG financial products have been criticized for some time. Common accusations from experts are, for example, that the market is not sufficiently regulated and that the label is more of a sales aid for the financial industry. Due to a lack of clear and uniform definitions of what actually counts as a sustainable investment, there is sometimes a suspicion of “greenwashing” in the corresponding investment funds, for example.