S&P Dow Jones Indices finally brought back America’s leading electric automaker Tesla in its S&P 500 Environmental, Social, and Governance (ESG) index on April 21, 2023.
However, it is interesting to note that the index did not announce the significant changes in the list as opposed to its high-profile removal of Tesla in 2022.
What’s the big deal?
Some Tesla investor and fans expressed their disappointment towards S&P Global Ratings, pointing out its “quiet” approach in acknowledging Tesla again for the S&P 500 ESG index.
In hindsight, S&P generated a lot of media attention when it dropped Tesla from the index in May 2022, citing a “decline in criteria level scores related to Tesla’s (lack of) low carbon strategy and codes of business conduct.” It even accused the automaker of serious matters involving the Fremont factory and Autopilot on the agency’s May 17, 2022 blog post.
“A Media and Stakeholder Analysis, a process that seeks to identify a company’s current and potential future exposure to risks stemming from its involvement in a controversial incident, identified 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 vehicles. Both of these events had a negative impact on the company’s S&P DJI ESG Score at the criteria level, and subsequently its overall score.”
S&P (via a blog post)
Many were stunned, particularly Tesla fans, as the automaker is undoubtedly a significant contributor to the world’s transition to sustainability. Despite that, the Musk-led company earned a poor ESG score of 37, “effective prior to the open of trading on May 1, 2023,”
Meanwhile, a tobacco firm, Philip Morris, had a high score of 84 points. This comparison sparked mistrust of the index’s credibility.
Some EV enthusiasts, including a Twitter user @ alex_avoigt, even called ESG a “scam.”
See Also:
- Elon Musk furies after Tesla removed from S&P 500 ESG Index
- Tesla, BYD dominate the global EV industry, while Japanese rivals lag behind
- Tesla secures top four spots in most-driven electric cars survey
- Tesla Model Y advances as the world’s best-selling car in Q1 2023
- Tesla obtains key endorsement for Full Self-Driving in China
Nonetheless, these protests from EV enthusiasts demonstrate Tesla’s reputation for developing products that benefit the environment. The automaker has established an entire ecosystem that customers may use to significantly lower their carbon impact. Customers who use solar energy may charge their cars, power their homes, and do all this without emitting carbon dioxide.
