Tesla has been removed the S&P 500 ESG Index on Tuesday as part of its fourth annual rebalance. The index is supposed to measure how a company or investment performs on environmental (E), social (S), and governance (G) standards, but has been criticized by Elon Musk recently as being “outrageously false.”
In a blog post announcing the rebalance, S&P Dow Jones Indices said that while Tesla’s score had remained relatively stable, it has fallen down the ranking due to other companies outperforming the electric automaker.
“Tesla was ineligible for index inclusion due to its low S&P DJI ESG Score,3 which fell in the bottom 25% of its global GICS® industry group peers.”
There were a number of reasons cited for Tesla’s removal from the index, including their “lack of [a] low carbon strategy and codes of business conduct,” “claims of racial discrimination and poor working conditions” at the Fremont factory, and how Tesla is handling the NHTSA investigations into its Autopilot system.
“While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens,” said Margaret Dorn, senior director and head of ESG indices for S&P Dow Jones in North America.
Naturally Elon Musk was quick to react to the announcement of Tesla’s removal, saying on Twitter “ESG is a scam” while noting that oil-giant Exxon was rated in the top ten of the index.
Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!
ESG is a scam. It has been weaponized by phony social justice warriors.
— Elon Musk (@elonmusk) May 18, 2022
Other companies removed from the index include Berkshire Hathaway, Johnson & Johnson and Meta, Home Depot, Chevron, Costco, Broadcom, Accenture, and Wells Fargo.
While Tesla is no longer on the list, it can be added back in its next annual rebalance, the group said.