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Musk: S&P 500 ESG a "scam" after Tesla kicked out

Musk: S&P 500 ESG a "scam" after Tesla kicked out

Tesla is no longer included in the S&P 500 ESG, one of the most widely followed equity indices that track the performance of 500 large companies based on environmental, social, and corporate governance criteria.

“A few of the factors contributing to its 2021 [ESG] Score were a decline in criteria level scores related to Tesla’s [lack of a] low carbon strategy and codes of business conduct,” wrote Maggie Dorn, senior director and head of ESG Indices, North America, at S&P Dow Jones Indices, in a blog post. 

“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.”

Dorn claims that “a decline in criteria-level scores” related to Tesla’s low-carbon strategy and its “codes of business conduct” were two of the factors that contributed to its exclusion.

Musk response

Tesla has been one of the most significant and profitable investments for Cathie Wood, the CEO of ARK Investment Management, whose belief in disruptive companies like Tesla helped propel her to Wall Street fame.

In response to the decision made by the management of the ESG indices, Tesla founder Elon Musk tweeted that the entire organisation is a scam.

“ESG is a scam,” Tesla founder Elon Musk tweeted in response; “It has been weaponized by phony social justice warriors.”

Wood’s terse response to news that the S&P 500 ESG Index has dropped Elon Musk’s electric-vehicle maker Tesla TSLA, -0.05 percent from its lineup as part of its annual rebalancing was “ridiculous.”