Tesla Stock De-listed From Exchange For Socially Conscious Companies


Tesla, the automotive company with billionaire Elon Musk as CEO, has been removed from the S&P 500 ESG Index over problems including alleged racial discrimination at the company and wrecks involving vehicles from the company functioning on autopilot.

Per Margaret Dorn, who serves as S&P Dow Jones Indices’ head of ESG indices for North America, “Tesla’s lack of published details related to its low carbon strategy or business conduct codes” also helped make the case for removing the company from the index, as recapped by Reuters. “You can’t just take a company’s mission statement at face value, you have to look at their practices across all those key dimensions,” Dorn remarked. Dorn identified a dearth of those corporate disclosures compared to Tesla’s counterparts in the automotive industry, who it sounds like reveal more relevant information about themselves.

Predictably considering his penchant for public antics, Musk lashed out about Tesla’s removal from that S&P 500 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,” he tweeted. Musk seems to have misunderstood — or simply ignored — key details. The index does not rank Exxon in the place he claims. As summarized by CNBC, the index “uses environmental, social and governance data to rank and effectively recommend companies to investors,” and its “criteria include hundreds of data points per company.” ESG ratings are produced by other agencies, and Tesla doesn’t seem to have particularly spectacular showings elsewhere: MSCI puts Tesla at an “average” ESG rating, and the Sustainalytics unit at Morningstar pins the vehicle company with a “medium risk” rating.

Details associated with Tesla’s actual business practices are troubling. The California Department of Fair Employment and Housing — which has brought a lawsuit against Tesla over apparent discrimination and harassment at the company — says it uncovered indications the automaker “routinely” kept Black staff in low-level positions and tasked them with more “physically demanding” and even “dangerous” assignments, per CNBC. When Black employees brought up concerns about facing racist slurs on the job, that state agency also said it found evidence they faced retaliation. Tesla’s stock price has fallen over recent months, partly in tandem with a push by Musk to buy Twitter (although it remains unclear whether that deal will actually be finalized). After stock trading closed on Friday, Tesla’s stock value sat over 42 percent lower than it was six months ago. The continued decline could present serious problems for Musk’s Twitter deal: he “has leveraged much of his Tesla stock as collateral for his loans, making the recent economic downturn a particular issue for his bid,” The Washington Post reports.