This month, the S&P Dow Jones Indices removed Tesla from its index, pulling the company from the list relative to its global industry peers. The company’s ESG score has remained relatively stable year-over-year. Still, the company’s slide was accompanied by a rise in the score of its entire industry group, Automobiles & Components. Although the company did not respond to a request for comment, Dow Jones pointed to several factors, including racial discrimination in the company’s flagship factory, poor working conditions, and deaths caused by the autopilot vehicle.
One reason why Tesla was removed from the ESG index is that it failed to disclose critical information about its operations. The ESG methodology does not consider the business side of Tesla but looks at its environmental policies and strategies. However, it has also criticized the company’s culture. According to the S&P 500, Tesla scored poorly on ecological assessments.
The S&P 500 index rebalances annually. Since Tesla has been removed from the S&P 500 ESG Index, it may yet get a second chance in the future. Other notable companies whose ESG ratings were released this month include Berkshire Hathaway, Accenture, Delta Air Lines, Chevron, and Home Depot.
The S&P 500 ESG index tracks companies according to social, environmental, and governance markers. The removal of Tesla from the S&P 500 ESG Index has left Elon Musk furious.