Elon Musk made news this past week (again) by castigating the S&P Index for removing Tesla from its index of ESG-approved stocks. “ESG is a scam,” he tweeted. “It has been weaponized by phony social justice warriors.” ESG refers to whether a company is sufficiently active in the areas of “environmental, social, and governance.”
Here’s the story from Ross Kerber and Hyunjoo Jin of Reuters:
“An S&P Dow Jones Indices executive told Reuters on Wednesday it has removed electric carmaker Tesla Inc (TSLA.O) from the widely followed S&P 500 ESG Index (.SPXESUP)because of issues including claims of racial discrimination and crashes linked to its autopilot vehicles, and Tesla CEO Elon Musk responded with harsh tweets including that ‘ESG is a scam.’
“In its changes, effective May 2, the sustainability index also added soon-to-be-Musk-controlled Twitter Inc (TWTR.N) and oil refiner Phillips 66 (PSX.N) while dropping Delta Air Lines and Chevron Corp, according to an announcement.”
This blog has raised questions about ESG for a number of months. For example: In February, we reported on a growing backlash against financially discriminating against companies on the basis of a dubious index. In January, we quoted Alex Epstein of RealClearEnergy who called ESG an ” immoral and financially ruinous movement that is destroying the free world’s ability to produce low-cost, reliable energy.”
Today (May 20) Simon Jessop and Ross Kerber of Reuters discussed “how confusion still reigns over how many investors and executives view the industry.”
Image of Elon Musk is by Timusu of Pixabay.