8 ms·

Tesla booted from S&P 500 ESG index

68 points by enraged_camel 4y ago

Bubble_Pop_22 4y ago
"S&G" have always been weak points at Tesla. With regards to "E" doesn't really matter if the CEO says that the company "is doing more for the environment than any other company ever" , people making such scores are paid to completely sidestep this sort of socio-political talk and just look at factories, their impact on the environent, plans to reduce waste, recycling etc. An other thing that's important is a comprehensive plan which is put on paper and can be referred to in the future to evaluate if the company kept its promises or is lagging behind. Yeah... These people at S&P, Moody, Fitch they are essentially faceless individuals who look at spreadsheets and numbers, he won't be able to pressure them into compliance like he does with people on twitter. Mostly because they aren't on twitter, don't care about politics, don't care about him, basically don't even care about ESG and just want to be paid as the number crunchers they are. In one word they are Musk' nemesis: a non-ideology driven number cruncher.
- xur17 4y ago
  > These people at S&P, Moody, Fitch they are essentially faceless individuals who look at spreadsheets and numbers, he won't be able to pressure them into compliance like he does with people on twitter. In some regards this is good, but my gut says this will generally benefit the companies that know how to play the game and manipulate / move just the right numbers to limit costs, but still end up on these lists.
- melony 4y ago
  It also means that ESG becomes a metric to be gamed with plenty of energy industry companies on the index through clever financial engineering.
  - Bubble_Pop_22 4y ago
    Oil companies rank high on ESG metrics because they don't actually burn the petroleum oil that they extract. It's that simple. Maybe politics got people confused but it's the reality of facts. If you remove the politics from the equation as S&P, Moody, Fitch are required to do, then there is not much to discuss. It's simple physics. If the oil is easily accessible such as the oil extracted by Aramco in Saudi Arabia or Bahrain (where you have to essentially just stick a straw in the sand and oil comes out), it's no wonder that the amount of emission to complete the process is far less than an energy intensive operation such as manufacturing an electric tank such as the Cyphertruck or to a lesser extent the Model Y.
    - car_analogy 4y ago
      > Oil companies rank high on ESG metrics because they don't actually burn the petroleum oil that they extract. It's that simple. Simple and farcical.
    - im3w1l 4y ago
      Who decided that oil should be accounted for when it's burned and not when it's extracted? That is a choice, and it is a choice that benefit some people over others, and it's not a choice that most people would agree with.
      - Bubble_Pop_22 4y ago
        Because oil in a supertanker or a underground tank doesn't harm the environment. It's when oil is burned to produce energy + heat + quality of life + CO2 that the harm happens, in the form of the aforementioned CO2 There is nothing to agree or disagree... it's simple physics. If we want to politicize physics then we can go forward and politicize physics too. But at least we should be conscious about it.
        FooBarBizBazz 4y ago
        So do we think ESG scores get transitively priced in, the way carbon pricing should work? Like, if you make it harder for those who burn oil to raise capital, does that mean that there are fewer customers for the people who extract it? Does it hurt their profits? Is this all passed on, magically, by the Efficient Market? I suspect not.
dev_daftly 4y ago
- cr__ 4y ago
  What does this mean?
  - deleted 4y ago
    [deleted]
  - klyrs 4y ago
    It's a thought-terminating cliche.
  - LegitShady 4y ago
    its social credits for corporations. "parrot these ideas and we'll send investors your way who are expressly investing in your not because you're making a profit, but because you're saying the right things." It's not complicated.
    - unethical_ban 4y ago
      This, but it's a good thing. Or rather, less bad than investing in planet destroying technology just for max marginal profit.
      - LegitShady 4y ago
        nah, it legalized using client funds for the purpose of backing your political allies over profits. If you want to invest into a company you like go ahead, but fund managers and other fiduciaries should be required to prioritize profits for their clients over ESG goals. None of this is good for anyone except companies burning money but who can point to the DIE programs.
        Bubble_Pop_22 4y ago
        > but fund managers and other fiduciaries should be required to prioritize profits for their clients over ESG goals. But they are prioritizing profits. Companies which think they can ignore societal pressures get attacked by governemnts and attorney generals way more often, that's because politicians want to show their voters that they are out to enforce the societal pressures they care about. If all surveys show that climate change and societal equality are high on citizens priorities, then politicians and attorney generals who live and die due to such surveys will sniff non-compliance and attack the companies which are non-compliant, thus jeopardizing their profits. If companies want to run from ESG ratings they should stay private. You have private companies which sell 300bn worth of products and services per year so it can be done. People can invest in them indirectly via buying stocks/bonds of banks which loan them money
enjoyyourlife 4y ago
Phillips 66, a Petroleum refineries company, was recently added to the index Source: https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20220422-1451925/1451925_s&p500esgindexreview-apr-2022.pdf https://www.spglobal.com/spdji/en/documents/indexnews/announ...
- bequanna 4y ago
  "ESG" is like "BLM" in that most all of us agree with the ideas those words represent. Of course, as organizations see the public associates value w/ those terms they co-opt them and slap them as a label on whatever product they want you to buy. Then all they have to do is some hand waving to convince you their product is associated and furthers the goals of the ideals we recognize in the terms.
  - troon-lover 4y ago
  - deleted 4y ago
    [deleted]
qgin 4y ago
Not that I disagree, but the timing seems convenient to avoid TSLA’s imminent bear market slide.
- zydex 4y ago
  Who is this convenient for? Tesla is still a constituent of the S&P 500.
bequanna 4y ago
The weak attempt at justifying this move is telling and makes it very clear that this is political backlash in response to Musk going "off message". I doubt the intent is to quiet Elon but most likely meant as a warning to other Plutocrats/CEOs to ensure they toe the line and stick to the script.
- itsoktocry 4y ago
  >makes it very clear that this is political backlash in response to Musk going "off message". The G stands for governance, including: "Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights"[0]. Do you think Tesla is a model there? [0]https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp https://www.investopedia.com/terms/e/environmental-social-an...
  - bequanna 4y ago
    Ugh, please. There is no consistency in applying the standards that they themselves made up, which should tell you right away what a scam this is. Now they've weaponized it. The people pushing "ESG" anything only care about marketing some product to the virtue signalers. I bet most people who buy this index see "ESG", pat themselves on the back and never even look at the component companies. Check it our for yourself: [0] Apple, Exxon, JPMorgan in the top 10. Still think this is legit? [0] https://cms.zerohedge.com/s3/files/inline-images/2022-05-18_09-26-40.jpg?itok=F6lbvUNW https://cms.zerohedge.com/s3/files/inline-images/2022-05-18_...
  - SpicyLemonZest 4y ago
    I think that sounds like an extraordinarily broad set of criteria, which would make it very easy for ESG index providers to put their thumbs on the scale if they wanted to. In particular it seems impossible to numerically quantify the quality of Tesla's governance vs. that of Ford or General Motors, as S&P is claiming to do here.
    - bequanna 4y ago
JumpCrisscross 4y ago
Better link: https://www.indexologyblog.com/2022/05/17/the-rebalancing-act-of-the-sp-500-esg-index/ https://www.indexologyblog.com/2022/05/17/the-rebalancing-ac... Tesla's lack of a "low carbon strategy and codes of business conduct" together with "claims of racial discrimination and poor working conditions at Tesla’s Fremont factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles" lowered its score.
- baja_blast 4y ago
  > poor working conditions at Tesla’s Fremont factory Ah yes, but I bet the working conditions for the children in sweatshops making Nike's shoes have excellent working conditions! Or Apple it's well known that the people assembling the iPhones are so happy with their treatment they had to install "Happiness Nets" to catch workers as they leap from joy off the rooftops!
vanderZwan 4y ago
> Tesla (ticker: TSLA), a company that CEO Elon Musk says he founded to put the world on a path to a sustainable-energy future Tangent: I thought he didn't found it?
- hnaccount141 4y ago
  Correct. His first involvement was as an investor in their series A. He does, however, say[1] he's a co-founder, so I guess the quote is technically accurate. [1] https://www.tesla.com/elon-musk https://www.tesla.com/elon-musk
- filoleg 4y ago
  Technically no, you are correct. But realistically, one can totally reasonably try to make a claim that Elon was a founding member. The company was created in June 2003, and in February 2004 Elon already became the largest shareholder (which is just slightly over half a year later after the company was founded). And that's 5 years before they produced their first ever car (the original Roadster) and 7 years before their first mass produced car (Model S). Though I am skeptical of the sourcing on that quote, given that Elon isn't listed as a founder neither on the official "origin story" page of Tesla nor in the wikipedia entry for the company.
- na85 4y ago
  He didn't, he just pretends he did. Same as how he LARPs as an engineer for SpaceX.
  - deleted 4y ago
    [deleted]
qiskit 4y ago
Who cares? Nobody invests in tesla or index funds because of "ESG" scores. Nobody cares about the ESG index. Other than useless privileged people with too much time on their hands. If TSLA was removed from the SP500, that's news. Being removed from SP500 ESG isn't noteworthy in the slightest.
- PatentlyDC123 4y ago
  Could it be more about large institutional investors using ESG indexes in their products? Like BlackRock's ESG push [0]. Maybe I'm misinterpreting the value of the index for institutional investors, but I could see companies like Tesla disappointed that large funds might avoid investing in them based on listings like these. [0] https://www.bloomberg.com/news/articles/2021-12-31/how-blackrock-s-invisible-hand-helped-make-esg-a-hot-ticket https://www.bloomberg.com/news/articles/2021-12-31/how-black...
- JumpCrisscross 4y ago
  > Nobody invests in tesla or index funds because of "ESG" scores ESG is a box-checking party. But it's a multi-trillion dollar one [1]. [1] https://www.bloomberg.com/company/press/esg-assets-rising-to-50-trillion-will-reshape-140-5-trillion-of-global-aum-by-2025-finds-bloomberg-intelligence/ https://www.bloomberg.com/company/press/esg-assets-rising-to...
- HWR_14 4y ago
  AFAIK, some people put their money in the SP500 ESG, feel good that they are investing in ethical companies and use it as their preferred index fund. Being in an index fund or not can do interesting things to a stock's price.
ryzvonusef 4y ago
>“For any element of an ESG score, whether it’s the E, S, or G, disclosure is hugely important,” Ray McConville, an S&P spokesman, told Barron’s via email. “If there isn’t a lot of information available, whether its publicly available information or information provided in our Corporate Sustainability Assessment survey, then that would negatively impact a score. So in the case of Tesla and others, the issue is partly a lack of disclosure.” >One thing that might help Tesla is public relations. Tesla doesn’t have an active PR effort.
- robswc 4y ago
  This just demonstrates how silly ESG really is. Could really care less if a company has an active PR effort. Who even says that's a good thing? Can't count the number of tone deaf press releases that just make the company look stupid.
kklisura 4y ago
Aswath Damodaran [1] has some good takes on the ESG from finance/economic perspective: in video [2] [3] and text format [4]. [1] https://en.wikipedia.org/wiki/Aswath_Damodaran https://en.wikipedia.org/wiki/Aswath_Damodaran [2] "Doing good or Sounding Good: A Skeptical Look at ESG!", 2020 https://www.youtube.com/watch?v=Vs1g7Epp11w&ab_channel=AswathDamodaran https://www.youtube.com/watch?v=Vs1g7Epp11w&ab_channel=Aswat... [3] "An ESG Follow up: The Gravy Train (or circle) rolls on!", follow up from [2], 2021 https://www.youtube.com/watch?v=5H6_60Tv0i0&ab_channel=AswathDamodaran https://www.youtube.com/watch?v=5H6_60Tv0i0&ab_channel=Aswat... [4] https://aswathdamodaran.blogspot.com/2020/09/sounding-good-or-doing-good-skeptical.html https://aswathdamodaran.blogspot.com/2020/09/sounding-good-o...
belval 4y ago
These index tells you only that the company was willing to jump through a bunch of hoops to get approved. It's like "Top 100 employers" lists in various countries. It reminds me of the "Tethics" from the Silicon Valley show. Big companies will just get someone to write some non-binding stuff to get added. It is funny that Exxon made the list though.
zaptheimpaler 4y ago
Meanwhile Exxon is on the index? This reflects more poorly on the clowns who define/assign ESG scores than it does Tesla.
- yucky 4y ago
  The best part of this is that it finally and officially invalidates ESG as a useful metric. It's always been political, and now they can't pretend otherwise.
turtledove 4y ago
Tesla is on rocky footing, imo. I own a Tesla, and have for 8 years, but I'm not convinced I'd buy another. They build low quality cars that have high range and a pretty good charging network. They have a self driving program that's basically going to kill people constantly. Elon Musk is increasingly unhinged and unpredictable. They were so close to being an amazing company. They nailed the direct to consumer sales piece, and the long range EV piece. But culturally, it sounds like they are a nightmare to work for, and they are rapidly losing the lead they built themselves. I don't want them to fail, I think there is still potential there, but watching Elon absolutely lose his mind that this is some sort of conspiracy makes it really hard for me to want them to succeed.
- bhouston 4y ago
  And Elon Musk continually finds reasons to sell Tesla stock - most recently $10B that was going to be for buying Twitter, but maybe that now won't happen. It is quite likely that he will not put that money back into Tesla if Twitter acquisition doesn't happen.
- horns4lyfe 4y ago
  I drove a Tesla plaid model S recently, and I’d hardly call that a “low-quality” car, unless you’re very out of touch.
  - impulser_ 4y ago
    He's said build quality. Which is true. Ask anyone who works at a Tesla service shop. Panels are often misaligned. Leaks appear in the trunk spaces during rain. Software is often buggy leading to be unable to use A/C or other basic features. The list goes on. These aren't small quantities of cars almost all of them have to be serviced within a year unless the owner doesn't care.
    - turtledove 4y ago
      Not he, they. But yes, exactly. The cars feel amazing in demos, but given time in them... It's a whole different story.
otikik 4y ago
> Tesla (ticker: TSLA), *a company that CEO Elon Musk says he founded* Subtle and accurate.
deleted 4y ago
[deleted]
HWR_14 4y ago
Part of ESG is Governance. No matter what else you might say about Tesla, it's governance is "The CEO does whatever with no controls". That can be great if you think Musk should have that much power, or horrible if you don't. Every dictator had people who thought his autocratic rule was superior to democracy - and I'm sure for some individual dictators it is. But it's a shitty system once you remove the specific people.
robswc 4y ago
ESG reminds me of those awards that are basically pay to play. Seems like you get a high ESG if you just check some boxes and play nice. Completely subjective/ridiculous metric.

68 points by enraged_camel 4y ago

"S&G" have always been weak points at Tesla. With regards to "E" doesn't really matter if the CEO says that the company "is doing more for the environment than any other company ever" , people making such scores are paid to completely sidestep this sort of socio-political talk and just look at factories, their impact on the environent, plans to reduce waste, recycling etc. An other thing that's important is a comprehensive plan which is put on paper and can be referred to in the future to evaluate if the company kept its promises or is lagging behind. Yeah... These people at S&P, Moody, Fitch they are essentially faceless individuals who look at spreadsheets and numbers, he won't be able to pressure them into compliance like he does with people on twitter. Mostly because they aren't on twitter, don't care about politics, don't care about him, basically don't even care about ESG and just want to be paid as the number crunchers they are. In one word they are Musk' nemesis: a non-ideology driven number cruncher.

xur17 4y ago
> These people at S&P, Moody, Fitch they are essentially faceless individuals who look at spreadsheets and numbers, he won't be able to pressure them into compliance like he does with people on twitter. In some regards this is good, but my gut says this will generally benefit the companies that know how to play the game and manipulate / move just the right numbers to limit costs, but still end up on these lists.
melony 4y ago
It also means that ESG becomes a metric to be gamed with plenty of energy industry companies on the index through clever financial engineering.
- Bubble_Pop_22 4y ago
  Oil companies rank high on ESG metrics because they don't actually burn the petroleum oil that they extract. It's that simple. Maybe politics got people confused but it's the reality of facts. If you remove the politics from the equation as S&P, Moody, Fitch are required to do, then there is not much to discuss. It's simple physics. If the oil is easily accessible such as the oil extracted by Aramco in Saudi Arabia or Bahrain (where you have to essentially just stick a straw in the sand and oil comes out), it's no wonder that the amount of emission to complete the process is far less than an energy intensive operation such as manufacturing an electric tank such as the Cyphertruck or to a lesser extent the Model Y.
  - car_analogy 4y ago
    > Oil companies rank high on ESG metrics because they don't actually burn the petroleum oil that they extract. It's that simple. Simple and farcical.
  - im3w1l 4y ago
    Who decided that oil should be accounted for when it's burned and not when it's extracted? That is a choice, and it is a choice that benefit some people over others, and it's not a choice that most people would agree with.
    - Bubble_Pop_22 4y ago
      Because oil in a supertanker or a underground tank doesn't harm the environment. It's when oil is burned to produce energy + heat + quality of life + CO2 that the harm happens, in the form of the aforementioned CO2 There is nothing to agree or disagree... it's simple physics. If we want to politicize physics then we can go forward and politicize physics too. But at least we should be conscious about it.
      - FooBarBizBazz 4y ago
        So do we think ESG scores get transitively priced in, the way carbon pricing should work? Like, if you make it harder for those who burn oil to raise capital, does that mean that there are fewer customers for the people who extract it? Does it hurt their profits? Is this all passed on, magically, by the Efficient Market? I suspect not.

dev_daftly 4y ago

cr__ 4y ago
What does this mean?
- deleted 4y ago
  [deleted]
- klyrs 4y ago
  It's a thought-terminating cliche.
- LegitShady 4y ago
  its social credits for corporations. "parrot these ideas and we'll send investors your way who are expressly investing in your not because you're making a profit, but because you're saying the right things." It's not complicated.
  - unethical_ban 4y ago
    This, but it's a good thing. Or rather, less bad than investing in planet destroying technology just for max marginal profit.
    - LegitShady 4y ago
      nah, it legalized using client funds for the purpose of backing your political allies over profits. If you want to invest into a company you like go ahead, but fund managers and other fiduciaries should be required to prioritize profits for their clients over ESG goals. None of this is good for anyone except companies burning money but who can point to the DIE programs.
      - Bubble_Pop_22 4y ago
        > but fund managers and other fiduciaries should be required to prioritize profits for their clients over ESG goals. But they are prioritizing profits. Companies which think they can ignore societal pressures get attacked by governemnts and attorney generals way more often, that's because politicians want to show their voters that they are out to enforce the societal pressures they care about. If all surveys show that climate change and societal equality are high on citizens priorities, then politicians and attorney generals who live and die due to such surveys will sniff non-compliance and attack the companies which are non-compliant, thus jeopardizing their profits. If companies want to run from ESG ratings they should stay private. You have private companies which sell 300bn worth of products and services per year so it can be done. People can invest in them indirectly via buying stocks/bonds of banks which loan them money

enjoyyourlife 4y ago

Phillips 66, a Petroleum refineries company, was recently added to the index Source: https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20220422-1451925/1451925_s&p500esgindexreview-apr-2022.pdf https://www.spglobal.com/spdji/en/documents/indexnews/announ...

bequanna 4y ago
"ESG" is like "BLM" in that most all of us agree with the ideas those words represent. Of course, as organizations see the public associates value w/ those terms they co-opt them and slap them as a label on whatever product they want you to buy. Then all they have to do is some hand waving to convince you their product is associated and furthers the goals of the ideals we recognize in the terms.
- troon-lover 4y ago
- deleted 4y ago
  [deleted]

qgin 4y ago

Not that I disagree, but the timing seems convenient to avoid TSLA’s imminent bear market slide.

zydex 4y ago
Who is this convenient for? Tesla is still a constituent of the S&P 500.

bequanna 4y ago

The weak attempt at justifying this move is telling and makes it very clear that this is political backlash in response to Musk going "off message". I doubt the intent is to quiet Elon but most likely meant as a warning to other Plutocrats/CEOs to ensure they toe the line and stick to the script.

itsoktocry 4y ago
>makes it very clear that this is political backlash in response to Musk going "off message". The G stands for governance, including: "Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights"[0]. Do you think Tesla is a model there? [0]https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp https://www.investopedia.com/terms/e/environmental-social-an...
- bequanna 4y ago
  Ugh, please. There is no consistency in applying the standards that they themselves made up, which should tell you right away what a scam this is. Now they've weaponized it. The people pushing "ESG" anything only care about marketing some product to the virtue signalers. I bet most people who buy this index see "ESG", pat themselves on the back and never even look at the component companies. Check it our for yourself: [0] Apple, Exxon, JPMorgan in the top 10. Still think this is legit? [0] https://cms.zerohedge.com/s3/files/inline-images/2022-05-18_09-26-40.jpg?itok=F6lbvUNW https://cms.zerohedge.com/s3/files/inline-images/2022-05-18_...
- SpicyLemonZest 4y ago
  I think that sounds like an extraordinarily broad set of criteria, which would make it very easy for ESG index providers to put their thumbs on the scale if they wanted to. In particular it seems impossible to numerically quantify the quality of Tesla's governance vs. that of Ford or General Motors, as S&P is claiming to do here.
  - bequanna 4y ago

JumpCrisscross 4y ago

Better link: https://www.indexologyblog.com/2022/05/17/the-rebalancing-act-of-the-sp-500-esg-index/ https://www.indexologyblog.com/2022/05/17/the-rebalancing-ac... Tesla's lack of a "low carbon strategy and codes of business conduct" together with "claims of racial discrimination and poor working conditions at Tesla’s Fremont factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles" lowered its score.

baja_blast 4y ago
> poor working conditions at Tesla’s Fremont factory Ah yes, but I bet the working conditions for the children in sweatshops making Nike's shoes have excellent working conditions! Or Apple it's well known that the people assembling the iPhones are so happy with their treatment they had to install "Happiness Nets" to catch workers as they leap from joy off the rooftops!

vanderZwan 4y ago

> Tesla (ticker: TSLA), a company that CEO Elon Musk says he founded to put the world on a path to a sustainable-energy future Tangent: I thought he didn't found it?

hnaccount141 4y ago
Correct. His first involvement was as an investor in their series A. He does, however, say[1] he's a co-founder, so I guess the quote is technically accurate. [1] https://www.tesla.com/elon-musk https://www.tesla.com/elon-musk
filoleg 4y ago
Technically no, you are correct. But realistically, one can totally reasonably try to make a claim that Elon was a founding member. The company was created in June 2003, and in February 2004 Elon already became the largest shareholder (which is just slightly over half a year later after the company was founded). And that's 5 years before they produced their first ever car (the original Roadster) and 7 years before their first mass produced car (Model S). Though I am skeptical of the sourcing on that quote, given that Elon isn't listed as a founder neither on the official "origin story" page of Tesla nor in the wikipedia entry for the company.
na85 4y ago
He didn't, he just pretends he did. Same as how he LARPs as an engineer for SpaceX.
- deleted 4y ago
  [deleted]

qiskit 4y ago

Who cares? Nobody invests in tesla or index funds because of "ESG" scores. Nobody cares about the ESG index. Other than useless privileged people with too much time on their hands. If TSLA was removed from the SP500, that's news. Being removed from SP500 ESG isn't noteworthy in the slightest.

PatentlyDC123 4y ago
Could it be more about large institutional investors using ESG indexes in their products? Like BlackRock's ESG push [0]. Maybe I'm misinterpreting the value of the index for institutional investors, but I could see companies like Tesla disappointed that large funds might avoid investing in them based on listings like these. [0] https://www.bloomberg.com/news/articles/2021-12-31/how-blackrock-s-invisible-hand-helped-make-esg-a-hot-ticket https://www.bloomberg.com/news/articles/2021-12-31/how-black...
JumpCrisscross 4y ago
> Nobody invests in tesla or index funds because of "ESG" scores ESG is a box-checking party. But it's a multi-trillion dollar one [1]. [1] https://www.bloomberg.com/company/press/esg-assets-rising-to-50-trillion-will-reshape-140-5-trillion-of-global-aum-by-2025-finds-bloomberg-intelligence/ https://www.bloomberg.com/company/press/esg-assets-rising-to...
HWR_14 4y ago
AFAIK, some people put their money in the SP500 ESG, feel good that they are investing in ethical companies and use it as their preferred index fund. Being in an index fund or not can do interesting things to a stock's price.

ryzvonusef 4y ago

>“For any element of an ESG score, whether it’s the E, S, or G, disclosure is hugely important,” Ray McConville, an S&P spokesman, told Barron’s via email. “If there isn’t a lot of information available, whether its publicly available information or information provided in our Corporate Sustainability Assessment survey, then that would negatively impact a score. So in the case of Tesla and others, the issue is partly a lack of disclosure.” >One thing that might help Tesla is public relations. Tesla doesn’t have an active PR effort.

robswc 4y ago
This just demonstrates how silly ESG really is. Could really care less if a company has an active PR effort. Who even says that's a good thing? Can't count the number of tone deaf press releases that just make the company look stupid.

kklisura 4y ago

Aswath Damodaran [1] has some good takes on the ESG from finance/economic perspective: in video [2] [3] and text format [4]. [1] https://en.wikipedia.org/wiki/Aswath_Damodaran https://en.wikipedia.org/wiki/Aswath_Damodaran [2] "Doing good or Sounding Good: A Skeptical Look at ESG!", 2020 https://www.youtube.com/watch?v=Vs1g7Epp11w&ab_channel=AswathDamodaran https://www.youtube.com/watch?v=Vs1g7Epp11w&ab_channel=Aswat... [3] "An ESG Follow up: The Gravy Train (or circle) rolls on!", follow up from [2], 2021 https://www.youtube.com/watch?v=5H6_60Tv0i0&ab_channel=AswathDamodaran https://www.youtube.com/watch?v=5H6_60Tv0i0&ab_channel=Aswat... [4] https://aswathdamodaran.blogspot.com/2020/09/sounding-good-or-doing-good-skeptical.html https://aswathdamodaran.blogspot.com/2020/09/sounding-good-o...

belval 4y ago

These index tells you only that the company was willing to jump through a bunch of hoops to get approved. It's like "Top 100 employers" lists in various countries. It reminds me of the "Tethics" from the Silicon Valley show. Big companies will just get someone to write some non-binding stuff to get added. It is funny that Exxon made the list though.

zaptheimpaler 4y ago

Meanwhile Exxon is on the index? This reflects more poorly on the clowns who define/assign ESG scores than it does Tesla.

yucky 4y ago
The best part of this is that it finally and officially invalidates ESG as a useful metric. It's always been political, and now they can't pretend otherwise.

turtledove 4y ago

Tesla is on rocky footing, imo. I own a Tesla, and have for 8 years, but I'm not convinced I'd buy another. They build low quality cars that have high range and a pretty good charging network. They have a self driving program that's basically going to kill people constantly. Elon Musk is increasingly unhinged and unpredictable. They were so close to being an amazing company. They nailed the direct to consumer sales piece, and the long range EV piece. But culturally, it sounds like they are a nightmare to work for, and they are rapidly losing the lead they built themselves. I don't want them to fail, I think there is still potential there, but watching Elon absolutely lose his mind that this is some sort of conspiracy makes it really hard for me to want them to succeed.

bhouston 4y ago
And Elon Musk continually finds reasons to sell Tesla stock - most recently $10B that was going to be for buying Twitter, but maybe that now won't happen. It is quite likely that he will not put that money back into Tesla if Twitter acquisition doesn't happen.
horns4lyfe 4y ago
I drove a Tesla plaid model S recently, and I’d hardly call that a “low-quality” car, unless you’re very out of touch.
- impulser_ 4y ago
  He's said build quality. Which is true. Ask anyone who works at a Tesla service shop. Panels are often misaligned. Leaks appear in the trunk spaces during rain. Software is often buggy leading to be unable to use A/C or other basic features. The list goes on. These aren't small quantities of cars almost all of them have to be serviced within a year unless the owner doesn't care.
  - turtledove 4y ago
    Not he, they. But yes, exactly. The cars feel amazing in demos, but given time in them... It's a whole different story.

otikik 4y ago

> Tesla (ticker: TSLA), *a company that CEO Elon Musk says he founded* Subtle and accurate.

deleted 4y ago

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HWR_14 4y ago

Part of ESG is Governance. No matter what else you might say about Tesla, it's governance is "The CEO does whatever with no controls". That can be great if you think Musk should have that much power, or horrible if you don't. Every dictator had people who thought his autocratic rule was superior to democracy - and I'm sure for some individual dictators it is. But it's a shitty system once you remove the specific people.

robswc 4y ago

ESG reminds me of those awards that are basically pay to play. Seems like you get a high ESG if you just check some boxes and play nice. Completely subjective/ridiculous metric.