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"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

"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.
        Bubble_Pop_22 4y ago
        1) So news dropped today which was a big red day across the board to begin with. So if we want to quantify let's ballpark the ESG drop news in a -1B marketcap? I remind you Tesla is (amazingly) a 750B company. If they think that a -1B on hugely red day can make it harder for them to raise capital, then they are better off closing shop on all their Gigafactories because evidently there is no point in continuing the enterprise 2) Yes, it's exactly like that, punishing those who burn oil hurts those who mine oil, if it doesn't it only means that those who burn oil found a way to hide from ESG rating by becoming a private company and getting financed elsewhere eg. via private equity or using old fashioned bank loans and credit lines, or even by convincing clients to pay in advance or with less delay. Actions and desires have consequences, the passion that people have for climate change has consequences, when you wanna get to zero you don't get to skip anything and even companies which people are emotionally attached to (such as Tesla) have to comply.

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.
      - Bubble_Pop_22 4y ago
        1) So news dropped today which was a big red day across the board to begin with. So if we want to quantify let's ballpark the ESG drop news in a -1B marketcap? I remind you Tesla is (amazingly) a 750B company. If they think that a -1B on hugely red day can make it harder for them to raise capital, then they are better off closing shop on all their Gigafactories because evidently there is no point in continuing the enterprise 2) Yes, it's exactly like that, punishing those who burn oil hurts those who mine oil, if it doesn't it only means that those who burn oil found a way to hide from ESG rating by becoming a private company and getting financed elsewhere eg. via private equity or using old fashioned bank loans and credit lines, or even by convincing clients to pay in advance or with less delay. Actions and desires have consequences, the passion that people have for climate change has consequences, when you wanna get to zero you don't get to skip anything and even companies which people are emotionally attached to (such as Tesla) have to comply.