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Musk Lashes Out After Tesla Dropped From ‘Social Good’ Index

The Daily Beast logo The Daily Beast 5/18/2022 Noah Kirsch
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In predictable fashion, Elon Musk lashed out on Wednesday on Twitter—the social media platform he has perhaps pretended he will buy—to complain that Tesla has been dropped from a stock market index that includes companies committed to the environment, social concerns like diversity, and corporate governance.

“ESG is an outrageous scam!” Musk said, referring to the acronym that represents those factors. “It has been weaponized by phony social justice warriors,” he tweeted separately.

Musk followed up by posting a meme featuring Dwayne “The Rock” Johnson, with a caption that defined a company’s ESG score as “how compliant your business is with the leftist agenda.”

In a blog announcing this year’s updates to the list—known as the S&P 500 ESG Index—the business’ head of North American ESG Indices, Margaret Dorn, forecasted Musk’s professed outrage.

“How can a company whose self-declared mission is to ‘accelerate the world’s transition to sustainable energy’ not make the cut in an ESG index?” she wrote. “There are many reasons.”

To start, the electric carmaker’s ESG score fell in the bottom 25 percent of its industry peers, Dorn said, rendering it ineligible. The drop was partly explained by its scores related to “codes of business conduct,” its “handling” of a federal safety investigation after “multiple deaths and injuries were linked to its autopilot vehicles,” and allegations of “racial discrimination and poor working conditions at Tesla’s Fremont factory.”

“While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens,” Dorn wrote.

Video: How Elon Musk's Twitter takeover plans shook Wall Street and social media (CNBC)


Musk apparently didn’t buy that explanation, nor did he publicly respond to the nuances of the blog post. Instead, he tweeted that S&P Global Ratings “has lost their integrity.” He pointed out that the fossil fuel giant Exxon Mobil had made the cut, despite its poor environmental track record.

“Political attacks on me will escalate dramatically in coming months,” Musk added, seemingly in reference to the news.

Berkshire Hathaway, Johnson & Johnson, and Facebook’s parent company, Meta, were also dropped from the index.

Tesla has come under fire in recent months for its workplace conditions, particularly at its plant in Fremont, California. Earlier this year, the state’s Department of Fair Employment and Housing filed a lawsuit against Tesla, alleging that it had received “hundreds of complaints from workers” and found reason to believe that the Fremont plant is “a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion.”

Multiple employees have filed lawsuits of their own, including one former staffer, Owen Diaz, who won a $137 million verdict last year after alleging that his supervisors had taunted him with racial epithets. (The verdict was later reduced to $15 million.)

Diaz told The Daily Beast last fall that Musk had never reached out to apologize.

Tesla has called the California DFEH lawsuit “misguided,” emphasizing that it “opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints.”

Evidently, the bureaucrats at the S&P nonetheless see cause for concern.

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