Why Elon Musk’s ESG Backlash Sparked a Nationwide Debate

Here’s what happened after the ESG ratings of the world’s largest electric vehicle manufacturer dropped.

esg-musk

While some are applauding S&P for taking the stand since Tesla has faulted on several E, S and G metrics, others are siding with Musk. (Source: Shutterstock.com)

When Tesla, the world’s leading maker of electric vehicles, was dropped last week from S&P’s ESG Index—which assesses companies’ sustainability efforts and corporate culture—it infuriated Tesla’s CEO Elon Musk, who immediately took to Twitter to call ESG a “scam” that is “weaponized by phony social justice warriors.”

In its defense, S&P clarified that Tesla’s lack of published details related to its “low carbon strategy” or “codes of business conduct” contributed to its departure from the index and even though Tesla’s products help reduce overall carbon emissions, the company has faulted for claims of racial discrimination and poor working conditions.

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Faiza Rizvi

Faiza Rizvi is a senior editor of ESG for Hart Energy's editorial department, with a strong focus on E&P Plus and HartEnergy.com. She has been covering all facets of the U.S. and international energy industry for over 5 years.