S&P cited racial discrimination claims in deciding to exclude the electric carmaker from a listing of socially responsible companies.
Elon Musk called a prominent index of socially responsible companies a “scam” on Wednesday after it dropped Tesla because of the way the carmaker handled accusations of racial discrimination at its factory in California. The S&P 500 ESG Index, a listing of companies that meet certain environmental, social and governance standards, removed Tesla last month. But the decision to eject the world’s largest maker of electric vehicles from a club that includes oil producers like Exxon Mobil attracted little notice until S&P Global, which manages the index, offered an explanation this week. S&P cited claims of racial discrimination and poor working conditions at Tesla’s factory in Fremont, Calif. Those claims have prompted a California state agency to file a lawsuit, which Tesla is contesting. S&P said its decision was also influenced by Tesla’s handling of an investigation by the National Highway Traffic Safety Administration after multiple deaths and injuries were linked to the company’s driver-assistance system, known as Autopilot.
“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 E.S.G. lens,” Margaret Dorn, head of E.S.G. indices in North America at S&P, said in the firm’s explanation. Tesla stock was the fourth most heavily weighted in the index before it was removed, behind Apple, Microsoft and Amazon. Funds that track the index were obligated to own Tesla shares when it joined the index in May 2021 and to sell them when it was booted off. Exxon Mobil is the ninth most heavily weighted stock in the index, prompting a blast from Mr.
