Tesla Removed From S & p 500 Over Racism And Environmental Concerns
May 20,2022 | Chloe Lacour
On Wednesday (18th), S&P Dow Jones (DJI) updated its list of active companies in the S&P 500 and revealed that electric car maker Tesla is no longer on the company list. Despite the revelation yesterday, an Index spokesperson said the changes took effect on May 2.
The S&P 500 uses a variety of criteria to list companies, such as social, environmental, customer, employee, partner and investor treatment. The problem is that Tesla didn't pass the standard for several reasons, including allegations of racism, poor working conditions, and a lack of strategies to reduce carbon emissions.
Although the company makes vehicles that use electricity rather than fossil fuels, the company has not been very aggressive in its strategy to reduce carbon emissions, according to CNBC. Additionally, the California Department of Fair Employment and Housing sued Tesla for discrimination against people of color and harassment.
Tesla engages in unfair labor practices in 2021, according to NLRB
Tesla and Elon Musk's reaction
Evidence was found that Elon Musk's company ordered more physical and dangerous tasks for black workers while keeping them in lower positions, according to the U.S. agency -- the allegations were made at the factory in Fremont, California. Tesla and the founders were not happy with the move.
"While Tesla may have played a role in pushing gasoline-powered vehicles on the road, it has fallen behind its peers when scrutinized through a broader ESG lens," an S&P spokesman said.
Elon Musk promises to stay at Tesla 'as long as it works for the brand'
The electric car maker argued that even if the company earned a higher ranking in the index, other automakers would still rank higher. Musk said the index had lost its integrity and firmly believed that ESG was "the devil incarnate."
“Current Environmental, Social and Governance (ESG) reporting does not measure the degree of positive impact on the world. Instead, it focuses on measuring the dollar value of risk/reward.