Elon Musk has lashed out at investment data firm S&P Global after it gave Tesla a lower Environmental Social Governance (ESG) score than Philip Morris International, the maker of Marlboro cigarettes.
Tesla’s CEO posted the comments on Twitter on Tuesday, writing, “Why ESG is the devil…” and shared an article criticizing the rating practice that rewards companies for hiring czars for inclusion.
Tesla has an overall low score of 37 out of 100 compared to Philip Morris International who has a score of 84.
This is despite the fact that cigarettes are responsible for 8 million deaths a year, as Tesla tries to protect the environment by facilitating the transition to renewable energy.
Musk has previously criticized the wake-rating practice of ESG scores, which encourage investors to put their money into supposedly responsible companies with a positive mission.
Elon Musk lashed out at S&P Global after it gave Tesla a lower ESG score than a tobacco company
Tesla scored poorly compared to cigarette makers British American Tobacco (88), Philip Morris International (84) and Imperial Brand (42). Other ‘sin stocks’ such as oil giant Shell scored higher. Musk’s Twitter also scored low.
The Twitter CEO called ESG a “scam” that is “armed by false social justice warriors” after oil company Exxon ranked in the top 10 of the S&P 500’s ESG index and Tesla was excluded in May 2022.
The S&P 500 rates companies out of 100 in each category to provide an overall sense of environmental, social and governance risks, opportunities and impacts.
Ratings may be based on factors such as gender diversity on the board, inclusion training, or participation in carbon offsetting initiatives.
Tesla has since been added to the index, allowing fund managers and retail investors to track the index to buy Tesla stock.
The electric car company, which describes its mission as “accelerating the world’s transition to renewable energy,” scored better on the environmental scale, with a score of 60.
However, Tesla only scored 20 for Social and 34 for Governance, which lowers the score.
By comparison, Philip Morris International, the makers of Marlboro cigarettes, scored 84, while rivals such as British-American tobacco scored 88.
Tesla has made negative headlines for its social practices such as reportedly laying off more than 30 employees in response to an action by the union earlier this year.
The workers at the Gigafactory 2 in Buffalo, New York, claim they were fired after the campaign, Tesla Workers United, was announced at the plant.
Arian Berek, one of the former staff, who is also a member of the organizing committee, stated in a press release at the time: ‘I feel blindsided, I got Covid and was out of the office, then I had to record a death.
“I went back to work, was told I was exceeding expectations and then Wednesday came. I strongly feel this is retaliation for the committee’s announcement and it is embarrassing.”
Tesla has not commented on the layoffs.
There has also been widespread criticism of the grueling conditions miners in the Democratic Republic of Congo must endure to mine cobalt needed for Tesla products.
A series of photos taken earlier this year from mines in the country, where 90 percent of the world’s cobalt is extracted and used to make electric batteries, raised uncomfortable questions, such as the use of child labour.
Cobalt is the chemical element found in almost every tech gadget that uses a lithium battery on the market today – a smartphone, tablet or laptop needs a few grams of it, while an electric vehicle needs 10kg.
Although tobacco companies are not included in the S&P 500’s ESG index like Tesla, they still receive an ESG rating from the organization.
The data points are used to determine your eligibility or exclusion from the index.
Some tobacco companies, despite being excluded, even score much higher than Tesla in the organization’s wake ratings.
Philip Morris International, the makers of Marlboro cigarettes, scored 84, while rivals such as British-American tobacco scored 88.
Cigarettes are still responsible for an average of eight million deaths each year, according to the World Health Organisationbut Philip Morris International scores high, 84 in the Social category and 83 in Governance.
Tesla’s CEO has previously criticized the wake-rating practice of ESG (Environmental, Social and Governance) scores.
Tesla scored 60 on the environmental scale, but only got 20 for social and 34 for governance
Philip Morris International, the makers of Marlboro cigarettes, scored 84 on the ESG rating
A sea of workers Shabara, one of the largest cobalt mines in the Democratic Republic of Congo, where hundreds of thousands of people are exposed every day to toxic chemicals during the extraction of the precious mineral
Children are not spared manual labor in the ‘artisanal’ mines of the DRC. Above, a child carries a sack of stones in Kapata, southwest of Kolwezi
Commentators have suggested that this could be in response to corporate initiatives such as empowering female tobacco farmers, which the company has boasted about in the past year. Performance Review.
Both Philip Morris International and British American tobacco also promote their scores on Bloomberg’s Gender Equality Index, in which Tesla does not currently participate.
A Philip Morris spokesperson told DailyMail.com that the company’s goal is to “achieve a smoke-free future by focusing our resources on developing, scientifically substantiating and responsibly commercializing smoke-free products that are less harmful than smoking, with the aim is to completely replace cigarettes as quickly as possible.’
As such, “the company’s approach to sustainability addresses its ESG priorities through eight impact-driven strategies.”
Another of Elon Musk’s companies, Twitter, scored very low on S&P Global’s ESG scale.
The social media site only scored 12 out of 100, with a score of 8 in the Social category.
The company’s reputation has been turned upside down since Musk bought the platform and became CEO last October, including mass layoffs and the revocation of previously agreed working arrangements.
Tesla and S&P Dow Jones Indices did not immediately respond to the request for comment.