Tesla Inc TSLA CEO Elon Musk on Wednesday termed ESG or environmental, social and corporate governance ‘the devil’ and said that it is ‘used as a moral cloak to hide bad behavior.’
What Happened: “Any cause that makes it's virtue unquestionable will immediately be adopted by the unvirtuous,” the CEO wrote. The CEO was responding to a Twitter thread flagging how tobacco companies are ranked higher than Tesla in ESG ratings.
“How could cigarettes, which kill over 8 million a year, be deemed a more ethical investment than electric cars?” the user, also a reporter at ‘Free Beacon’, wrote. While Tesla has an ESG score of 37 out of 100 on S&P Global, Marlboro maker Philip Morris has a score of 84. The British American Tobacco has a ESG score of 94 on the London Stock Exchange and Tesla 65, the user wrote, attributing it to ‘Big Tobacco's corporate progressivism.’
ESG ratings include several variables including labor practices, carbon pledges, diversity trainings and human rights and companies can score points by ‘toeing the progressive line,’ the user said.
While a tobacco producer like Altria diversifies their corporate boards and invests in social justice initiatives, Tesla’s executive are ‘overwhelmingly’ white men and it fired its LGBT diversity officer last year, he added. Further, Philip Morris and British American Tobacco promote their scores on Bloomberg's Gender Equality Index which track progress towards equitable inclusion while Tesla doesn’t participate.
“An unusually green tobacco giant could score better than an electric carmaker with an all-male board, and corporations can earn points merely by setting water reduction targets or using “diverse” suppliers,” the user wrote.
Elon Musk responded to the thread and said that the LGBT diversity officer quit on good terms to the best of his knowledge but Tesla did not rehire for the position because it believes people should be judged by the quality of their work and not their sexual orientation.
The CEO also shared a snippet from the 2006 movie ‘Thank you for smoking’ in response to the thread and said, “We made a movie about that!”
Why It Matters: In May 2022, Tesla lost its spot on the S&P 500 ESG Index. Terming ESG ratings a ‘scam,’ Musk said it has been weaponized by ‘phony social justice warriors’.
“Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn't make the list!” Musk wrote while also adding that S&P Global ratings has lost its integrity. He also called the move a ‘clear case of wacktivism.’
In Its 2021 impact report, the EV maker itself contended that the current environment, social and governance (ESG) methodologies are fundamentally flawed and does not measure the scope of positive impact on the world.
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Read More: Elon Musk Recommends NACS As A Solution For Toyota’s Long Charging Times
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