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Elon Musk has slammed a widely-followed sustainability index after Tesla was removed from it over concerns about the company’s lack of low carbon strategy, allegations of racism and Autopilot deaths.
S&P Dow Jones Indices removed the electric carmaker from the S&P 500 ESG index on May 2, the company announced in a blog post Wednesday.
The index measures the ‘performance of securities meeting sustainability criteria.’
‘ESG’ stands for environmental, social and governance. The criteria is used by ‘socially conscious’ investors when deciding where to put their money, according to Investopedia.
Tesla remains on the regular S&P 500 index, which measures the largest companies in the US by market capitalization.
The index provider cited various issues at Tesla that significantly lowered its ESG score, including Autopilot technology that has been linked to at least 11 deaths since 2016.
Allegations of racism also contributed to the company’s removal. Last October, a jury awarded $137 million to a former contractor who called Tesla’s Fremont plant a ‘hotbed of racist behavior.’
Founder and CEO Elon Musk slammed the decision on Twitter, claiming that the index ‘has been weaponized by phony social justice warriors.’
S&P Dow Jones Indices removed Tesla from the S&P 500 ESG index after it failed to meet sustainability and social responsibility criteria. Above, the company’s HQ in Beijing, China
Tesla’s stock has fallen by nearly 29 percent in the past month, after founder Elon Musk filed a bid to buy Twitter for $44 billion
On Twitter, Musk added: ‘Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list! ESG is a scam.’
The de-listing is the latest blow to Tesla. The company’s stock has fallen by nearly 29 percent in the past month, after Musk announced plans to buy Twitter for $44 billion.
The move is ‘related to Tesla’s (lack of) low carbon strategy and codes of business conduct,’ the index said.
Even though Tesla is contributing to reducing emissions with its electric cars, its issues and lack of disclosures relative to industry peers should raise concerns for investors looking to judge the company across ESG criteria, said Margaret Dorn, the organization’s head of ESG indices for North America,
‘You can’t just take a company’s mission statement at face value, you have to look at their practices across all those key dimensions,’ she said.
S&P Dow Jones also blamed the company’s codes of business conduct, which it describes as ‘a company’s implementation, transparent reporting on breaches and the occurrence of corruption and bribery cases and anti-competitive practices.’
The index provider says Tesla is at risk of controversy after an analysis considered it’s ‘involvement in a controversial incident, identified two separate events centered around claims of racial discrimination and poor working conditions at Tesla’s Fremont factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles.
‘Both of these events had a negative impact on the company’s S&P DJI ESG Score at the criteria level, and subsequently its overall score.
‘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 ESG lens.’
Last October, a California jury awarded former Tesla contractor Owen Diaz (pictured) $137 million verdict after he sued alleging racial harassment at the Fremont factory
Black workers at Tesla’s Fremont factory (pictured) were regularly subjected to deeply offensive racial slurs and jokes by co-workers and managers, according to a complaint
Elon Musk and Tesla haven’t commented on the company being de-listed from a sustainability index used by ‘socially conscious’ investors. Above, Musk at the Met Gala on May 2
The National Highway Traffic Safety Administration has sent teams to 27 crashes involving Autopilot since 2016. The technology has been linked to at least 11 deaths.
The agency doesn’t publicize names of victims, though some have been revealed by local law enforcement and reported in media outlets.
Last October, a California jury awarded former Tesla contractor Owen Diaz a staggering $137 million verdict after he sued alleging racial harassment at the Fremont factory.
Diaz’s lawsuit described the Fremont, California, plant, as a ‘hotbed of racist behavior’ where he was subjected to daily racist abuse including the N-word over a course of 11 months from 2015 to 2016.
The 52-year-old contracted elevator operator claimed fellow employees drew swastikas and left racist graffiti around the plant, while he said one of his supervisors drew a person with a black face and a bone in his hair and wrote ‘booo,’ short for ‘jigaboo.’
The supervisor then allegedly told him ‘he couldn’t take a joke’ when Diaz confronted him. Diaz contended that none of his supervisors stepped in to stop the abuse.
Kevin Kish, the director of the California Department of Fair Employment and Housing (DFEH), said the agency had received hundreds of complaints from workers at the plant.
The agency filed a complaint against the company in February after it found evidence of ‘segregation and hostile work environment’ at the carmaker’s Fremont plant.
The DFEH ‘found evidence that Tesla’s Fremont factory is a racially segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay, and promotion’, Kish said in a statement reported by the Wall Street Journal and Bloomberg.
‘The facts on this case speak for themselves,’ Kish added.
Ahead of the filing, Tesla released a statement saying it ‘opposes all forms of discrimination and harassment’ and that it is committed to providing ‘a workplace that is safe, respectful, fair and inclusive.’
The family of 15-year-old Jovani Maldonado (pictured) has sued Tesla after he died in an Autopilot-involved accident
But according to the DFEH, workers at the factory would be ‘taunted by racial slurs and then baited into verbal and physical confrontations’ by non-black workers and would subsequently face disciplinary action.
The company’s Autopilot technology is also part of the reason it was removed from the ESG index.
Last October, the NHTSA demanded to know why Tesla hasn’t recalled cars with a suspected autopilot flaw that caused several crashes.
The agency’s investigation covered 765,000 vehicles and included almost everything that Tesla has sold in the US since the start of the 2014 model year up to that point.
In 2019, 15-year-old Jovani Maldonado was killed after a Tesla on Autopilot hit a Ford Explorer pick-up truck on a California highway, sending the truck rolling.
His family sued the electric car giant.
Last month, video emerged of a Tesla crashing into a $2m private yet while being ‘summoned’ across a Washington airfield by its owner.
The rogue Model Y kept on going after slamming into the Cirrus Vision at the airfield, believed to be in Spokane.
In January, California prosecutors filed charges against a man who allegedly ran a red light and killed two people in 2019 while driving a Tesla on Autopilot.
Kevin George Aziz Riad, 27, pled not guilty to two counts of vehicular manslaughter.
HisTesla Model S was moving at a high speed when it left a freeway and ran a red light before striking a Honda Civic on December 29, 2019, police said. The two people in the Civic died at the scene.
Experts calling it the first set of serious charges against someone using a widely available driver-assist system.
S&P Dow Jones says Tesla could still re-join the sustainability index in the future if it meets the requirements again.
History of fatal crashes tied to Tesla Autopilot
January 20, 2016 in China: Gao Yaning, 23, died when the Tesla Model S he was driving slammed into a road sweeper on a highway near Handan, a city about 300 miles south of Beijing. Chinese media reported that Autopilot was engaged.
Joshua D. Brown, 40, of Canton, Ohio died in an Autopilot crash in May 2016
May 7, 2016 in Williston, Florida: Joshua D. Brown, 40, of Canton, Ohio died when cameras in his Tesla Model S failed to distinguish the white side of a turning tractor-trailer from a brightly lit sky.
The NTSB found that the truck driver’s failure to yield the right of way and a car driver’s inattention due to overreliance on vehicle automation were the probable cause of the crash.
The NTSB also noted that Tesla Autopilot permitted the car driver to become dangerously disengaged with driving. A DVD player and Harry Potter movies were found in the car.
March 23, 2018 in Mountain View, California: Apple software engineer Walter Huang, 38, died in a crash on U.S. Highway 101 with the Autopilot on his Tesla engaged.
The vehicle accelerated to 71 mph seconds before crashing into a freeway barrier, federal investigators found.
The NTSB, in a preliminary report on the crash, also said that data shows the Model X SUV did not brake or try to steer around the barrier in the three seconds before the crash in Silicon Valley.
Crash scene photos show the wreck on March 23, 2018 in Mountain View, California
March 1, 2019 in Delray, Florida: Jeremy Banner, 50, died when his 2018 Tesla Model 3 slammed into a semi-truck.
NTSB investigators said Banner turned on the autopilot feature about 10 seconds before the crash, and the autopilot did not execute any evasive maneuvers to avoid the crash.
April 17, 2021 in Houston, Texas
A Tesla smashed into a tree and burst into flames in Texas, resulting in the deaths of two men – the car’s owner Doctor William Varner, and his pal Everette Talbot.
Police had said it was apparent that there was no one in the driver’s seat at the time of the crash in the wealthy The Woodlands neighborhood of Houston, on April 17.
But Tesla had refuted police’s claims, saying a deformed steering wheel suggested that someone was likely in the driver’s seat.
Varner, 59, and Talbot, 69, both died in the fatal crash when the Tesla Model S – bought second-hand off eBay in January – smashed into a tree and burst into flames.
Dr. William Varner, 59, and Everette Talbot, 69, both died in the fatal crash when the Tesla Model S smashed into a tree and burst into flames
May 5, 2021 in Los Angeles, California
Steven Michael Hendrickson, 35, was killed when his white Tesla Model 3 struck an overturned semi-truck at about 2.30am on May 5
Steven Michael Hendrickson, 35, was killed when his white Tesla Model 3 struck an overturned semi-truck at about 2.30am on May 5.
Before his death, the married father of two posted social media videos of himself riding in the electric vehicle without his hands on the wheel or foot on its pedal.
The crash happened on the 210 Freeway near Fontana, California – about 50 miles east of Los Angeles.
A preliminary investigation determined that the Tesla’s partially automated driving system called Autopilot ‘was engaged’ prior to the crash.
A spokesman added that no final conclusion had been reached on what exactly had caused the fatal crash – the 29th involving a Tesla to have been probed by federal agency the National Highway Traffic Safety Administration
The Mack truck, which the Tesla collided with, had crashed and overturned just five minutes earlier, blocking two lanes of the highway, according to a highway patrol report.
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