Tesla booted from S&P 500 ESG index
barrons.com
barrons.com
Source: https://www.spglobal.com/spdji/en/documents/indexnews/announ...
Of course, as organizations see the public associates value w/ those terms they co-opt them and slap them as a label on whatever product they want you to buy. Then all they have to do is some hand waving to convince you their product is associated and furthers the goals of the ideals we recognize in the terms.
[1] https://en.wikipedia.org/wiki/Aswath_Damodaran
[2] "Doing good or Sounding Good: A Skeptical Look at ESG!", 2020 https://www.youtube.com/watch?v=Vs1g7Epp11w&ab_channel=Aswat...
[3] "An ESG Follow up: The Gravy Train (or circle) rolls on!", follow up from [2], 2021 https://www.youtube.com/watch?v=5H6_60Tv0i0&ab_channel=Aswat...
[4] https://aswathdamodaran.blogspot.com/2020/09/sounding-good-o...
>“For any element of an ESG score, whether it’s the E, S, or G, disclosure is hugely important,” Ray McConville, an S&P spokesman, told Barron’s via email. “If there isn’t a lot of information available, whether its publicly available information or information provided in our Corporate Sustainability Assessment survey, then that would negatively impact a score. So in the case of Tesla and others, the issue is partly a lack of disclosure.”
>One thing that might help Tesla is public relations. Tesla doesn’t have an active PR effort.Tesla's lack of a "low carbon strategy and codes of business conduct" together with "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" lowered its score.
Ah yes, but I bet the working conditions for the children in sweatshops making Nike's shoes have excellent working conditions! Or Apple it's well known that the people assembling the iPhones are so happy with their treatment they had to install "Happiness Nets" to catch workers as they leap from joy off the rooftops!
It is funny that Exxon made the list though.
I doubt the intent is to quiet Elon but most likely meant as a warning to other Plutocrats/CEOs to ensure they toe the line and stick to the script.
The G stands for governance, including: "Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights"[0].
Do you think Tesla is a model there?
[0]https://www.investopedia.com/terms/e/environmental-social-an...
The people pushing "ESG" anything only care about marketing some product to the virtue signalers.
I bet most people who buy this index see "ESG", pat themselves on the back and never even look at the component companies. Check it our for yourself: [0]
Apple, Exxon, JPMorgan in the top 10. Still think this is legit?
[0] https://cms.zerohedge.com/s3/files/inline-images/2022-05-18_...
This is an unfalsifiable claim without citing when Musk made the purported transgression.
I don't think it is TOO cynical to assume that often people do things based on some hidden motivation vs. their publicly stated reason.
Weigh my opinion however you'd like but the conclusion I made seems to fit quite well.
> toe the line and stick to the script
What message and what script? The whole purpose of the index is to make money. The movement and everyone in the movement gets paid $$$ if when you plot the ESG index and broad equities the ESG line comes out on top.
They build low quality cars that have high range and a pretty good charging network.
They have a self driving program that's basically going to kill people constantly.
Elon Musk is increasingly unhinged and unpredictable.
They were so close to being an amazing company. They nailed the direct to consumer sales piece, and the long range EV piece.
But culturally, it sounds like they are a nightmare to work for, and they are rapidly losing the lead they built themselves.
I don't want them to fail, I think there is still potential there, but watching Elon absolutely lose his mind that this is some sort of conspiracy makes it really hard for me to want them to succeed.
Panels are often misaligned. Leaks appear in the trunk spaces during rain. Software is often buggy leading to be unable to use A/C or other basic features. The list goes on. These aren't small quantities of cars almost all of them have to be serviced within a year unless the owner doesn't care.
We had to have our windshield replaced immediately because it didn't seal, then the automatic wipers stopped working. The door handles have been replaced at least four times. I've been locked in and out of the car because the handles wouldn't work. The software is full of memory leaks and crashes three dashboard and center console to black while driving. The threads and materials inside were pelt trimmed and didn't fit neatly. The front axle has needed to have shims replaced because turning the steering wheel was making loud popping noises... twice.
I've had superchargers not work, leaving me stranded.
I've been sent two recall notices (for different issues) that said, "sit tight, we'll contact you when parts arrive" but then they never contacted me. When I called to inquire, they said they'd have to charge me for a service visit, and it would be $200, and maybe I just didn't want to fix the issue?
I've had other recalls that did get fixed, at least.
My experience is hardly unique. The car is shoddily put together. And every service tech I've chatted with has said, "Full disclosure? They are running too lean in the factory, so some units just don't get finished right."
And that's to say nothing about the other issues people experience, like autopilot making bad decisions, or Tesla shipping their cars with demo chips, or dangerously bad welding.
Seems like you get a high ESG if you just check some boxes and play nice. Completely subjective/ridiculous metric.
Subtle and accurate.
[0] https://www.bloomberg.com/news/articles/2021-12-31/how-black...
ESG is a box-checking party. But it's a multi-trillion dollar one [1].
[1] https://www.bloomberg.com/company/press/esg-assets-rising-to...
Being in an index fund or not can do interesting things to a stock's price.
Tangent: I thought he didn't found it?
Though I am skeptical of the sourcing on that quote, given that Elon isn't listed as a founder neither on the official "origin story" page of Tesla nor in the wikipedia entry for the company.
With regards to "E" doesn't really matter if the CEO says that the company "is doing more for the environment than any other company ever" , people making such scores are paid to completely sidestep this sort of socio-political talk and just look at factories, their impact on the environent, plans to reduce waste, recycling etc.
An other thing that's important is a comprehensive plan which is put on paper and can be referred to in the future to evaluate if the company kept its promises or is lagging behind. Yeah...
These people at S&P, Moody, Fitch they are essentially faceless individuals who look at spreadsheets and numbers, he won't be able to pressure them into compliance like he does with people on twitter. Mostly because they aren't on twitter, don't care about politics, don't care about him, basically don't even care about ESG and just want to be paid as the number crunchers they are. In one word they are Musk' nemesis: a non-ideology driven number cruncher.
In some regards this is good, but my gut says this will generally benefit the companies that know how to play the game and manipulate / move just the right numbers to limit costs, but still end up on these lists.
If the oil is easily accessible such as the oil extracted by Aramco in Saudi Arabia or Bahrain (where you have to essentially just stick a straw in the sand and oil comes out), it's no wonder that the amount of emission to complete the process is far less than an energy intensive operation such as manufacturing an electric tank such as the Cyphertruck or to a lesser extent the Model Y.
Simple and farcical.
There is nothing to agree or disagree... it's simple physics. If we want to politicize physics then we can go forward and politicize physics too. But at least we should be conscious about it.
Like, if you make it harder for those who burn oil to raise capital, does that mean that there are fewer customers for the people who extract it? Does it hurt their profits?
Is this all passed on, magically, by the Efficient Market?
I suspect not.
2) Yes, it's exactly like that, punishing those who burn oil hurts those who mine oil, if it doesn't it only means that those who burn oil found a way to hide from ESG rating by becoming a private company and getting financed elsewhere eg. via private equity or using old fashioned bank loans and credit lines, or even by convincing clients to pay in advance or with less delay.
Actions and desires have consequences, the passion that people have for climate change has consequences, when you wanna get to zero you don't get to skip anything and even companies which people are emotionally attached to (such as Tesla) have to comply.
Seems to just make ESG look ridiculous.
Drug cartels rank high on my "Community Benefit Metric" because they provide jobs for the community and only do what they must to manufacture and sell drugs /s