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S&P Cuts World's Largest EV Maker From ESG Index, Musk Slams "Outrageous Scam"

Tyler Durden's Photo
by Tyler Durden
Wednesday, May 18, 2022 - 04:36 PM

The world’s largest and most-famous electric-vehicle maker has been removed from the ESG version of the S&P 500 Index.

Margaret Dorn, senior director and head of ESG indices for S&P Dow Jones in North America, said in a Tuesday blog post:

“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."

..."playing its part?"

The index provider also cited concerns related to working conditions and the firm’s handling of an investigation into deaths and injuries linked to its drive-assistance systems.

Here are the top holdings remaining in the index, including Exxon Mobil (fossil fuels), Apple (China slave labor), and Amazon (which is working against unions)...

And Tesla is worse than all of them?

This is not the first time we have discussed ESG and its surreal virtue-signaling claims:

Laughing To The Bank... Unfortunately, for investors, while these funds cost much more to own, their performance isn’t any better than just holding the substantially cheaper index fund. As shown, the correlation between Blackrock’s USA ESG fund and the S&P 500 Index is almost perfect.

10-day rolling returns correlation between SUSA and SPY. (Chart courtesy of Michael Lebowitz, CFA)

“These funds lately haven’t beat ­indices that are simply created to make you money and only do so when they pack themselves with high-flying tech names. Sounds good on paper — until you drill down.

For starters, such investing methods are highly political and veer far to the left. Companies often get good grades for supporting lefty causes such as Black Lives Matter. Oil companies like Exxon will get higher marks for building wind farms that produce energy inefficiently.

But here’s where Larry Fink and BlackRock still come out ahead: They have sensed that with all the media hype of ESG investing as the next frontier, they can also make a lot of money creating a new type of fund dedicated specifically to ESG — and then charge more for it.” – NY Post

In short, while Wall Street pushes out products to make “you” feel like you are socially responsible, they laugh all the way to the bank.

Tesla founder and CEO Elon Musk summed up the thoughts of many at this farcical decision:

"Outrageous Scam" indeed... we wonder if Tesla would still be in the index if Musk wasn't trying to bring free speech to Twitter?

As Musk added in a tweet shortly after... "Political attacks on me will escalate dramatically in coming months."

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