Tesla fan Cathie Wood on S&P ESG sacking: Ridiculous

Tesla is eliminated from the S&P ESG selection index
Different factors led to the expulsion
ARK Invest boss Cathie Wood finds sacking “ridiculous”

Tesla is no longer part of the S&P ESG selection index for sustainable investments. The news was announced on May 17th by S&P Dow Jones Indices and immediately justified in a blog post. In it, the head of ESG Indices, Margaret Dorn, lists various reasons that led to Tesla’s removal from the index. In general, when shifting the S&P ESG, “the further developing sentiment of an investor concerned about sustainability” was taken into account, among other things. Numerous big names from the market-wide US index S&P 500 made it back into the selection fund, such as Apple, Microsoft, Amazon, Alphabet (A&C) and NVIDIA. In addition to Tesla, however, there are other high-profile companies that have not been included in the ESG index, such as Berkshire Hathaway, Johnson & Johnson and Facebook parent Meta Platforms. However, Dorn took the time in the blog post to specifically address why the electric car maker was not selected for the S&P ESG this time.

The reasons for the Tesla eviction

The group in which Tesla is classified, “Automobiles & Components”, would have improved overall with its ESG score. But while Tesla’s score has remained “fairly stable” year-on-year, it has slumped in the ranking with other group peers. The reason for this is a decline in various criteria such as a lack of a low-carbon strategy and in the area of ​​codes of business conduct. In addition, there are some current and future sources of risk, such as involvement in controversial incidents. There have been allegations of ethnic discrimination and poor working conditions at Tesla’s Fremont factory. In addition, Dorn criticized in the blog post the handling of the electric car manufacturer with the investigation of the US traffic authority NHTSA regarding various accidents with Tesla’s driver assistance system “Autopilot”. As Dorn summarizes, “While Tesla has a role to play in getting gas-powered vehicles off the road, it has fallen behind compared to its peers when viewed through a broader ESG lens.” Of course, the US group would have the opportunity to get a place in the EGS selection index again with the next reallocation.

Tesla boss Elon Musk pbels on Twitter

Tesla boss Elon Musk was anything but enthusiastic about the decision of the S&P Dow Jones Indices. This is how he vented his frustration about being kicked out on his favorite platform, Twitter. He called ESG as a whole a “scam” and criticized the fact that the oil company ExxonMobil was among the top ten companies in terms of sustainability in the index.

Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didnt make the list!

ESG is a scam. It has been weaponized by phony social justice warriors.

– Elon Musk (@elonmusk) May 18, 2022

Musk is not alone in his opinion. ARK Invest boss Cathie Wood also expressed her displeasure with the decision via Twitter. She simply called the decision “ridiculous” and added that it was not worthy of an answer.

Ridiculous. Not worthy of any other response. https://t.co/zwISYknbKB

– Cathie Wood (@CathieDWood) May 19, 2022

ARK Invest boss calls decision “ridiculous”

The star investor has long been one of the biggest Tesla bulls and has invested in the electric car manufacturer with several of its ETFs. While the strong price performance of the electric car manufacturer in particular catapulted the ARK Invest flagship ETF ARK Innovation to unimagined heights last year, the fund, which is designed for growth companies, has already had to accept double-digit losses, which are not least due to the weak performance of the Tesla share. Nevertheless, Wood remains true to her investment strategy. As she recently told CNBC, she expects “spectacular returns” over the next few years. Now it only remains to be seen whether the star investor will be right with this bullish assessment.

Editorial office finanzen.net

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