Elon Musk blasted the methodology that evaluates corporations’ environmental, social, and governance criteria, pointing out that tobacco companies obtain higher ESG ratings than Tesla.
“Why ESG is the devil,” Tesla and SpaceX CEO Elon Musk tweeted in response to a Washington Free Beacon story by Aaron Sibarium.
ESG is a collection of standards used to evaluate company practises in terms of sustainability and ethics. Instead of just purchasing assets that they believe would provide the best returns, a rising number of financial-market participants employ ESG-based evaluations as a guide for socially responsible investing.
They frequently employ a 1-to-100 rating scale developed by research firms such as S&P Global and Morningstar.
However, detractors claim that the framework fosters “greenwashing” and fails to fairly grade firms based on their social achievements.
“From S&P Global to the London Stock Exchange, tobacco companies are crushing Tesla in ESG ratings,” Sibarium said in a tweet on Tuesday.
“How could cigarettes, which kill over 8 million people each year, be deemed a more ethical investment than electric cars?” he said.
According to Sibarium’s piece, S&P Global’s most recent ESG rankings gave EV maker Tesla a score of 37 – and tobacco giant Philip Morris an 84.
British American Tobacco received an ESG rating of 94 from the London Stock Exchange, whereas Tesla received a mediocre 65.