Elon Musk Critical of ESG

Elon Musk Critical of ESG

On Twitter, Tesla CEO Elon Musk made critical comments as he shared an article which showed that tobacco companies like Philip Morris had higher ESG scores than the electric vehicle pioneer. Tesla was given an ESG score of 37 out of 100, while Philip Morris was scored an 84.

This isn’t the first time that Musk has spoken out against ESG. In addition to tobacco companies, Tesla also scored lower than fossil fuel companies like Shell and Exxon. Given the growth in ESG funds and influence of asset managers like Blackrock, stocks with higher ESG scores are the recipient of increased inflows.

However, this has also led to opposition as many see ESG rating as faulty and politically motivated. Additionally, companies are accused of ‘greenwashing’ or other behavior to game the ratings system to artificially boost ESG scores. 

For many, this is an indication that ESG investing is misguided as tobacco causes millions of deaths around the globe every year, and companies with a record of contributing to climate change are given better scores than Tesla which is leading the charge in making EVs more popular and cheaper.   

ESG proponents counter that Tesla scores well on environmental factors but falls short in terms of social and governance factors, leading to a poor overall score. 


Finsum: Elon Musk made critical comments about ESG investing following reports of tobacco companies and oil companies with higher ESG scores than Tesla.

 

  • esg
  • sustainability
  • investors

    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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