Elon Musk called a prominent index of socially responsible companies a “scam” on Wednesday after it dropped Tesla because of the way the carmaker handled accusations of racial discrimination at its factory in California.
The S&P 500 ESG Index, a listing of companies that meet certain environmental, social and governance standards, removed Tesla last month. But the decision to eject the world’s largest maker of electric vehicles from a club that includes oil producers like Exxon Mobil attracted little notice until S&P Global, which manages the index, offered an explanation this week.
S&P cited claims of racial discrimination and poor working conditions at Tesla’s factory in Fremont, Calif.. Those claims have prompted a California state agency to file a lawsuit, which Tesla is contesting. S&P said its decision was also influenced by Tesla’s handling of an investigation by the National Highway Traffic Safety Administration after multiple deaths and injuries were linked to the company’s driver-assistance system, known as Autopilot.
“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 E.S.G. lens,” Margaret Dorn, head of E.S.G. indices in North America at S&P, said in the firm’s explanation.