Tesla Removed From S&P 500 ESG Index

(RTTNews) - Electric car manufacturer Tesla Inc. (TSLA) has been removed from its widely-followed S&P 500 ESG Index, citing issues like racial discrimination claims and crashes linked to its autopilot vehicles. This move led to angry tweets from Tesla founder Elon Musk.

The back-and-forth underlays the growing debate about the metrics used to judge corporate performance on environmental, social and governance or ESG issues. Other factors to the changes, effective May 2, include Tesla's lack of published details related to its low carbon strategy or business conduct codes, said experts. Even though Tesla is contributing to reducing emissions with its electric cars, its other issues and lack of disclosures like other EV makers should raise concerns for investors looking to judge the company across environmental, social and governance (ESG) criteria, experts added.

Tesla representatives did not immediately respond to questions. Investors are concerned about issues like diversity and climate change have poured billions of dollars into funds using ESG criteria to pick stocks, prompting debate about how effectively the funds promote change or whether they push companies too much on issues that should be settled by government policy.

S&P Dow Jones Indices is owned majorly by S&P Global Inc. The removal of Tesla was among a group of changes made to the S&P 500 ESG Index dating from April 22, S&P Global said in a statement. Among the additions to the index at the same time was Twitter Inc, the social media platform Musk has stuck a deal to purchase. Dorn and others did not immediately describe the reasons Twitter was added.