Elon Musk's electric carmaker Tesla was removed from the S&P 500 ESG Index on Wednesday in a move which, on face value, may seem surprising.
The updated list features global heavyweights such as Apple, Microsoft, Amazon and Alphabet, but the world's biggest EV manufacturer, whose self-declared mission is to “accelerate the world’s transition to sustainable energy” is absent.
Tesla's share price closed about 7 per cent lower on Wednesday to $709.81 and the company's stock price has declined 41 per cent year-to-date.
Its market value now is $735.4 billion, well below its $1 trillion market cap reached on October 25. The company is still the most valuable automaker in the world and eclipses the combined value of five of its biggest rivals: Toyota, Volkswagen, Daimler, Ford and General Motors.
In a blog post S&P explained its reasoning for excluding Tesla from the list, which measures the performance of securities based on environmental, social and governance criteria. Here are the key points:
So, why was Tesla left out?
There are a number of reasons, according to Margaret Horn, head of ESG Indices, North America, for S&P Down Jones Indices.
First, Tesla was ineligible for index inclusion due to its low S&P DJI ESG score, which fell in the bottom 25 per cent of its Global Industry Classification Standard (GICS) industry group peers, she said.
The company wasn't the only big-name to not make it - Warren Buffet's Berkshire Hathaway, healthcare product manufacturer Johnson & Johnson and Facebook owner Meta were also excluded.
Ms Horn explained that the GICS industry group in which Tesla is assessed (Automobiles & Components), experienced an overall increase in its average S&P DJI ESG Score. So, while Tesla's score remained "fairly stable", it moved down relative to its peers.
Factors contributing to its score include "a decline in criteria level related to Tesla’s (lack of) low carbon strategy and codes of business conduct", she said.
The low carbon strategy criteria focuses on companies’ strategies to reduce the carbon intensity of its car portfolio (efficient technologies), but also assesses its current portfolio exposure to regulatory risks.
"In addition, a Media and Stakeholder Analysis, a process that seeks to identify a company’s current and potential future exposure to risks stemming from its involvement in a controversial incident, identified two separate events centered around claims of racial discrimination and poor working conditions at Tesla’s Fremont factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles," she said.
"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 ESG lens."
How did Elon Musk respond to this?
Mr Musk isn't one to hold back his opinions and naturally voiced them on Twitter, the social-media microblogging company he’s agreed to buy for $44bn.
He said the index is a "scam", and that it has been "weaponised by phony social justice warriors".
To qualify his assertion he said "Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!"
Tesla has previously called ESG methodologies "fundamentally flawed".
Ms Dorn said the index aims to keep industries weighted the same as they are in the regular S&P 500 index "while enhancing the overall sustainability profile of the index." In practice that means it can keep oil companies while leaving out big players like Facebook parent Meta Platforms and Wells Fargo & Co.
Musk has had a bad week, financially...
With Tesla's stock tanking to the lowest level this year Mr Musk had $12.3bn wiped off from his wealth on Wednesday alone.
Mr Musk has lost $49bn since launching his bid for Twitter last month, partly as the wider market tumbled and as some investors in Tesla grew concerned over how he’d fund his offer for the social media company.
Still, he remains the world’s richest person, with a fortune of $209.9bn, according to the Bloomberg Billionaires Index, but has shaved $60.4bn off his wealth this year. Binance’s Changpeng Zhao has lost $81bn and Amazon's Jeff Bezos’s fortune has dropped by $62bn.
On Wednesday, Mr Musk said he will no longer support the US Democrat party and will back their Republican rivals.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
Europe's top EV producers
- Norway (63% of cars registered in 2021)
- Iceland (33%)
- Netherlands (20%)
- Sweden (19%)
- Austria (14%)
- Germany (14%)
- Denmark (13%)
- Switzerland (13%)
- United Kingdom (12%)
- Luxembourg (10%)
Source: VCOe
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Takreem Awards winners 2021
Corporate Leadership: Carl Bistany (Lebanon)
Cultural Excellence: Hoor Al Qasimi (UAE)
Environmental Development and Sustainability: Bkerzay (Lebanon)
Environmental Development and Sustainability: Raya Ani (Iraq)
Humanitarian and Civic Services: Women’s Programs Association (Lebanon)
Humanitarian and Civic Services: Osamah Al Thini (Libya)
Excellence in Education: World Innovation Summit for Education (WISE) (Qatar)
Outstanding Arab Woman: Balghis Badri (Sudan)
Scientific and Technological Achievement: Mohamed Slim Alouini (KSA)
Young Entrepreneur: Omar Itani (Lebanon)
Lifetime Achievement: Suad Al Amiry (Palestine)
Tips from the expert
Dobromir Radichkov, chief data officer at dubizzle and Bayut, offers a few tips for UAE residents looking to earn some cash from pre-loved items.
- Sellers should focus on providing high-quality used goods at attractive prices to buyers.
- It’s important to use clear and appealing photos, with catchy titles and detailed descriptions to capture the attention of prospective buyers.
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Torque: 390Nm
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'Nightmare Alley'
Director:Guillermo del Toro
Stars:Bradley Cooper, Cate Blanchett, Rooney Mara
Rating: 3/5
UAE currency: the story behind the money in your pockets
Racecard
6pm: Mina Hamriya – Handicap (TB) $75,000 (Dirt) 1,400m
6.35pm: Al Wasl Stakes – Conditions (TB) $60,000 (Turf) 1,200m
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7.45pm: Blue Point Sprint – Group 2 (TB) $180,000 (T) 1,000m
8.20pm: Nad Al Sheba Trophy – Group 3 (TB) $200,000 (T) 2,810m
8.55pm: Mina Rashid – Handicap (TB) $80,000 (T) 1,600m
COMPANY PROFILE
Company name: BorrowMe (BorrowMe.com)
Date started: August 2021
Founder: Nour Sabri
Based: Dubai, UAE
Sector: E-commerce / Marketplace
Size: Two employees
Funding stage: Seed investment
Initial investment: $200,000
Investors: Amr Manaa (director, PwC Middle East)
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
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GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
UAE SQUAD FOR ASIAN JIU-JITSU CHAMPIONSHIP
Men’s squad: Faisal Al Ketbi, Omar Al Fadhli, Zayed Al Kathiri, Thiab Al Nuaimi, Khaled Al Shehhi, Mohamed Ali Al Suwaidi, Farraj Khaled Al Awlaqi, Muhammad Al Ameri, Mahdi Al Awlaqi, Saeed Al Qubaisi, Abdullah Al Qubaisi and Hazaa Farhan
Women's squad: Hamda Al Shekheili, Shouq Al Dhanhani, Balqis Abdullah, Sharifa Al Namani, Asma Al Hosani, Maitha Sultan, Bashayer Al Matrooshi, Maha Al Hanaei, Shamma Al Kalbani, Haya Al Jahuri, Mahra Mahfouz, Marwa Al Hosani, Tasneem Al Jahoori and Maryam Al Amri
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The team
Videographer: Jear Velasquez
Photography: Romeo Perez
Fashion director: Sarah Maisey
Make-up: Gulum Erzincan at Art Factory
Models: Meti and Clinton at MMG
Video assistant: Zanong Maget
Social media: Fatima Al Mahmoud
COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
