S&P 500 betrays own narrative to punish Elon Musk

The S&P 500 ESG Index went off script Wednesday when it deliberately excluded Elon Musk-owned Tesla Inc from the index, seemingly as a penalty for his political views. 

Environment, social and governance (ESG) is a form of grading companies by how compliant they are with moralistic criteria. For example, the more environmentally friendly or “racially inclusive” a company purports to be, the more virtuous it is and thus more worthy of investment. 

While the S&P 500 Index accommodates shareholder capitalism by listing the largest companies by market capitalization, the S&P 500 ESG Index accommodates stakeholder capitalism by listing companies who serve a more “virtuous” purpose. 

Despite Tesla Inc being one of the world's largest and most environmentally friendly car makers, the company did not make the list. 

Tesla’s electric cars have contributed to a significant reduction in carbon emissions and manufactures other products to help create sustainable energy. 

But unfortunately for Tesla, Elon Musk recently became a Republican. 

“In the past I voted Democrat, because they were (mostly) the kindness party,” the billionaire inventor wrote Wednesday. “But they have become the party of division & hate, so I can no longer support them and will vote Republican. Now, watch their dirty tricks campaign against me unfold …” 

The Tesla CEO is also in the midst of a deal to acquire Twitter in order to allow free speech on the platform, a move which has drawn heavy criticism from the Left. 

S&P defended its decision in a blog post, in part accusing Tesla of being racist. 

“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,” S&P Dow Jones ESG chief Margaret Dorn wrote, saying that Tesla had “two separate events centered around claims of racial discrimination”. She also accused Tesla of having poor working conditions at its Fremont factory and its handling of an investigation “after multiple deaths and injuries were linked to its autopilot vehicles.”  

Then she suggested that if Tesla behaves, it may make the list next year. 

“So, while Tesla and others may not have been included in the index this year, the beauty of the annual rebalance is that they will once again have an opportunity to be reviewed for inclusion in years to come,” she wrote. 

Instead, the index included ExxonMobil, which should have been excluded just for being an oil company. Oil corporations are reviled among ESG enthusiasts for being environment offenders. 

But not only is ExxonMobil an oil company, it has a long history of actively interfering with efforts to fight climate change. 

Yet, ExxonMobil made the S&P 500 ESG list. 

“ESG is a scam,” tweeted Musk. “It has been weaponized by phony social justice warriors."

“Stop the outrageous false ESG assessments, where Tesla gets a bad grade, but an oil company can get a good grade,” he wrote in another tweet. “Total gaming of the system!” 

He also mocked ESG scores as being a grading system for how compliant a company is with the Leftist agenda.

Billionaire Peter Thiel reportedly had similar thoughts about the ESG movement overall. 

"ESG is just a hate factory. It’s a factory for naming enemies, and we should not be allowing them to do that. When you think ESG, you should be thinking Chinese Communist Party." 

But others, like Blackrock CEO Larry Fink, support forcing virtue on companies. 

“You have to force behaviors, and at BlackRock, we’re forcing behaviors,” Fink said in 2017.