Tesla Inc [TSLA:US] has made a comeback in the S&P 500 ESG index, a market index focused on sustainable investing, after the electric car manufacturer provided environmental disclosures, as reported by Reuters on June 21. Last year, Tesla was removed from the index due to issues such as allegations of racial discrimination and accidents involving its autopilot vehicles. In response, CEO Elon Musk criticized ESG initiatives on Twitter [TWTR:US], referring to them as a “scam.” While Tesla’s re-inclusion in the index is largely symbolic, as the S&P 500 ESG index represents only about USD8bn in assets compared to the USD15.6tn in assets tracking the S&P 500 index, it does provide some confidence to investors that the company is relatively ESG-friendly.

As part of the annual rebalancing, Tesla was one of 39 companies added to the S&P 500 ESG index on May 1. Other additions included Chevron [CVX:US] and Fox [FOX:US], while companies like Exxon [XOM:US] and Oracle [ORCL:US] were removed. Neither Tesla, Chevron, nor Oracle provided comments on the matter, while Exxon and Fox declined to comment. An S&P spokesperson stated that Tesla performed better this year, particularly in terms of environmental factors, which hold significance for an automobile company. The spokesperson mentioned that Tesla provided information regarding its assessment of physical climate risks and its ESG considerations in supply chain management strategy.

Sources:

https://www.reuters.com/sustainability/tesla-returns-sp-500-esg-index-with-more-environmental-disclosures-2023-06-21/

https://sustainableinvest.com/tesla-now-eligible-for-addition-to-the-sp-500-esg-index/