ELON MUSK: "ESG Is the Devil" - Your Survival Guy

SpaceX Chief Engineer Elon Musk answers a question from the press in front of the Crew Dragon that is being prepared for the Demo-2 mission, at SpaceX Headquarters, Thursday, Oct. 10, 2019 in Hawthorne, CA. Photo credit: (NASA/Aubrey Gemignani)

You have been reading a lot in the news about Elon Musk lately. His leadership of Tesla, SpaceX, and now Twitter make him perhaps the most famous billionaire on earth. You would think that Musk’s most famous company, Tesla, which builds electric cars, would be a darling of environmentally focused investors, especially those pushing the “environmental, social, governance” (ESG) indices. Instead, Tesla has found itself being tossed from ESG funds, coincidentally as Musk has become more vocal in his criticisms of the left wing of American politics. Over the weekend, Musk responded to a tweet about Tesla’s removal from Standard & Poor’s ESG 500 index by writing, “ESG is the devil.” Bradford Betz reports for Fox Business:

Life Comes at You Fast. Slow It Down with My Friday Email. It’s Free.

Elon Musk evidently has a diabolical view of environmental, social and corporate governance – more commonly referred to as “ESG.”

His comments came in response to a Sunday Twitter post from small business expert and advisor Carol Roth.

ESG is the devil

— Elon Musk (@elonmusk) November 27, 2022

“Remember when @ElonMusk wanted to bring free speech to Twitter and then S&P removed Tesla from their ESG 500 index, but kept in Exxon?” Roth wrote. “ESG is business social credit. It’s a means to control capital, keep business people in line with the narrative, and, ultimately, control you.”

In characteristically brief fashion, Musk responded: “ESG is the devil.”

ESG refers to non-financial standards used by asset managers and investors in financial decision-making. ESG investing is sometimes referred to as sustainable investing or impact investing, and investors can use ESG standards and criteria to screen potential investments and monitor non-financial risks.

Earlier this year, Tesla was removed from the S&P 500’s ESG index. S&P Dow Jones Indices’ senior director and head of ESG indices Margaret Dorn said in a May blog post that Tesla was no longer eligible for inclusion in the index because its S&P DPJ ESG score had fallen into the bottom 25% of its global industry group peers despite remaining “fairly stable” year over year.

Factors that contributed to Tesla’s lower score include its lack of “low carbon energy and codes of business conduct.”

“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,” Dorn said.

For perspective on how strange the index model must be, ExxonMobil is one of its top ten constituents.

Your Survival Guy has been ringing the alarm bells about ESG for years. If you need a quick refresher on why, read here:

Action Line: Ask your advisor if your money is invested in any ESG funds. If so, ask them why. If you need help building a portfolio of individual securities that you control, click here to get in touch with me. Until then, click here to subscribe to my free monthly Survive & Thrive letter to get to know me better.

Bio
Latest Posts

E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.