Unfortunately, Tesla boss Elon Musk may have misunderstood the meaning of ESG (environmental, social, and governance). CEO of Clarity AI, a technology company that provides sustainability assessment software.
In an interview last month on news Squawk Box Europe, Rebecca Minghella spoke about the confusion about what ESG means.
"A lot of investors think they can only focus on climate impact," he said. "Not just' lots of investors' - even Elon Musk is tweeting about it."
The same tweet also notes that ExxonMobil is "ranked among the world's top ten for environmental, social and governance (ESG) by the S&P 500, while Tesla is not on the list!" In addition, the oil and gas supermajor is listed as one of the "Top 10 Constituents by Index Weight". Like its CEO, Tesla has weighed in on the heated ESG debate. The Impact Report 2021 states: "The current ESG assessment methodology is fundamentally flawed. To achieve much-needed change, ESG must evolve to measure impact in practice."
"The current environmental, social, and governance (ESG) report does not measure the magnitude of the positive impact on the world," he added. "Instead, it concentrates on measuring the dollar value of risk/reward."
"Individual investors who entrust their money to ESG funds in large investment institutions - may not know that their money can be used to buy shares in companies that make climate change worse, not better."
