Tesla urges large funds to stop misleading investors and change their ESG valuation of companies. This will prevent a situation where investors who seek to invest only in environmentally friendly companies will actually invest in companies that pollute the environment.

Tesla published the 2021 Impact Report, which raised the issue of ESG (Environmental, Social, and Governance). The manufacturer explained that the current ESG reports do not measure the magnitude of the positive impact on the world, which is the biggest mistake. Instead, it focuses on measuring the dollar value of risk/return. The problem is that individual investors who trust their money to ESG funds of large investment institutions may not be aware that they can be used to buy shares in companies that worsen rather than improve climate change.

As an example, Tesla cites measuring the impact of the automotive industry. While the average investor might think that the more electric vehicles an automaker sells, as a percentage of total volumes, the better its ESG score, but the reality is different. As long as the company continues to slightly reduce emissions from its manufacturing operations while also releasing internal combustion engine vehicles, its ESG ratings are likely to rise. But, vehicle use-phase emissions, which represent 80 to 90% of total automotive emissions (included in Scope 3 of ESG reporting), tend to be misreported due to the use of unrealistic assumptions or not reported at all. Thus, it turns out that some oil and gas companies rank higher than Tesla on "Environmental Impact," which, as we understand, is completely untrue. Tesla cited Bloomberg Businessweek about the "ESG Mirage" to back up its conclusion:

"The most striking feature of the [ESG rating] system is how rarely a company’s record on climate change seems to get in the way of its climb up the ESG ladder, or even to factor at all."

Source: Re-posted and Summarized from Eva Fox at tesmanian.

My Take: Typical smoke and mirror show to mislead investors.

Re Posted From: Tesla Urges Large Funds to Stop Misleading Investors

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Tesla urges large funds to stop misleading investors and change their ESG valuation of companies. This will prevent a situation where investors who seek to invest only in environmentally friendly companies will actually invest in companies that pollute the environment.

Tesla published the 2021 Impact Report, which raised the issue of ESG (Environmental, Social, and Governance). The manufacturer explained that the current ESG reports do not measure the magnitude of the positive impact on the world, which is the biggest mistake. Instead, it focuses on measuring the dollar value of risk/return. The problem is that individual investors who trust their money to ESG funds of large investment institutions may not be aware that they can be used to buy shares in companies that worsen rather than improve climate change.

As an example, Tesla cites measuring the impact of the automotive industry. While the average investor might think that the more electric vehicles an automaker sells, as a percentage of total volumes, the better its ESG score, but the reality is different. As long as the company continues to slightly reduce emissions from its manufacturing operations while also releasing internal combustion engine vehicles, its ESG ratings are likely to rise. But, vehicle use-phase emissions, which represent 80 to 90% of total automotive emissions (included in Scope 3 of ESG reporting), tend to be misreported due to the use of unrealistic assumptions or not reported at all. Thus, it turns out that some oil and gas companies rank higher than Tesla on "Environmental Impact," which, as we understand, is completely untrue. Tesla cited Bloomberg Businessweek about the "ESG Mirage" to back up its conclusion:

"The most striking feature of the [ESG rating] system is how rarely a company’s record on climate change seems to get in the way of its climb up the ESG ladder, or even to factor at all."

Source: Re-posted and Summarized from Eva Fox at tesmanian.

My Take: Typical smoke and mirror show to mislead investors.

Re Posted From: Tesla Urges Large Funds to Stop Misleading Investors

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