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<ul> <li>Elon Musk called the framework that evaluates companies' social and sustainability standards "the devil" on Wednesday.</li> <li>The billionaire tech boss highlighted a report showing tobacco stocks scoring more highly than Tesla in ESG ratings.</li> <li>ESG metrics score publicly-listed companies based on environmental, social, and governance.</li> </ul> <p>Elon Musk slammed the framework that evaluates companies' environmental, social and governance standards, flagging that tobacco firms tend to receive higher ESG ratings than electric-vehicle maker <a href="https://markets.businessinsider.com/stocks/tsla-stock?utm_medium=ingest&utm_source=markets">Tesla</a>.</p> <p>"Why ESG is the devil," the Tesla and SpaceX chief said on <a href="https://twitter.com/elonmusk/status/1668829554448777216" target="_blank">Twitter</a>, in response to an article by <a href="https://freebeacon.com/latest-news/how-tobacco-companies-are-crushing-esg-ratings/" target="_blank">Washington Free Beacon</a> reporter Aaron Sibarium.</p> <p>ESG is a set of standards meant to assess business practices in relation to sustainability and ethical concerns. An increasing number of financial-market participants use ESG-based ratings as a guidance for socially responsible investing – rather than simply buying assets they think will deliver the best returns.</p> <p>They often use a 1-to-100 ratings scale, determined by research firms like S&P Global and Morningstar. </p> <p>But critics of the framework say it encourages <a href="https://www.theguardian.com/environment/2023/may/15/greenwashing-era-is-over-say-ad-agencies-as-regulators-get-tough" target="_blank">so-called "greenwashing"</a>, and fails to properly rate companies based on their social contributions. </p> <p>"From S&P Global to the London Stock Exchange, tobacco companies are crushing Tesla in the ESG ratings," <a href="https://twitter.com/aaronsibarium/status/1668658866337218560" target="_blank">Sibarium had tweeted Tuesday</a>. </p> <p>"How could cigarettes, which kill over 8 million a year, be deemed a more ethical investment than electric cars?" he added.</p> <p>Sibarium's article pointed out that <a href="https://www.barrons.com/articles/tesla-chevron-stock-sp500-esg-score-index-bf95e0fe" target="_blank">S&P Global's latest ESG rankings</a> gave EV maker Tesla a score of 37 – and tobacco giant <a href="https://markets.businessinsider.com/stocks/pm-stock?utm_medium=ingest&utm_source=markets">Philip Morris</a> an 84.</p> <p>The London Stock Exchange gave <a href="https://markets.businessinsider.com/stocks/bti-stock?utm_medium=ingest&utm_source=markets">British American Tobacco</a> an ESG rating of 94, and Tesla a more middling 65. </p>
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