Tesla (NASDAQ: TSLA) joined the S&P 500 in December 2020, which gave a huge boost to the value of its stock. Now the benchmark's sustainable version--the S&P 500 ESG Index--has included the manufacturer in the index.
Even though Tesla, as an electric vehicle manufacturer, was a pioneer in clean energy, this still did not automatically make it a sustainable company. Like any new member of the S&P 500, Tesla had to pass another test during the annual rebalancing of the S&P 500 ESG index, which was held in late April. To qualify, a company must obtain a sufficiently high sustainability rating, which includes a review of its environmental, social, and governance (ESG) indices and their comparison with peers in the automotive industry.
In early May, Tesla joined the S&P 500 ESG Index at its annual rebalance, replacing one of the retired companies--Facebook (FB), Wells Fargo (WFC), and Costco (COST). As of May 25, Tesla is the seventh-largest component in the State Street ETF at a weight of 1.73%, according to issuer data.
“Tesla's S&P DJI ESG Score was 22 out of 100 (up 8 points from last year's score), driven by its ESG Dimension Scores, including an Environmental score of 28 (up 1 point), a Social score of 6 (up 2 points), and a Governance score of 49 (up 21 points),” said S&P Dow Jones Indices.
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About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
