Elon Musk lambastes ‘Satanic’ ESG as World Economic Forum meets in Davos

Investing decisions based on a company’s view around its environmental, social and governance (ESG) responsibilities has been gaining momentum as the world on a global scale experiences adverse events as a result of global warming and social injustice.

The World Economic Forum (WEF) meeting that is currently underway in Davos is making a special effort to hone in on the focus that businesses need to put on their ESG responsibilities.

“In the heat-laden months of 2022, it became abundantly clear the health of the planet is deteriorating. Companies are increasingly expected by investors and the wider public to be part of the multistakeholder, collaborative effort to restore it – and be transparent,” the WEF said on its site.

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A skewed narrative

While this has been a notion welcomed by the majority of attendees, a handful have spoken out saying that the narrative and intention around the promotion of ESG is being skewed.

One of these people were Larry Fink, CEO of BlackRock Inc – an investment company – who said that the conversation around ESG was creating huge polarisation. American author, Michael Shellenberger, spoke out about the WEF meeting, suggesting that there were other agendas at play.

It was on Shellenberger’s tweet that Tesla CEO, Elon Musk, responded that the ‘S’ in ESG stood for satanic.

In May, last year, Musk described ESG as a “scam that has been weaponised by phony social justice warriors”. This was said in a tweet where he lamented Exxon being rated in the list of the top ten best in the world for environment, social & governance (ESG) by S&P 500, while his company Tesla did not make the list.

Musk’s management style

It is easy to see how Musk would expect Tesla to be rated highly as a ESG responsible company. After all, Tesla is the maker of electric vehicles that is said to provide the blueprint for the future of environmentally responsible modes of transportation.  

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However, Musk’s management style is what might be the spanner in the works that is seeing his company rated higher.

While the electric car does seem to help mitigate environmental issues, in terms of social and governance factors, Musk seems to be lacking. Musk has been criticised in the media for targeting female employees during layoffs.

His management style and lack of transparency as a leader during the takeover of Twitter was also criticised.

Musk’s recent reply on Shellenberger’s post could just be a case of sour grapes.

In Tesla’s 2021 Impact Report, the company noted that current ESG evaluation methodologies are fundamentally flawed. To achieve acutely-needed change, ESG needs to evolve to measure real world Impact.