for more on this. Let's bring in Anthony 16
cf. A senior investment strategist at crane share Anthony
, I was talking about this a little bit at
the top of the show, but can you break
down what it means to be a part of this
index and to now get kicked out of it essentially
. Good morning. Yeah, it's it's a big
deal at least from a sentiment sentiment uh, side
on the investment side, it's not a big impact
. So the S and P 500 they have E
. F. G. Index, they have this
index where they include all the different companies that in
their opinion, according to their methodology, um,
uh, comply with their E. S. And
G. And now after assessment they do an assessment
on an annual basis. And after the recent assessment
they concluded that Tesla should be kicked out of the
index which actually tracks close to 11 billion in passive
investment which is not a big deal, it's less
than a billion flows into Tesla which they can do
in one day. But from a sentimental perspective,
it's really important. However, it highlights issues on
both sides of the spectrum here. Well, there
are issues on the Tesla side. I think this
is also highlighting issues on the methodology that SNP is
following to do that. And I want to talk
about both of those sides and start with kind of
on the E. S. G. Index side
. Right. The head of E. S.
G. Indexes for S and P 500 I think
Margaret Dorn has said this while Tesla may be playing
its part in taking fuel powered cars off the road
. It has fallen behind its peers when examined through
a much wider E. S. G. Lens
, why has Tesla fallen behind its peers? Do
you think this assessment? Um, you know,
is fair and then you break down a bit more
of the reason for the booth, you know?
Absolutely. I think this statement is fair, but
the key word here is fell against its peers,
right? What appears? So we're talking about the
automotive peers. So the way SMP does their analysis
is they do it on a sector basis. Right
? So in a way that kind of treating carbon
emissions differently, like for fossil fuel for oil and
gas companies versus automative companies versus other companies in different
sectors, whereas carbon emission for me is carbon emissions
, right? No matter how you do it and
where you do it. So, so when you
kind of rank Tesla with its own peers who are
mostly elected vehicle companies that are doing the right thing
and you have issues like they highlighted with regards to
racial uh inequality and and you know, and and
lack of diversity at the top of their board of
directors, then yes, it would fall behind kind
of their peers, but I think it would still
be ahead of many other companies in different sectors.
So I think that's the key here to that point
. Elon must obviously twitter as he does on any
issue that he has and really pointed out a little
bit that I want to pull up a tweet from
Elon musk essentially condemning this decision, calling E.
S G s scam. But even also in this
tweet here pointing out that Exxon made the list and
Tesla did not investor, even Kathy would also chiming
in calling the decision ridiculous. Can you just discuss
from their perspective that concern again the other side of
the coin here in terms of pointing out some issues
around this methodology that may have more broader implications for
I think more broader es. G indexes and really
insight there. Absolutely. So at great shares were
very committed to climate, very committed to USC and
we're committed to all three letters, right? The
environmental E the social S and the government's G.
Right? So so I really think that we need
kind of a universal formula for A. S.
G. I think there are some uh you know
, we can update that formula. It hasn't been
or definition hasn't been looked at in a little while
and there are different issues just not just with how
we rank things. Also when we look at different
metals as well like lithium and cobalt, they're they're
classified low on on on the LG environmental but if
you look at the life cycle, these metals are
kind of participating in the move to energy transition.
So I agree with them in that regard. I
may not agree with the methodology of Elon musk.
I think Tesla has some issues to resolve. We
definitely do not stand behind any of the racial inequalities
that are happening at the, at the company's factory
. And also we would like to see more diversity
at the top. If you look at their executive
team, they're all, you know, white men
. If you look at the board of directors,
there's only two women, one is uh, you
know, minority. So so I think they could
do a lot more on that space to kind of
bring up not only the environmental benefits but also the
social and governance benefits that, that these companies are
offering. You know, when we look at Tesla
right now the stock has taken a pretty significant hit
chairs down 40% year to date. I only got
about 30 seconds here, but I'm just curious what
do you think this means more broadly for tesla stock
as it's already under a bit of pressure? It's
definitely gonna put the stock under a little more pressure
from negative sentiment perspective, You know, especially with
all the tweets that we're seeing from Elon musk.
This is kind of reminiscent of what he did kind
of two years ago. This is a concern,
but also there are other wider issues that are happening
at the same time, the inflation, the rotation
from growth to value for the long term Tesla is
a great company. It's always, you know,
it's, it's doing his job in the energy transition
. I'm not worried about the long term, but
in the short term, I think Elon musk needs
to, uh, you know, hopefully get his
act together. Yeah. And it's really fascinating kind
of insight here, Tesla down what 30% year to
date really lost the crown from going from that$1
trillion market cap now, but 730 something billion dollars
. Really thank you for your time. Anthony's has
seen Cf, a senior investment strategist at Crane's chair --> .