Elon Musk has faced many threats to humanity, but he could be in for his biggest challenge yet. Elon recently took the world by storm when he tweeted he is increasingly convinced that corporate ESG is the devil incarnate. Simply put, an ESG score is a measure of a company's long-term exposure to environmental, social, and governance risks that are frequently ignored during traditional financial evaluations.
These risks include issues such as energy efficiency, worker safety, and board diversity, all of which can have serious financial ramifications. A high ESG rating indicates that a company manages its ESG risks well in comparison to its peers, whereas a low ESG rating indicates that the company has a higher unmanaged ESG risk exposure.
Elon took to Twitter to express his frustration with the news that his company had dropped out of the S&P 500 ESG index.