Tobacco Outranks Electric Vehicles on ESG

Tobacco companies perform better in environmental, social and governance (ESG) rankings than manufacturers of electric vehicles, reports The Washington Free Beacon.

Earlier this month, S&P Global raised eyebrows when it gave Tesla, the world’s largest manufacturer of electric cars, a lower ESG score than Philip Morris International.

Tesla earned just 37 points on the 100-point scale compared with PMI’s 84.

It’s not the first time that tobacco companies have outranked companies with greener reputations. Sustainalytics, a widely used ESG ratings tool, gives Tesla a worse score than Altria Group. And the London Stock Exchange gives BAT an ESG score of 94—the third highest of any company on the exchange’s top share index—while Tesla earns a middling 65.

The strong ESG performance of tobacco companies is due in part to their emphasis on inclusion and social justice. Altria, for example, has gone out of its way to emphasize the diversity of its corporate board and the breadth of its social justice initiatives. Tesla, by contrast, has resisted that bandwagon, going so far as to fire its top LGBT diversity officer last year.

Imperial Brands touts its trainings on “microaggressions” and a board that is 40 percent women. PMI and BAT promote their scores on Bloomberg’s Gender Equality Index.

Critics contend that tobacco companies’ ESG scores mask the negative impact of their activities, which they say include pollution from filters and nondegradable e-cigarettes along with the soil erosion and deforestation associated with tobacco growing.