How Tesla Scored A Zero On Climate Management

Tesla Motors is widely regarded as the most climate-conscious automaker, with an all-electric fleet that spurred clean-car innovation across the industry. But Elon Musk's company nonetheless earned a zero score this year in an assessment of corporate climate governance.
The Transition Pathway Initiative assessed the climate performance of 138 companies in seven sectors, including all the major automakers. Tesla tops the list when it comes to carbon emissions from its products, thanks to a fleet that burns no gasoline or diesel. But Tesla finished last, alongside Ferrari and the Chinese automaker Brilliance, when it comes to management of its overall climate impact, because the company hasn't disclosed any management information.
"They clearly are by far the most efficient in terms of alignment with 2º, but at the same time they’re one of the worst in terms of actually making public disclosure in terms of how they manage climate change as a company," said Adam Matthews, the director of ethics and engagement for the Church of England Pension Board and co-chair of TPI. His reference to 2º refers to the international ambition to limit human-caused warming to no more than 2º C.
TPI's zero score is typically reserved for companies that are "unaware of (or not acknowledging) climate change as a business issue."
That characterization rankled a Tesla spokesman I reached yesterday.
"Tesla’s entire reason for existing is to accelerate the world’s transition to sustainable energy," said Tesla spokesman Kamran Mumtaz. "Our fleet of vehicles has saved more than 3.5 million tons of CO2, and our solar products have produced more than 10 billion kilowatt hours of clean energy across the globe. When we read that Tesla is ‘unaware of climate change as a business issue,’ we checked the calendar to make sure it wasn’t April 1st.”
TPI is not the only organization to criticize Tesla's silence about its climate impact. Trillium Asset Management knocked Tesla in a recent report on the company's environmental, social and governance (ESG) disclosures:
"Beyond health and safety, Tesla does not substantively report on its policies and programs to manage other ESG topics, leaving investors unable to adequately evaluate how the company is managing these significant risks and opportunities," Trillium states.
"Corporate sustainability reporting is now a mainstream business practice, undertaken by 82% of the S&P 500 in 2016, according to the Governance and Accountability Institute. Globally, 73% of 4,500 companies surveyed in 2015 by KPMG publish corporate responsibility reports. Notable examples include Ford, GM, Daimler, Toyota, Volkswagen, BMW, Cooper Tire, Delphi Automotive, BorgWarner, and Honda.”
TPI awarded its highest management score to Daimler, Fiat-Chrysler, Groupe-PSA, Mazda, Renault, Toyota and Volkswagen. Typically, a corporation's willingness to disclose aligns with its performance, Matthews said, calling Tesla "an anomaly."
"TPI is based entirely on company disclosure. We don’t use third-party data sources. It’s company disclosure, and in this regard Tesla actually do not disclose any of the criteria that we’ve set out that we need to understand," Matthews said yesterday in a webinar hosted by Climate Action.
"So there is an anomaly in that one, but overall I think this gives a very clear assessment of how to approach a sector."
Trillium had prosposed a shareholder action to compel disclosure from Tesla but withdrew it "following a productive and on-going dialogue." In that dialogue, shareholders requested that "Tesla issue an annual corporate sustainability report describing the company’s policies, strategies, performance, and improvement targets on material environmental, social, and governance (ESG) topics."
Tomorrow: How Investor Pressure On Climate Is Affecting Corporations Worldwide

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