“You can’t have a trial on racial justice and is considered the best name for ESG,” she added.

Passive index funds, which together direct about a third of all assets invested in the stock market, need to match their portfolios to the index they track. Inclusion in the index or removal from it may affect the value of the company’s shares. Shares of General Electric, for example, fell 3 percent shortly after it was announced in mid-2018 that the company, the original member of the Dow Jones industrial index, was being withdrawn from that index.

But the fall in Tesla’s stock price by more than 30 percent since late March was likely the result of concerns about Mr Mask’s offer to acquire Twitter and broader changes in the way investors view technology stocks.

S&P reported that at the end of December 2020, $ 65 billion had been invested in index-linked funds, the latest figure available. That’s far less than the $ 13 trillion in funds tied to the more widespread S&P 500 index, of which Tesla remains a member. That $ 65 billion is also small compared to Tesla’s total market value of nearly $ 750 billion. And only part of these ESG funds are in Tesla.

Moreover, of the $ 65 billion pegged to the ESG index, only $ 11 billion of that money is invested in passive index funds that will be needed to sell their Tesla shares. The rest of the money is in funds that compare their performance with the S&P 500 ESG index. Many of these funds are actively managed by portfolio managers. These funds are not required to sell their Tesla stocks, but they can do so so as not to deviate too far from the index with which investors compare them.

“Tesla is simply not an open and closed affair of ESG,” said John Hale, who leads a sustainability study at Morningstar’s mutual fund tracking firm. “While it is clear that the company’s product is good for the environment, Tesla is now a large company and it also affects employees and customers, and these issues concern ESG investors.”

Several other well-known companies were also removed from the index in April, when S&P determined that they no longer met the criteria for membership. These included Chevron, Delta Air Lines, Home Depot and News Corp.

Even if miscarriages do not affect a company’s share price, they can affect a company’s actions. “Elon Musk and Tesla may be an exception,” Mr Hale said. “But the downside of this is that very few companies want to lag behind ESG in the current environment.”

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