An S&P Dow Jones Indices executive told Reuters on Wednesday it has removed electric carmaker Tesla Inc. from the widely followed S&P 500 ESG Index because of issues including claims of racial discrimination and crashes linked to its autopilot vehicles, and Tesla CEO Elon Musk responded with harsh tweets, including that “ESG is a scam.”

In its changes, effective May 2, the sustainability index also added soon-to-be-Musk-controlled Twitter Inc. and oil refiner Phillips 66 while dropping Delta Air Lines and Chevron Corp, according to an announcement.

The back-and-forth over the index changes reflects a wider debate about the metrics used to judge corporate performance on environmental, social and governance (ESG) issues, a growing area of investing.

Tesla has become the most valuable auto industry company by pioneering EVs and expanding into battery storage for electric grids and solar-power systems.

Factors contributing to its departure from the index included Tesla’s lack of published details related to its low carbon strategy or business conduct codes, said Margaret Dorn, S&P Dow Jones Indices’ head of ESG indices for North America, in an interview.

Even though Tesla’s products help cut planet-warming emissions, Dorn said, its other issues and lack of disclosures relative to industry peers should raise concerns for investors looking to judge the company across ESG criteria.

Tesla, Echoing Musk, Says ESG Metrics Are ‘Fundamentally Flawed’

“You can’t just take a company’s mission statement at face value; you have to look at their practices across all those key dimensions,” she said.

Tesla representatives did not immediately respond to questions. The company has previously called ESG methodologies “fundamentally flawed.”

Musk tweeted that “Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list! ESG is a scam. It has been weaponized by phony social justice warriors.”

Asked about the tweet, a representative for the index provider said Musk may have been referring to a list on a company blog post of the largest 10 constituents by market cap of the S&P 500 ESG Index after the removal of Tesla and others. The list is “not a ranking of best companies by ESG score,” the representative said.

Exxon now accounts for 1.443 percent of the weight of the index. Apple Inc. was the largest at 9.657 percent.

Growing Concerns

Investors concerned about issues like diversity and climate change have poured billions of dollars into funds using ESG criteria to pick stocks, prompting debate about how effectively the funds promote change or whether they push companies too much on issues that should be settled by government policy.

S&P Dow Jones Indices is majority-owned by S&P Global Inc. Musk and others have complained the firm and its rivals conflate too many issues by bundling ESG concerns into one total score.

For instance, a fund based on the S&P 500 ESG Index, the SPDR S&P 500 ESG received the low rating “D” by climate activist research group As You Sow, which noted despite its title and sustainability mandate, fossil fuel stocks make up 6.5 percent of fund assets.

In the company blog post reviewing changes from April 22, S&P’s Dorn said the index aims to keep industries weighted the same as they are in the regular S&P 500 index “while enhancing the overall sustainability profile of the index.” In practice, that means it can keep oil companies while leaving out big players like Facebook parent Meta Platforms and Wells Fargo & Co.

Dorn said Tesla’s ESG score had declined slightly from the “22” it received last year. At the same time, the average score among other automakers improved, pushing Tesla out of the ESG index because of a rule against including lowest-quartile performers.

Dorn and others did not immediately describe other details such as the reasons Twitter or Phillips 66 were added or other companies dropped.

Among other big ESG ratings agencies, MSCI Inc gives Tesla an “average” ESG rating, while the Sustainalytics unit of Morningstar Inc gives Tesla a “medium risk” rating, according to the firms’ websites.

On Wednesday a U.S. safety regulator opened a special crash investigation into a Tesla crash this month in California, among more than 30 crashes under investigation involving advanced driver assistance systems.

In February, a California state agency sued Tesla over allegations by Black workers that the company tolerated racial discrimination at an assembly plant, adding to claims made in several other lawsuits.