Tesla fares well on environmental risks, not so great for social and governance issues: Phillip Capital

TESLA's recycling initiatives, use of solar panels and electrification of their heavy-duty trucks may have earned the company high marks on the environmental front, but wealth management firm Phillip Capital has found its management of social and governance issues lacking.

In a January 2022 report detailing Tesla's environmental, social and governance (ESG) scorecard and how these metrics might be material to the company’s financial value, Phillip Capital stated that the electric-vehicle manufacturer needs to be more transparent about disclosing its measures to mitigate biodiversity loss and the impact of climate change, and that it should invest more resources to ensure product safety and regulatory compliance.

Nevertheless, the report also stated that Tesla has done fairly well in mitigating the negative impact on the environment, with systems to reduce waste, energy and water consumption.