Reuters on Wednesday reported that Tesla has been returned to the S&P 500 ESG index, the socially conscious index operated by Standard and Poor's.

Tesla, the world’s largest producer of electric vehicles, had been kicked off the index in 2021 following allegations that it lacked “a low-carbon strategy” and had poor “codes of business conduct,” in addition to other charges, prompting Elon Musk to tweet , “ESG is a scam.”

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A spokesperson for Standard and Poor's told Reuters that Tesla fared better in 2023, "especially on environmental factors, which are material for a company in the automobiles industry." But as Barron’s reported, Tesla’s ESG scores on average remain low, trailing many oil and tobacco companies.

“Tesla scored 37 out of a possible 100,” reported Al Root, referring to the S&P Global ESG scores updated in May.

That is six points lower than Chevron, the second-largest oil company in America. Tobacco companies, meanwhile, are doing even better.

Big Tobacco has long been viewed as a conglomerate of ill repute, especially with political elites and moral crusaders, in large part because smoking kills nearly half a million Americans every year, including non-smokers (who die from secondhand smoke), according to the Centers for Disease Control and Prevention.

Despite their association with mass death, tobacco companies are crushing the ESG game.

A recent Washington Free Beacon report noted that tobacco giants such as Philip Morris and British American Tobacco are receiving sparkling ESG scores, which “are supposed to guide investors, and their money, toward ethical enterprises.”

British American Tobacco recently gushed about receiving the third-highest ESG score (94) of the largest publicly traded companies in the U.K., with its subsidiary Reynolds scoring a perfect 100% from the Human Rights Campaign’s Corporate Equality Index. Tesla, meanwhile, scored a 64 from the London Stock Exchange.

And then there’s Philip Morris, the company that produces the popular Marlboro brand of cigarettes. The multinational tobacco company, which boasts a market cap of $150 billion, scored an 84 on its last S&P Global ESG score, more than twice that of Tesla.

What’s going on? After all, the whole point of corporate social responsibility is to, in the words of Mayflower-Plymouth Managing Partner Hendrith Vanlon Smith Jr., encourage companies “to conduct business in an economically, socially, and environmentally sustainable manner.”

So how do companies that produce products that kill 8 million people annually crush it in ESG scoring, while a company such as Tesla — the world-leading producer in electric vehicles, a symbol of sustainability — scores so poorly?

The answer is not as simple as one thinks because ESG scoring is notoriously opaque . But it certainly calls into question the scoring system itself and adds fuel to critics of ESG who claim it’s not about social responsibility at all but rather an “elite-driven phenomenon” designed to “exercise power over our society.”

"ESG company ratings often measure abstract woke goals that have no rational connection to companies' actual businesses," Jonathan Berry, a managing partner at Boyden Gray & Associates, told the Free Beacon.

If you doubt Berry, consider why Burger King is suddenly weighing in on climate change . Or why Miller Lite is promoting third-wave feminism in commercials instead of making people laugh.

Burger King doesn’t know anything more about climate change than your local mechanic, but there is immense pressure on corporate executives to dance to the tune of ESG piper. Executives with bad ESG scores are seen as ”troglodytes” ( according to one University of Chicago economics professor), and companies with poor scores risk getting delisted from ESG indexes.

Though ESG is seen as “stakeholder capitalism,” it’s the opposite of capitalism. It doesn’t empower consumers, as capitalism does, or even stakeholders; it empowers those who get to determine what behavior and values are right and wrong.

This is dangerous. Ethics and morality are important, but they are also complicated.

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It should go without saying that no single group of people should get to decide what is ethical or just for a society — let alone a tiny cabal of people who believe that Philip Morris, which produces a product that kills millions, is socially superior to Tesla because it hit the Goldilocks spot on diversity and inclusion metrics.

Tesla’s reinstatement to the S&P 500 ESG index should not overshadow the truth about ESG: It is indeed a “scam,” as Musk stated. One that is not just absurd, but a genuine threat to freedom .

Jon Miltimore ( @miltimore79 ) is the managing editor of FEE.org, the online portal of the Foundation for Economic Education. Follow his work on Substack .