Ethos Foundation in Switzerland is excluding Tesla shares from its own funds as it raised concerns over the company’s governance, including the remuneration of its chief executive officer, Elon Musk.
“Tesla has never been investable in our funds based on our ESG rating, mainly because of governance issues and remuneration issues,” Ethos Foundation’s CEO Vincent Kaufmann told IPE.
Ethos’s investment strategy is based on two types of exclusions, a sector-based exclusion and a so-called conduct-based exclusion. In addition, for actively managed investment funds, an investee company must reach a certain ESG level to end up in an Ethos fund.
Governance represents a significant part of Ethos’s ESG rating. “Tesla has been excluded from our actively managed investment funds based on its insufficient ESG rating,” he added.
The foundation offers six equity funds and two bond funds. It has one world equity fund worth CHF130m (€137.8m), actively managed by Banque Cantonale Vaudoise, which does not hold Tesla shares.
It also has three Swiss equity funds, the largest is a small and mid-cap fund worth CHF1bn, one for European equity, and a smaller fund (SFDR 9 fund) launched last year. Tesla does not qualify for this fund either due to its insufficient ESG rating.
“The highly excessive remuneration package challenged by shareholders […] shows that there aren’t checks and balances at board level, and recent developments show that the governance of the company is not improving,” Kaufmann added.
Dutch civil service scheme ABP and construction sector fund Bpf Bouw have also sold their Tesla shares because of Musk’s remuneration package.
Swiss pension funds tend to exclude companies active in the coal industry and armament producers, and follow ESG indices.
Ethos favours Tesla’s product – electric vehicles – and what the company has done to transform the industry. However, Kaufmannn noted that Musk is now a member of the US administration led by president Donald Trump, who has been unravelling policies of the previous government which fought climate change, instead supporting oil and gas productions, and revoking the 50% target set by 2030 of new electric vehicles sold in the US.
“Musk is now part of an administration that wants to somehow fight Tesla’s own product, it is a contradiction,” Kaufmann added.
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Luigi is IPE's Berlin-based DACH correspondent.
His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market.
He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile
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