Tesla, Inc. – Sustainability Reporting (2019)
Outcome: Successfully withdrawn after Tesla published its first comprehensive Impact Report describing how it manages the environmental and social impacts of its operations.
Managing and reporting on environmental, social, and governance (ESG) topics, such as
worker health and safety, resource usage, operational environmental impacts, and corporate
governance policies helps companies compete in a business environment characterized by
finite natural resources, changing legislation, and heightened public expectations for corporate
accountability. Transparent, substantive reporting allows companies to gain strategic value from
existing sustainability efforts and identify emerging risks and opportunities.
Tesla has faced various criticisms for its health and safety performance in recent years, to which
the Company has responded via sporadic blog posts. Proponents believe many of these
damaging criticisms could have been avoided if Tesla provided comprehensive disclosures that
paint a clear picture of the company’s H&S record over time.
Tesla does not substantively report on its policies, programs, or performance on other ESG
issues, including energy or water usage, greenhouse gas emissions, supply chain responsibility,
raw materials sourcing, the life cycle benefits of its products, and/or workforce diversity. This
leaves investors unable to adequately evaluate how the company is managing related risks and
Corporate sustainability reporting is a very common business practice, undertaken by 85% of
the S&P 500 in 2017 according to the Governance and Accountability Institute. Globally, 75% of
4,900 companies surveyed by KPMG in 2017 publish corporate responsibility reports. These
figures include many of Tesla’s peers: Ford, GM, Daimler, Toyota, Volkswagen, BMW, Honda,
Samsung, Siemens, AES Corporation, and SunPower.
Performance on ESG factors is widely linked to financial outperformance. Oxford University and
Arabesque Partners reviewed 200 studies on sustainability and corporate performance and
found 90 percent of studies show high ESG standards reduced companies’ cost of capital, and
80 percent show a positive correlation between stock price performance and good sustainability
Investors have demonstrated strong interest in corporate reporting on sustainability policies,
practices, data, and improvement targets. The 1,800 signatories of the Principles for
Responsible Investment, representing approximately $70 trillion in assets under management,
have pledged to seek “appropriate disclosure on ESG issues.” The Task Force on Climaterelated
Financial Disclosures (TCFD), whose members include JPMorgan Chase, UBS Asset
Management, Generation Investment Management, and BlackRock, recommends that
companies disclose targets to measure and manage climate risks and performance against
Shareholders request Tesla, Inc. issue an annual corporate sustainability report describing the
Company’s Environmental, Social, and Governance (ESG) policies, management strategies,
quantitative performance metrics, and improvement targets. This report should be prepared at
reasonable cost and omit proprietary information.
Tesla should consider the resources and recommendations made by the widely accepted
Global Reporting Initiative, CDP, Sustainability Accounting Standards Board, and the TCFD
when identifying ESG topics to be included in this report. The report should address relevant
policies, practices, metrics, and goals on topics such as: supply chain management,
greenhouse gas emissions, waste minimization, energy efficiency, workforce health & safety,
product quality and safety, and other relevant impacts.