The Environmental Impact of Lithium Batteries. Eventually, zero-Cobalt batteries will be introduced into Tesla’s EVs Still, a controversial subject like the sourcing of the metal requires a tedious and specific amount of verification through a series of annual third-party audits. After an in-depth analysis to assess its social impact, we identify its strengths and weaknesses, and reach an interesting Read more…. MSCI has been downgrading Tesla ESG since it started measuring it. However, when looking from a sustainability perspective, we need to access how Tesla’s vehicles compare to other EVs by amount of CO2 emissions during the vehicle’s lifetime. While Tesla continues to work toward the omittance of the element from its batteries, the challenge is finding another metal that can replace Cobalt while maintaining the integrity of the battery. After driving the expected 150,000 km during car lifetime, the most important decision for Tesla is to find a destination for its batteries. Tesla targets cobalt-free batteries in bid to minimise environmental impact. Sustainalytics ranks Tesla at the 52th position out of 71 companies in the automobile industry group. The Palo Alto, California-based automotive and energy company shared self-reported carbon dioxide emissions data from their global operations in 2017. Jun 10, 2020 at 20:44 GMT 7 months ago Tesla has released its environmental impact report for 2019 today, and the report does a lot to address several myths which portray electric vehicles as actually more damaging to the environment than petrol cars. Umicore) to process the scrap and a few end-of-life batteries. 2019 Impact Report | Tesla … Reading Time: 10 min The iShares Social ETF is one of the oldest and most popular ESG ETFs from iShares. Impax Environmental Markets manager Jon Forster explains why he … How does Tesla perform in the Social criteria? Despite Tesla’s clear mission and strong sustainability focus, Tesla has not been very forward when it comes to disclosing its social and environmental impact. The report offers a clear reminder of Tesla's mission, which is simply to "accelerate the world's transition to sustainable energy." “Tesla’s batteries use nickel-rich cathode materials which contain less cobalt than other widely use cathode chemistries in the industry with our ultimate goal being to eliminate cobalt completely from our cells,” notes Tesla in its Impact Report. The company’s stock price surged by 236 per cent in 2020, and added another 25 per cent at the end of January 15, 2021. Tesla Releases Environmental Impact Report. It cames from 20% in 2006 to 62% in 2020. There are several examples where Tesla had violated labor rights and forced workers to work in unsafe conditions. The Palo Alto, California-based maker of electric cars was on track for all-time highs in revenue and profits (annual figures will be reported later this month). Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. “Because Tesla recognizes the higher risks of human rights issues within cobalt supply chains, particularly for child labor in the Democratic Republic of Congo, we have made a significant effort to establish processes to remove these risks from our supply chain,” the company wrote. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Reading Time: 9 min Low carbon ETFs are an important element when it comes to sustainable investing. Tesla, the global leader in EV (electric vehicles) by units produced, after much expectation and speculation has joined the S&P 500 on 21st December 2020. According to the Australian Green Vehicle Guide, Hyundai Ioniq generates 11% fewer emissions in gCO2/km than Tesla Model 3. Several ESG rating agencies have rated Tesla on ESG criteria. Reaching a valuation of around $600 billion, Tesla has a market cap 3 times larger than Toyota, the second-largest automaker. As expected, due to the nature of its business, Tesla has a good rating in Environmental criteria. The automaker plans to eventually produce a zero-cobalt battery for its vehicles and energy products, in its bid to source metals in a responsible fashion that maintains not only the integrity of the company but also the human rights of those involved in the sourcing of raw materials. However, here again the emissions associated with the vehicle use are dependent on the energy sources available at each recharging location: the upstream fuel cycle. Tesla outlined its goal for responsible Cobalt sourcing in its latest 2019 Impact Report, released on June 8, 2020. But cars, even electric ones, have a far broader environmental impact. Those analysis are already being done by highly specialized analysts, both from a bullish and a bearish perspective. 22 June 2020, source edie newsroom. Tesla’s 2019 Impact Report is available below. We will also assess how well Tesla is fulfilling its mission: “Tesla’s mission is to accelerate the world’s transition to sustainable energy. Thank you and congratulations! When comparing to its peers in the automobile industry, MSCI indicates that Tesla is a laggard in Labour Management and, different than other agencies, as a leader in Corporate Governance. Tesla’s First Impact Report Puts Hard Number on CO2 Emissions Emily Chasan , Bloomberg News (Bloomberg) -- Tesla Inc. released its first-ever environmental impact report on Tuesday afternoon, joining the 80 percent of S&P 500 companies who produce glossy-looking and sunny testaments to their own corporate sustainability record. Through this system, the recovery of critical minerals will be maximized along with the recovery of all metals used in Tesla battery cells, such as copper, aluminium and steel. Workers at Tesla factories: Tesla labor management is not good either. Why this environmental impact manager won’t invest in Tesla, even if it makes him underperform. As you probably know, Tesla prioritizes green energy and sustainable practices. Tesla stated last week when the Impact Report was released that it supports procurement from the Democratic Republic of Congo, one of the poorest countries in the world, “where we can be sure that minerals, including cobalt, come from mines that meet our social and environmental standards”. As of December 2020, Tesla is not only the largest EV by number of units produced (Q1-Q3 2020: 318,350 units), but it is the largest automaker by market cap. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Tesla, Inc.. Changes in the macro-environment factors can have a direct impact on not only the Tesla, Inc. but also can impact other players in the Auto Manufacturers - Major. Carmaker Tesla has unveiled an ambition to use cobalt-free batteries in all of its electric vehicles (EVs), in a drive to minimise the environmental and social impact of its supply chains and boost the longevity and recyclability of its technology. When it comes to the social criteria in ESG, Tesla has issues on at least two fronts: human rights within its supply chains and labour management at its factories. Tesla had a great year in 2020, seeing its stock price soar by more than 600%. However, as an automaker we need to look beyond tailpipe emissions, and evaluate the environmental impact of Tesla cars during full lifecycle, from cradle to grave. In other words, Tesla believes rising global CO2 emissions are unsustainable, making a revolution necessary in both the generation and the consumption of energy. Fuel economy during operation is a relevant factor to determine the electric vehicle’s efficiency in terms of distance performed with one unit of electricity. According to Fueleconomy.gov, Tesla Model 3 (2020) has the highest efficiency, reaching 141 MPGe. For S&P Global the main governance risks are Elon Musk’s dominant role in the company and its potential impact on corporate governance. Click to share on Facebook (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on WhatsApp (Opens in new window), Click to share on Pocket (Opens in new window). The combination of the three metals creates a battery that has longevity and stability throughout the life cycle of the vehicle. A lot of work is still needed from Elon Musk and his management team to improve the company’s social impact and corporate governance. Tesla’s plans to utilize zero-Cobalt batteries are certainly in the company’s future plans. Then, it discusses its supply chain and its responsible sourcing for materials. Tesla's mission is to accelerate the world's transition to sustainable energy. Tesla Model S and Nissan Leaf generate significant more emissions per distance when compared with the most efficient electric vehicles available in the market: Tesla Model 3 and Hyundai Ioniq. Local environmental impacts, economic injustices, and even slavery-like arrangements in supply chains are all things we should be working to improve upon or eliminate. The company’s stock price surged by 236 per cent in 2020, and added another 25 per cent at the end of January 15, 2021. Mining is a water-intensive process that can deplete local aquifers and impact the local ecosystem. At Tesla’s 2019 Impact Report they indicate that they are not yet recycling batteries at large volumes. If you want to find and buy the best clean energy ETFs, you should be aware of the sector megatrends and mitigate risks when investing. Under a section titled “Supply Chain Introduction: Responsible Material Sourcing,” Tesla addresses and details its “Supplier Code of Conduct” and “Human Rights and Conflict Minerals Policy.” The two documents outline the company’s expectations for its suppliers and partners and require all members of the Tesla supply chain to uphold responsible and integrity-focused techniques when acquiring Cobalt. Currently, the company’s cells use nickel-rich cathode materials and contain less Cobalt than any other widely used cathode chemistries in the EV sector. According to Tesla’s 2019  Impact Report, its batteries are designed to outlast their cars and they have ambitions to design batteries that could last for 1 million miles. The added environmental impact is mainly driven by the metals used in batteries and the resources and energy needed to mine those metals (lithium, nickel, and cobalt). The report explicitly mentions areas notorious for child labor, especially in the field of Cobalt mining. EV Tool (Union of Concerned Scientists, USA): Green Vehicle Guide (Australian Government): According to the Union of Concerned Scientists, Hyundai Ioniq has slightly lower emissions per mile than Tesla Model 3. Reaching a valuation of around $600 billion, Tesla has a market cap 3 times larger than Toyota, both from a bullish and a bearish perspective, not disclosing policies and programs related to ESG topics, ESG Industry Report Card: Autos and Auto Parts, Carbon Brief: How electric vehicles help to tackle climate change, Injury rates above average and under-reported, Firing workers after allowing them to take unpaid leave during COVID-19, Stopping production line of Models S and X for 18 days, giving workers one week of pay and one week without pay, a bailout for a financially troubled SolarCity, “as part of a $40 million accord with the SEC to settle fraud charges related to his tweets about taking Tesla private”, Several members of Tesla’s Board of Directors have ties with other Musk’s companies. Disclaimer: This website may use affiliate links. Tesla published on Monday its first ever Impact Report, a study of the impact the company’s products and operations have on the environment and communities. Tesla has released its environmental impact report for 2019 today, and the report does a lot to address several myths which portray electric vehicles as actually more damaging to the environment than petrol cars. Local environmental impacts, economic injustices, and even slavery-like arrangements in supply chains are all things we should be working to improve upon or eliminate. Cobalt has been one of the primary sources of criticism for non-EV supporters. The report sheds some light on key measurements and metrics on all the environmental aspects of Tesla’s performance last year. Tesla has even gone as far as removing some risks from its supply chain. He had remarkable achievements in Radio technology and electrical engineering of Serbian descent. “We believe the faster the world moves towards a zero-emission future, the better, so we’re working hard to minimize our greenhouse gas footprint, while investing in our employees and the … Impact Report 2019; Sustainability / CSR Annual Report 2018. In its announcement the electric auto maker declared that the company produced and delivered in-line with most recent guidance. Cobalt, while controversial, is a crucial element in lithium-ion batteries, at least for now. Tesla's mission is to accelerate the world's transition to sustainable energy. They are mainly recycling pre-consumer scrapped lithium and currently working with third-party recyclers (e.g. In its announcement the electric auto maker declared that the company produced and delivered in-line with most recent guidance. Keep in mind that we may receive commissions when you click our links and make purchases. Supply Chain: At the 2019 Impact Report, Tesla recognizes the high risk of human right issues on its cobalt supply chain, especially driven by the existence of child labor in the Democratic Republic of the Congo (DRC). Our ultimate goal is to develop a recycling processes that has high recovery rates, low costs, and a low environmental impact.”. But Tesla believes there is a way it can help. How Does Tesla Perform on ESG? Ultimately, to achieve the environmental targets necesary to avoid climate disruption, we need to change our car-centric culture and invest in public transportation, including electric buses, trains and bikes. Reading Time: 12 min A huge transition is taking place in the global energy sector. Tesla states that it has mapped significant areas of the Cobalt supply chain, and ethics concerning sourcing the metal will continue to improve over time. At Tesla’s 2019 Impact Report, they clearly indicate that sustainability is not their top priority, by stating: “Making a significant and lasting impact on environmental sustainability is difficult to achieve without securing financial sustainability for the long term”. Well explained SWOT analysis, revenue share and contact information are shared in this report analysis.“Green Cars Market is growing at a High CAGR during the forecast period 2020-2026. Broader report . Tesla’s lithium-ion batteries utilize an NCA Cathode makeup, comprised of a Nickel-Cobalt-Aluminum structure. Despite not being the best example in sustainability and ESG, Tesla is producing high-energy efficient vehicles and is investing heavily to mitigate its environmental risks, by improving the management and transparency at its supply chain, and developing better recycling processes and technology for its batteries. Tesla revenue hit $6.04 billion during the second quarter of 2020, with about 7% of that, or $428 million, coming from sales of regulatory credits. Below is a list of Tesla’s main labor related issues: Governance is another area where Tesla does not excel. Rockville, Md., Jan. 27, 2021 (GLOBE NEWSWIRE) -- The massive environmental challenges we face have complex causes and cascading consequences. Tesla’s ESG risk rating is split into 2.8 points for Environmental, 17.3 points for Social, and 11.0 points for Governance. Besides being known for the extremely optimistic promises of its CEO Elon Mask, and constantly missing production deadlines, the main governance issue is Tesla’s Board of Directors, which has strong ties with other Musk’s ventures, such as SolarCity and SpaceX. We are often asked if electric vehicles (EVs) are more sustainable than … However, it is also known that individual transportation is not the most effective and clean way to move passengers from one point to another. When not writing for Your Green Wealth, he is a business developer for renewable energy projects. Copyright © TESLARATI. All rights reserved. S&P Global, at the ESG Industry Report Card: Autos and Auto Parts, rates Tesla as B-/Negative. But we do find similarities in their assessments. Suppliers involved in sourcing Cobalt for the electric automaker are required and expected to follow Tesla’s Code of Business Conduct and Ethics. The financial firm had actually been calling for Tesla to release an environmental impact report since 2017, which was around the same time when reports and … The eventual phasing out of Cobalt from the batteries Tesla uses requires an extreme process of due diligence, now. Tesla is building the Giga Berlin factory without certain permits. 1/5 of cobalt is used to produce EVs and in this site that just talks about meneral they even cite Tesla as a major consumer. Their governance is amazing …”. Compensation Committee Report ... which reduces the environmental impact of our annual meeting and our costs. Since those agencies use different criteria, we do not expect to find a complete consensus. When it comes to Tesla’s governance, a good example of bad stakeholder management is Elon Musk’s tweet from April 2017. The increasing interest of the individuals in this industry is that the major reason for the expansion of this market”. Home | ESG | Is Tesla Sustainable? According to Sustainalytics, Tesla has an ESG risk rating of 31.1 points, which is classified as high risk (the lower; the better). The environmental impact of zero-emission transport and energy products, like the products that Tesla produces and sells, is undeniably more positive than the greenhouse gas-emitting alternatives. According to Tesla’s Impact Report, 550,000 vehicles have been sold, 10,000,000,000 miles have been driven, and more than 4,000,000 metric tons of CO2 have been saved, which, as Tesla highlights, is the “equivalent of saving emissions from being released into the environment from over 500,000 ICE vehicles with a fuel economy of 22 miles per gallon.” Tesla’s new impact report is only the second it has ever produced. The Results. Right after is Hyundai Ioniq models 2019, 2018 and 2017, with 136 MPGe. Much of the world’s lithium is extracted from brines beneath the deserts of … When confronted by investors demanding better corporate governance, Elon Musk tweeted “This investor group should buy Ford stock. During manufacturing, EVs (electrical vehicles) have on average a higher environmental impact than conventional ICE (internal combustion vehicles). The legacy of Tesla: one fact that cannot be denied is Tesla’s influence in the electric vehicle industry and how the company was able to create enough momentum for EVs. Let us look deeper into each aspect of Tesla’s sustainability and its ESG ratings. Tesla Releases Environmental Impact Report April 16, 2019 Contributor News 6 Comments Tesla published on Monday its first ever Impact Report, a study of the impact the company’s products and operations have on the environment and communities. During operation and use, Tesla EVs are expected to have a smaller environmental impact than ICE, since EVs have zero tailpipe emissions and they enable the use of cleaner energy sources. 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