ESG
May-June. 2026 | @ green
ESG
15
AS environmental, social and governance( ESG) considerations become increasingly embedded in global investment decisions, the recent rating assigned to SpaceX has reignited a familiar question: are ESG scores truly measuring sustainability, or are they measuring something else entirely?
Just one day before its US $ 75 billion initial public offering( IPO), the aerospace company received a CCC rating from MSCI, the lowest classification available under the index provider ' s corporate ESG framework.
The score placed SpaceX among the weakest performers in MSCI ' s ratings universe and immediately drew attention from investors, sustainability professionals and supporters of the company alike.
At first glance, the rating appeared surprising. SpaceX is widely regarded as one of the world ' s most innovative companies, helping drive advancements in reusable rocket technology and commercial space exploration. Yet ESG ratings are rarely designed to measure innovation alone.
Instead, providers such as MSCI assess how effectively companies manage sustainabilityrelated risks that may affect long-term financial performance. These can include environmental impacts, labour practices, corporate governance structures and exposure to controversies.
For many observers, the SpaceX case illustrates the widening gap between public perception and the technical criteria used by ESG ratings agencies.
The discussion gained further momentum after Founder and Chief Executive Elon Musk responded to the rating on social media, writing: " Unfortunately, electric rockets are impossible."
WHAT DOES ESG MEASURE?
The comment reflected a criticism often levelled at ESG frameworks- that companies operating in strategically important or emissions-intensive industries can find themselves penalised despite contributing to technological progress.
However, ESG specialists note that ratings are not intended to determine whether a company ' s products benefit society. Rather, they focus on how companies identify, manage and disclose risks that could influence business performance and shareholder value.
In SpaceX ' s case, governance emerged as a key area of concern. Issues highlighted by analysts included the company ' s dual-class share structure, which grants Musk significant voting control, and governance arrangements that some investors believe reduce accountability.
The company also received a low controversy score, contributing to its overall rating.
The debate surrounding SpaceX has also highlighted a broader challenge within sustainable finance: the lack of consistency across ESG assessments.
Multiple studies have shown that ESG ratings can vary considerably from one provider to another. Researchers have found that agencies often disagree not because they apply different weightings, but because they measure and define sustain-
A rating under scrutiny
� SpaceX received MSCI ' s lowest ESG rating ahead of its US $ 75 billion IPO.
ability factors differently. A DIVIDED LANDSCAPE
As a result, a company may receive a relatively strong rating from one provider while receiving a weaker assessment elsewhere.
For investors, this creates both opportunities and challenges. ESG scores offer a useful starting point for evaluating risk, but many market participants increasingly view them as one input among many rather than a definitive judgment on a company ' s sustainability credentials.
The issue has become important enough to attract regulatory attention. Policymakers, particularly in Europe, have moved to introduce stricter oversight of ESG rating providers to improve transparency, comparability, and market confidence.
Supporters believe
� The assessment has reignited debate over whether ESG ratings accurately reflect corporate sustainability performance.
� The case highlights growing calls for greater transparency and standardisation in sustainable finance.
MEASURED CHALLENGES: SpaceX ' s recent ESG rating has sparked wider discussions about how sustainability risks and corporate performance are assessed.( Photo by: Unsplash)
such measures could help create a more reliable framework for sustainable investing. Critics argue that sustainability remains too complex to be reduced to a single score.
The SpaceX controversy arrives at a time when ESG investing is undergoing a period of reassessment. Investors continue to demand better sustainability data, while companies face increasing scrutiny over governance, climate risk and disclosure practices.
Yet the debate also demonstrates that ESG ratings remain far from universally understood. A low score does not necessarily indicate that a company lacks technological value or future growth prospects, just as a high score does not guarantee positive environmental outcomes.
As sustainable finance continues to mature, the focus may increasingly shift away from headline ratings and towards a deeper understanding of what those ratings actually measure.
The discussion sparked by SpaceX suggests that, for many investors, the most important question is no longer the score itself, but the methodology behind it. – @ green
INSIDE THE ESG DEBATE: Elon Musk( pictured) has remained one of the most vocal critics of ESG ratings, questioning how sustainability performance is assessed.