The world's most-famous electric-vehicle maker has lost its spot on the ESG version of the S&P 500 Index.
S&P Dow Jones Indices says that Tesla's score on environmental, social and governance standards has remained "fairly stable" over the past year, but that it has slipped down the ranks against improving global peers.
The index provider also cited concerns related to working conditions and the firm's handling of an investigation into deaths and injuries linked to its driver-assistance systems. A lack of low-carbon strategy and codes of business conduct also counted against Elon Musk's company, it said.
"While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens," Margaret Dorn, senior director and head of ESG indices for S&P Dow Jones in North America, said in a blog post.
Tesla didn't immediately respond to an emailed request for comment, though writing on Twitter, Mr Musk described ESG as a "scam".
Tesla also recently criticised ESG metrics as "fundamentally flawed" in an annual report, and in an April tweet Mr Musk said "corporate ESG is the devil incarnate".
Ms Dorn wrote that an analysis seeking to identify risks to the company stemming from any controversial incidents identified "two separate events centred on claims of racial discrimination and poor working conditions at Tesla's Fremont (California) factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot."
Both had a negative impact on Tesla's score, she said.
The S&P 500 ESG Index is tracked by at least 16 exchange-traded funds, according to the S&P Dow Jones website. Berkshire Hathaway, Johnson & Johnson and Meta Platforms are among other large companies that also don't make the list.
Kristin Hull, founder of Nia Impact Capital, a sustainability fund in Oakland, California that has been pressing Tesla to address worker issues, said she was relieved that there was "finally accountability".
"This move signals to other companies that ESG standards, and improving them, matters," she said. "And that there will be material, financial implications."