June 11—one day before SpaceX’s IPO—MSCI assigned the company its lowest possible CCC ESG rating, putting it at the bottom of its scale ahead of a roughly $75 billion public float.
MSCI said SpaceX was lagging its industry because of high exposure to ESG risks and failure to manage them, while governance concerns around share structure, insider control and board independence intensified scrutiny.
SpaceX also scored 1 out of 10 in MSCI’s controversies category—an orange flag—and 3.2 out of 10 on governance metrics, prompting one academic to call the case close to a “governance horror story” for public-market investors.
The rating could complicate demand from Europe-focused sustainable funds, where managers overseeing more than €6.5 trillion are debating whether SpaceX can meet the region’s disclosure rules.
The decision lands as index providers race to fast-track megacap IPOs: MSCI, FTSE Russell and Nasdaq have eased inclusion rules for companies like SpaceX, while S&P Dow Jones has not yet added it.