10 Best ESG Stocks To Buy In 2024

by | Dec 4, 2023 | ESG, Sustainability

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The best ESG stocks are financially sound, investable companies dedicated to improving the world while providing substantial returns to shareholders. The corporation’s actions must be coordinated to promote programs beneficial to the environment, staff members, neighbourhoods, and shareholders. ESG rating agencies like MSCI and Sustainalytics must be able to verify their performance history. Investing in the best ESG stocks can help fund long-term projects such as conserving energy, reducing waste, improving employee conditions, ethical business practices, and other initiatives.

What are the Best ESG Stocks to Buy in 2023?

Check out some investment-worthy best ESG stocks listed below:

What are the Best ESG Stocks to Buy in 2023?

1. Idexx Laboratories

Idexx manufactures and sells diagnostic equipment for pets and cattle, primarily to veterinarians and animal hospitals, and is one of the best ESG stocks to invest in 2023.

Business highlights: Pet adoptions, which have surged due to the epidemic, increasing overall spending on pet healthcare and Idexx’s profit. As adopted dog’s age, the company’s leadership position and outstanding product development performance should fuel momentum over the next several years. Idexx’s revenue surpassed $3 billion for the first time in 2021, representing a 19% rise. Earnings per share increased 12% yearly in 2021, discounting a $0.25 one-time benefit reported the previous year.

Highlights from ESG: To assist compliance with the company’s code of ethics, Idexx created a global whistleblower policy in 2020. Since 2017, Idexx has also cut energy use per square foot by 15% and indoor water use by 20%. The company is preparing for a third-party carbon footprint and ESG materiality evaluation.

2. Microsoft

Microsoft is the world’s largest software corporation and a prominent provider of cloud platforms.

Business highlights: Microsoft’s subscription revenue from software products is substantial and expanding. With its Azure platform, the corporation is also the No. 2 leader in cloud computing. The success of Azure, together with Microsoft’s active acquisition pipeline, could underpin substantial future growth. Microsoft stockholders have earned a cumulative annualized return of 25% during the last 15 years. Microsoft boosted revenues by 18% to $168 billion in the fiscal year ended June 30, 2021, and diluted earnings per share by 40% to $8.05.

ESG highlights: Microsoft is a renowned ESG firm due to its expertise in energy conservation. Microsoft aims for 100% sustainable energy by 2025, thanks to its cooperation with the Black-owned solar startup Volt Energy.

3. Best Buy

Best Buy is a big consumer electronics retailer in North America. The company also offers home media and computing systems design, installation, and maintenance services.

Business highlights: Best Buy profited from increased demand for home office solutions and entertainment devices during the pandemic. The store is leveraging its installed base to cross-sell services like tech support subscriptions. That business segment has potential, particularly if Best Buy expands beyond technology-specific services.

Best Buy set new revenue and earnings records in fiscal year 2022, which ended on January 29, 2022. Revenue increased by 8.5% to $51.7 billion, while GAAP EPS increased by 44% to $9.84. Best Buy’s long-term total return to shareholders is 16.5%.

ESG Highlights: Best Buy’s factory in Chino, California, attained 100% trash diversion in 2020. This was a significant step towards the company’s objective of diverting all solid waste from landfills. In addition, the firm has pledged $10 million to construct teen tech centres in Los Angeles where young people may learn about programming, design, and creating music.

4. Salesforce

Salesforce offers customer relationship management (CRM) software, tools that assist organizations in selling more products and services by utilizing customer data. Salesforce serves major corporate customers, which leads to consistent performance. They have a dominant market share and consistent, subscription-based revenue. Salesforce also bought Slack, a commercial communication and team management tool with a subscription model. Salesforce has a lengthy history of providing stockholders with double-digit annual returns. Revenues of $26.49 billion in the fiscal year 2022 represented an increase of 25 per cent over the previous year. In the fiscal year 2023, they reported first-quarter sales of $7.41 billion, a 24% increase from a year earlier.

ESG Highlights: Salesforce has reached net-zero carbon emissions throughout its value chain and operates entirely on renewable energy. In addition, the corporation has formed a task force on racial equality and justice and has invested $16 million in equal pay programs.

5. Cadence

Cadence provides software and hardware for more efficient design of integrated circuits, systems on chips, and printed circuit boards.

Business highlights: There is a constant demand for specialized chips and chips that are quicker, smaller, and more efficient. Cadence’s other efforts in 5G mobile, machine learning, and self-driving cars are also gaining traction. These developments and the recently launched Xcelium app should drive the company’s continued growth. Cadence has generated 29% of total annualized returns for stockholders over the last ten years. In 2021, the company generated diluted EPS of $2.50 on revenue of $2.99 billion. The company anticipates total revenue of $3.395 billion or more for the fiscal year 2022.

Highlights from ESG: Cadence has achieved female pay fairness globally. The United States also has wage equity based on race and ethnicity. Between 2019 and 2025, the corporation hopes to reduce carbon emissions by 15%. Cadence adopted a supplier code of conduct in 2020 to expand its governance requirements throughout the supply chain.

6. Adobe

Another best ESG stocks to invest in, Adobe supplies creatives with software, publishing, cloud storage, and marketing analytics solutions for corporate teams.

Business highlights: Adobe, through its iconic Photoshop software, is a prominent leader in digital content creation. Adobe software subscriptions provide a consistent, multibillion-dollar business stream. The corporation’s updated marketing and analytics suite should encourage more significant client interaction and future growth. Adobe reported about $16 billion in revenue in fiscal 2021, a 23% increase over the previous year. In the second quarter of the fiscal year 2022, revenue reached a new high of $4.39 billion. Over the last ten years, the corporation has returned about 30% of its profits to shareholders.

ESG Highlights: Adobe has achieved female pay equity globally. Additionally, the corporation has contributed about $87 million in communities to profit from 1.6 million underrepresented minorities. Adobe gets half of its energy from renewable sources, and the company has set a goal of getting all its power from renewable sources by 2035. In December 2021, MSCI raised Adobe’s ESG score from AA to AAA.

7. Pool

Swimming pool supplies are sold to pool builders, contractors, retail outlets, and repair firms by Pool. Pool dominates its industry, selling to 120,000 wholesale customers in North America, Europe, and Australia. The company has a strong track record of expanding its market share, completing significant acquisitions, and improving operational efficiency. Pool has capitalized on a surge in demand for swimming pools caused by the pandemic. In 2021, the corporation announced record sales and earnings per share. Sales jumped 35% yearly to $5.3 billion, and diluted EPS increased 78% annually to $15.97. The company’s EPS for the fiscal year ended March 31, 2022, was $17.96, representing a 68.8% rise year over year. The 10-year annualized total return of the pool is about 30%.

Highlights from ESG: Pool uses Eco Select products and is a member of the EPA’s WaterSense program. The company provides resources to clients to help them utilize water and handle wastewater sustainably. Pool has also given children free swimming lessons and donated to human rights organizations and the National Forest Foundation.

8. Nvidia’s

Graphics processing units (GPUs) are manufactured by Nvidia and are used in game consoles, supercomputers, robots, and self-driving automobiles.

Highlights of the business: Nvidia is the leading GPU supplier in the gaming industry. With its primary markets in machine learning and autonomous vehicles, the company can achieve long-term growth outside of gaming. Nvidia’s total annualized return to stockholders exceeds 50% during 10 years. Revenue for the fiscal year 2022 increased 61% to $26.91 billion, while GAAP EPS increased 123% to $3.85.

Highlights from ESG: Treating people somewhat, fostering diversity and inclusion, and driving social change with its products are among Nvidia’s ESG goals. Among the critical acts made in pursuit of these objectives are:

  • Payments were made to vendors and contractors even when facilities were stopped due to COVID-19.
  • Nvidia has more than tripled the number of Black employees.
  • Developed the DGX SuperPOD, the world’s fifth most efficient supercomputer.

9. Lam Research

Lam manufactures and services semiconductor fabrication equipment. The company works in deposition, etching, and cleaning chipmaking phases.

Business highlights: Lam benefits from the increased need for cutting-edge semiconductor design. The company’s key competitive advantage is its 60,000-unit installed base. The network generates ongoing service income and valuable feedback from chipmakers, which can be used to steer later product development. Lam’s income for the fiscal year ending June 29, 2021, surpassed $14.6 billion, up from $10 billion the previous year. The company’s earnings per share surged by more than 70%. Lam announced $4.06 billion in revenue in the first quarter of 2022.

Highlights from the ESG: Lam is implementing sustainability initiatives to attain 100% renewable energy by 2030 and net-zero emissions by 2050. To encourage workplace diversity, the company provides micro-inequity training and gender equality support.

10. Intuit

Intuit serves consumers as well as small and medium-sized enterprises. Intuit provides subscription-based TurboTax, Mint, and Credit Karma to consumers. Quickbooks, Intuit’s subscription-based accounting software, is used by businesses. There are payroll and payment options available that are connected with Quickbooks.

Business highlights: Intuit is the market leader in two legacy segments: tax maintenance and business accounting software. In late 2021, the company purchased Mailchimp, a marketing platform for small and medium-sized businesses. Mailchimp and Credit Karma could help Intuit’s already robust operations grow. Intuit’s revenue in 2021 will exceed $9.5 billion, with a total income of more than $2 billion. Over the last five years, the company has delivered full annualized returns of about 30% to stockholders.

Highlights from ESG: Since 2015, Intuit has been carbon-neutral. They are on target to be carbon-neutral by 2030. The corporation has achieved global gender pay equity and equal compensation for minority groups in the United States. Intuit is routinely ranked as one of the finest large technology companies to work for.

Conclusion

Best ESG stocks selection processes and interpretation of ESG variables can differ significantly, so one should read the fund paperwork carefully to discover a good fit for the ESG criteria if someone wants to support a specific cause, such as climate change or conscious capitalism. One can broaden the fund and stock research to include sustainable, impact, and socially responsible investing. These are similar to ESG but are frequently more cause-oriented. ESG screening is another tool investors can employ to do good while reducing risk to their long-term wealth. With these best ESG stocks in 2023, you can make a better and more informed investment decision.

FAQs

Q1. Who has made the most ESG investments?

With $110 billion in assets under management, BlackRock is the largest ESG asset manager, encompassing 20 of the top 100 such funds. DWS Group was second with $36 billion in AUM (11 funds), next to Parnassus Investments with $33 billion (three funds).

Q2. What does the future of ESG look like in India?

ESG adoption will stimulate company growth, improve public image, and assist companies in raising financing at a cheaper cost. The government closely monitors companies in high-emitting industries such as industry and energy.

Q3. Is ESG a worthwhile long-term investment?

Companies that prioritize ESG concerns are more likely to prioritize long-term business operations. By considering environmental and social risks, these businesses can mitigate future threats to their operations.

Also Read: What Are The Different Types Of ESG Services?

 

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