13 Best ESG Stocks To Buy Now

Published on October 30, 2023 at 9:03 am by Syed Ijaz in Hedge Funds, Lists, News

In this article, we will take a look at the 13 best ESG stocks to buy now. To see more such companies, go directly to 5 Best ESG Stocks To Buy Now.

2023 is shaping up to be a year where firms are prioritizing their environmental, social, and governance, or ESG, practices and investing more in sustainable projects. For some organizations, this year is as business as usual but for others, it may be a year of change and disruption. According to research compiled by S&P Global, around $8.4 trillion in US investment assets last year were retained by companies that incorporated ESG into their business decisions. PricewaterhouseCoopers estimated in a research report that asset managers around the world are expected to raise their ESG-related assets under management to $33.9 trillion by 2026, up from $18.4 trillion in 2021. The $33.9 trillion amount will represent 21.5% of assets under management held by asset managers. In the US, ESG-oriented assets under management would reach around $10.5 trillion in 2026, while in Europe, it would jump to $19.6 trillion.

Historically, organizations allocated their energy and capital to enhance their financial picture to retain a competitive edge against competitors. But with the passage of time, investors are keen to put their capital into socially conscious organizations. In the mid-1990s, the concept of the triple bottom line was born when entrepreneur and Volans co-founder John Elkington invented the word to evaluate the sustainability performance of corporations in America. But what is the triple bottom line? Harvard Business School defined it as:

The triple bottom line is a business concept that states firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line.”

Bloomberg said this year that ESG assets may hit a $50 trillion market size by 2025, which will represent over a third of the expected $140.5 trillion in total international assets under management.

“Around the world, fund managers are convinced of the link between ESG and a company’s shareholder value, and this link is a key input for investment decisions,” Bloomberg said.

The research also highlighted that 71% of global business leaders say that “eventually” no investment strategy will be considered without ESG. Bloomberg also projected that an investment of roughly $2.1 trillion is required in the energy transition from 2022 to 2025. The amount includes electrified heat, energy storage, and nuclear power, in addition to renewable energy projects.

Market regulators are implementing tough benchmarks to enhance ESG funds’ reporting. Not only North America and Europe have adopted stringent requirements, but Asia and Australia are also imposing strategies for ESG reporting, the Official Monetary and Financial Institutions Forum said. The forum also added that Australia, Hong Kong and Singapore have all offered guidance to standard disclosures on the ESG integration with the investment procedures. Canadian and the European Union regulators are moving a step ahead with fund classification.

Considering the importance of ESG, we decided to take a look at some of the best ESG stocks to buy now. You can also take a peek at Top 20 Most Profitable Energy Companies in the World and 12 Best Booming Stocks to Buy Now According to Hedge Funds.

A modern solar array, its panels glistening in the bright morning sun.

Our Methodology

To compile the list of the best ESG stocks to buy now, we selected 40 companies from the Vanguard ESG U.S. Stock ETF and iShares ESG Aware MSCI EAFE ETF. We then picked the largest companies in terms of capitalization and then ranked them based on Insider Monkey’s database of 910 hedge funds tracked at the end of Q2 this year. The ranking was based on the ascending order of the number of hedge fund investors in each stock and then the top 13 ESG stocks to buy now are selected.

Best ESG Stocks To Buy Now:

13. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 106

As one of the largest global banks by assets, JPMorgan Chase & Co. (NYSE:JPM) ranks 13th in our list of the best ESG stocks to buy now. In 2022, JPMorgan Chase & Co. (NYSE:JPM) financed and facilitated about $197 billion in climate, community development and sustainable development projects and initiatives. In its 2022 ESG report, Jamie Dimon-led JPMorgan Chase & Co. (NYSE:JPM) said that the management set a target to finance and facilitate over $2.5 trillion in climate change from 2021 to 2030. Last year, JPMorgan Chase & Co. (NYSE:JPM) also set aside roughly $40 billion towards home ownership, lending to small businesses, and affordable housing. According to JPMorgan Chase & Co. (NYSE:JPM), sustainable investing is here to stay.

106 of the 910 hedge funds profiled by Insider Monkey database had held a stake in JPMorgan Chase & Co. (NYSE:JPM). During that time, the largest stakeholder was Citadel Investment Group which owned about 6.2 million stakes of the company that were valued at $906.8 million.

12. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 109

Adobe Inc. (NASDAQ:ADBE) ranks 12th in our list of the best ESG stocks to buy now. The company has developed and implemented ESG initiatives over the years. Adobe Inc. (NASDAQ:ADBE)’s Adobe Document Cloud mitigates the waste and inefficiency related to paper-based document procedures. According to Adobe Inc. (NASDAQ:ADBE), the Document Cloud saves more than 27 million gallons of water, 1.5 million pounds of waste and 23.4 million pounds of carbon dioxide emissions for every 1 million pages signed on a daily basis. The company thoroughly focuses on its diversity, equity and inclusion activities. In its 2022 corporate social responsibility report, Adobe Inc. (NASDAQ:ADBE) said that it has more than 3% of Black workforce in the US, while it also hired more than 7% of underrepresented minority members for leadership roles in the country. The company anticipates to empower its operations with 100% of renewable energy, beginning 2025.

Out of 910 hedge funds profiled by Insider Monkey, 109 held stakes in Adobe Inc. (NASDAQ:ADBE). The largest stakeholder was Citadel Investment Group which owned roughly 2 million stakes that were worth $971.9 million.

11. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 111

UnitedHealth Group Incorporated (NYSE:UNH) is a part of the National Academy of Medicine’s Action Collaborative on Decarbonizing the US Health Sector and expects to reach operational net-zero target by 2035. The Minnetonka, Minnesota-based healthcare firm has also set a target to cut Scope 1 and 2 emissions by 60% through 2030. UnitedHealth Group Incorporated (NYSE:UNH) also said that it reduced inbound paper by 24% last year by enhancing procedures and technologies for smooth consumer experience. In 2022, it also rolled out eight Leader Advisory Councils that connected over 200 leaders throughout the Women, African American, Hispanic/Latino, Asian, LGBTQ+, Disability Inclusion, and Military, Veteran & Spouses workforce segments.

Insider Monkey took a look at Q2 hedge fund portfolios for UnitedHealth Group Incorporated (NYSE:UNH) and found that 111 had stakes in the firm. Rajiv Jain’s GQG Partners was the largest stakeholder of UnitedHealth Group Incorporated (NYSE:UNH) which bought 4.9 million stakes that were valued at $2.4 billion.

10. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 114

One of the largest entertainment companies, Netflix, Inc. (NASDAQ:NFLX) ranks 10th in our list of the best ESG stocks to buy now. Netflix, Inc. (NASDAQ:NFLX) provides TV series, documentaries, movies, and much more on its platform with monthly subscriptions globally. In terms of ESG, the firm plans to halve its emissions by 2030. Roughly 50% of its employees are women as Netflix, Inc. (NASDAQ:NFLX) offers equal employment opportunities to people around the globe. In the US alone, 50% of its staffers are from historically excluded ethnic and/or racial backgrounds. From 2022, the company will annually bring its net carbon footprint to zero. Last year, Netflix, Inc. (NASDAQ:NFLX) also achieved its global operations with 100% renewable electricity, according to its 2022 ESG report.

Out of 910 hedge funds profiled by Insider Monkey, 114 had stakes in Netflix, Inc. (NASDAQ:NFLX). The largest stakeholder was Ken Griffin’s Citadel Investment Group which owned about 5.9 million stakes of the firm that were valued at $2.6 billion.

9. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 122

Salesforce, Inc. (NYSE:CRM) ranks 9th in our list of the best ESG stocks to buy now. The company provides comprehensive enterprise resource planning solutions and customer relationship management platforms. In its fiscal 2023 ESG report, the California-based company said that it maintained net zero residual emissions and provided more than $82 million as grants and donations to partners and communities globally. In terms of workforce, Salesforce, Inc. (NYSE:CRM) has 52% of the US employees identified as underrepresented groups. Salesforce, Inc. (NYSE:CRM) has also spent more than $100 million with Black-owned businesses. In Q2, it reported earnings of $1.28 per share and revenue of $8.6 billion.

Insider Monkey took a look at 910 hedge funds portfolios for Q2 2023 investments and found out that 122 had a stake in Salesforce, Inc. (NYSE:CRM). The largest stakeholder was Harris Associates which had 5.1 million stakes of Salesforce, Inc. (NYSE:CRM) that were valued at $1.1 billion.

8. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 135

One of the largest companies in terms of market capitalization, Tim Cook-led Apple Inc. (NASDAQ:AAPL) ranks 8th in our list of the best ESG stocks to buy now. By 2030, the technology giant expects to manufacture all products carbon neutral. Last year, Apple Inc. (NASDAQ:AAPL) also recycled over 40,000 metric tons of electronic scrap, while roughly 20% of its materials shipped in 2022 came from recycled and renewable sources. Since 2008, Apple Inc. (NASDAQ:AAPL) has cut more than 70% of energy consumption on average per product. It has also produced its Apple Watch as carbon neutral and from 100% of clean electricity. This year, Apple Inc. (NASDAQ:AAPL) announced an additional plan to commit up to $200 million to nature-based projects.

At the end of Q2 this year, Apple Inc. (NASDAQ:AAPL) had 135 hedge funds investors out of 910 profiled by Insider Monkey database. The largest stakeholder was Warren Buffett’s Berkshire Hathaway which had 915.6 million stakes of the firm that were valued at around $177.6 billion.

7. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 139

New York-based Mastercard Incorporated (NYSE:MA) is a payment processing company globally. It intends to reach net-zero emissions by 2040 and sup+port its suppliers’ decarbonizing strategies. Mastercard Incorporated (NYSE:MA) is also a member of RE100, a coalition of businesses formulating plans toward zero carbon emissions. In April last year, Mastercard Incorporated (NYSE:MA) Chief Executive Michael Miebach announced plans to link all employees’ bonuses with ESG initiatives to reduce its carbon usage, enhance financial inclusion and gender pay parity. This year, the firm said it intends to eliminate first–use, PVC plastics from payment cards on its network by 2028 as part of its Sustainable Card Program rolled out in 2018.

Insider Monkey took a look at hedge fund portfolios for Mastercard Incorporated (NYSE:MA) second quarter of 2023 investments and concluded that 139 had stakes in the firm. Charles Akre’s Akre Capital Management was Mastercard Incorporated (NYSE:MA)’s largest stakeholder which owned about 5.9 million stakes for about $2.3 billion.

6. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Ranked 6th in our list of the best ESG stocks to buy now, Alphabet Inc. (NASDAQ:GOOG) has planned to commit to net-zero emissions throughout all of its operations and value chain by 2030. The technology giant also intends to cut 50% of its combined Scope 1, 2, and 3 absolute emissions before 2030. In terms of workplace parking, Alphabet Inc. (NASDAQ:GOOG) has designated more than 8% of parking spots for EVs with charging stations in 2022. It also opened an all-electric campus in 2022. Alphabet Inc. (NASDAQ:GOOG) started reporting its carbon footprint since 2006. According to the firm, its packaging was at least 96% plastic-free for new products introduced and produced last year.

“In fact, it’s estimated that one-third of all assets under management — valued at $53 trillion — will have an ESG mandate by 2025,” Google said in a blog post in July this year.

At the end of June 30, Alphabet Inc. (NASDAQ:GOOG) had 152 hedge funds investors out of 910 funds tracked by Insider Monkey database. Harris Associates was the largest stakeholder with 26.9 million stakes that were valued at $3.2 billion.

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