In recent years, the investment landscape has seen a significant shift towards socially responsible investing strategies. Among these, humane investing has gained considerable traction. Humane investing is a comprehensive socially responsible investing strategy that encompasses several key aspects. Firstly, it involves the reduction of animal products. This can range from food and fashion to pharmaceuticals and cosmetics, focusing on companies that minimize or eliminate the use of animal products. Secondly, it ensures that businesses respect human rights and address any adverse outcomes. This includes fair labor practices, anti-discrimination policies, and ethical supply chain management. Thirdly, it promotes environmental conservation, such as reducing carbon footprints, sustainable sourcing, and waste reduction. Lastly, it involves shareholder activism, where investors engage with companies to improve welfare practices.
READ ALSO: 12 Most Promising Green Stocks According to Hedge Funds and 10 Best Ethical Companies To Invest In According to Reddit.
On January 24, Morningstar reported that the landscape of sustainable investing is entering a new era of complexity, characterized by a stark divide between the United States and Europe. This shift was precipitated by a series of significant events, including President Donald Trump’s withdrawal of the United States from the Paris Agreement. The decision underscores a growing divergence in environmental, social, and governance (ESG) priorities, with Europe taking a leading role and the US moving in the opposite direction.
Europe has positioned itself as a leader in sustainable investing, with a pledge to achieve “climate neutrality” by 2050, or net-zero emissions. The European Union has also implemented ambitious mandatory ESG and sustainability reporting requirements, setting a high bar for corporate transparency and responsibility. This regulatory framework not only supports sustainable investing but also creates a fertile ground for asset managers to develop and market ESG-focused products with higher profit margins and a global reach.
Conversely, the US under the Trump administration has taken a different path. Trump’s inaugural speech signaled a pivot toward promoting fossil fuels and scaling back support for renewable energy sources. This shift is reflected in the actions of major financial institutions, such as the world’s six largest banks withdrawing from a major climate coalition, and BlackRock, the world’s largest asset manager, pulling out of a similar group. This move is seen as a significant setback by sustainably-minded investors as the financial industry plays a crucial role in financing companies and achieving net-zero emissions targets set by the Paris Agreement.
For asset managers, this two-speed world presents both challenges and opportunities. European managers, who operate in a market where sustainability is mainstream, are likely to gain a competitive advantage. They can leverage their expertise in ESG to attract asset owners, such as pension funds and sovereign wealth funds, who are increasingly allocating to ESG-focused strategies. This could lead to a preference for European managers, especially in impact investing, where they can demonstrate greater commitment and expertise.
US-based managers, on the other hand, are likely to adopt a more pragmatic approach, aligning their strategies with local market demands and avoiding vocal advocacy for ESG. This “greenhushing” strategy is necessary to navigate the regulatory and political headwinds in the US while maintaining a global presence, particularly in Europe and the Asia-Pacific region.
As the demand for ethical and sustainable investment options grows, humane investing provides a compelling pathway to drive positive change while achieving financial growth. With that in context, let’s take a look at the 8 best humane stocks to invest in now.
Our Methodology
To compile our list of the 8 best humane stocks to invest in now, we used environmental, social, and governance (ESG) ETFs to compile a list of 25 companies. We then looked at their ESG rating from S&P Global and picked 8 companies that have a minimum ESG score of 60. We also used Insider Monkey’s Hedge Fund database as of Q3 2024 to find the number of hedge fund holders for each company. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Humane Stocks to Invest in Now
8. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Investors: 47
ESG Score: 71
Ecolab Inc. (NYSE:ECL) specializes in water, hygiene, and energy technologies that provide sustainable solutions to optimize resource use for its clients. The company primarily serves industries such as food service, healthcare, and energy to maintain cleanliness and comply with health standards.
Ecolab Inc. (NYSE:ECL) is concentrating on innovation, the company has allocated nearly $1.5 billion to developing new technologies and solutions and has a robust innovation pipeline that emphasizes clean tech, high tech, and biotech sectors. In clean tech, Ecolab Inc. (NYSE:ECL) is advancing solutions for water circularity and data center cooling solutions, which are critical areas as global demands for water and energy efficiency continue to rise. In high tech, the company is addressing challenges in microelectronics to support the growing needs of AI and data processing. By investing in cutting-edge digital tools and service capabilities, Ecolab Inc. (NYSE:ECL) aims to accelerate sales growth to a 5% to 7% range and achieve a 20% operating income margin within the next three years.
Ecolab Inc. (NYSE:ECL) is also enhancing customer value and operational efficiency through its One Ecolab initiative. This program leverages digital technologies to deliver superior business outcomes, operational performance, and environmental impact.
7. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Investors: 59
ESG Score: 63
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical company renowned for its antiviral drugs used for the treatment of HIV, hepatitis, and other critical diseases. Gilead Sciences, Inc. (NASDAQ:GILD) is known for its efforts to improve global health outcomes and its commitment to ethical business practices, including access to essential medicines for underserved communities. The firm’s innovative research and development makes it a leader in the healthcare industry.
Gilead Sciences, Inc. (NASDAQ:GILD) is concentrating on maintaining its long-term leadership in the HIV market, which remains a core focus of the company. The company recently introduced Biktarvy, a once-daily single-tablet regimen, which has solidified its position as the market leader. Furthermore, the company is progressing in the development of Lenacapavir, a groundbreaking capsid inhibitor, which represents a significant step forward in HIV treatment and prevention. Lenacapavir, the first and only twice-yearly injectable treatment for HIV, has shown exceptional efficacy and safety in clinical trials. Gilead Sciences, Inc. (NASDAQ:GILD) plans to launch Lenacapavir for both treatment and prevention, which is expected to transform the HIV landscape and address the needs of patients who require more convenient treatment options.
While HIV remains a cornerstone of Gilead Sciences, Inc.’s (NASDAQ:GILD) business, the company is also diversifying its portfolio to drive additional growth. Over the past five years, the company has invested heavily in oncology and inflammation. In oncology, Gilead Sciences, Inc. (NASDAQ:GILD) has 10 programs in Phase 3, including six for Trodelvy and four for its cell therapy platform, Yescarta and KTE-X19.
6. Moody’s Corporation (NYSE:MCO)
Number of Hedge Fund Investors: 67
ESG Score: 70
Moody’s Corporation (NYSE:MCO) is a financial services company known for credit ratings, risk analysis, and research. The firm’s clients include corporations, governments, and investors worldwide. Moody’s Corporation’s (NYSE:MCO) high ESG score is driven by its transparency in financial reporting and focus on risk assessment for climate change and sustainability factors. The company operates through two primary segments: Moody’s Investors Service (MIS) and Moody’s Analytics (MA).
Moody’s Corporation (NYSE:MCO) is actively expanding its market footprint across various regions and sectors to drive future growth. One key area of focus is emerging and domestic debt markets, where the company is building out its footprint and market leadership across Asia, Africa, and Latin America. These regions, while smaller than developed economies, are poised to experience higher economic growth rates and present significant opportunities for the company to capitalize on the growth.
Moody’s Corporation (NYSE:MCO) is also investing in sustainable and transition finance, recognizing the increasing demand for insights and analysis in the context of global net-zero commitments. The company’s analysts estimate that global clean energy investment needs will rise by 2.5 times by 2030, reaching around $4.5 trillion annually. By providing the necessary insights, analysis, and products, Moody’s Corporation (NYSE:MCO) aims to meet the growing demand for understanding how these investments translate to organizational progress on decarbonization efforts.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Investors: 74
ESG Score: 62
QUALCOMM Incorporated (NASDAQ:QCOM) is a leading semiconductor and telecommunications company recognized for its innovations in wireless technology. The company generates revenue through intellectual property licensing and the sale of semiconductors for mobile devices and IoT applications. The company’s efforts focus on energy-efficient technologies and supply chain responsibility.
QUALCOMM Incorporated (NASDAQ:QCOM) is leveraging the growing demand for on-device artificial intelligence (AI) and edge computing. The company views edge AI as a transformative technology that enhances the human-computer interface by offering context, immediacy, and personalization while ensuring privacy and security. During the recent Snapdragon Summit, QUALCOMM Incorporated (NASDAQ:QCOM) outlined its vision for AI-enabled edge computing and announced collaborations with Meta to support Llama 3.2 on Snapdragon-powered devices and with Amazon to develop a cloud-to-edge solution for customizing and deploying AI models. The company also introduced the Snapdragon 8 Elite, which features a second-generation custom Oryon CPU and a redesigned hexagon NPU, enabling advanced AI capabilities in mobile devices.
QUALCOMM Incorporated (NASDAQ:QCOM) is also expanding its footprint in the Industrial IoT (IIoT) sector with the launch of the Qualcomm IQ Series and the IoT Solutions Framework. These offerings are tailored for next-generation industrial edge applications and provide tools for automation, robotics, inspection, and advanced computer vision. Furthermore, the company is enhancing its connectivity and computing capabilities in its Networking Pro A7 Elite Platform to bolster its edge networking solutions and reinforce its leadership in industrial and IoT markets.
4. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Investors: 78
ESG Score: 63
Union Pacific Corporation (NYSE:UNP) is one of the largest freight rail networks in the United States and operates a vast network spanning 23 western states with over 32,000 miles of track. The company is known for its focus on fuel efficiency, emissions reduction, and community engagement. Union Pacific Corporation’s (NYSE:UNP) long-term sustainability goals align with the growing demand for eco-friendly transportation options.
Union Pacific Corporation (NYSE:UNP) is focusing on expanding mainline and terminal capacities, constructing new sidings, and extending existing ones. These initiatives are especially significant in key growth regions such as the Pacific Northwest, where the company is enhancing its ability to handle soda ash and export grain, and the Southwest, where it is boosting intermodal capabilities. Additionally, the company is investing in advanced technologies such as GPS tracking for containers and rail pulse to improve service reliability, offering customers real-time tracking and enhanced communication.
Union Pacific Corporation (NYSE:UNP) is also diversifying its service offerings to meet the changing demands of its customers. For example, the company recently introduced a new domestic intermodal service that has reduced transit times between Southern California and the Chicago area by two days. This innovation has attracted new customers and strengthened existing relationships.
3. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Investors: 85
ESG Score: 73
S&P Global Inc. (NYSE:SPGI) provides essential financial intelligence, ratings, and data analytics to investors and corporations. The company’s ESG initiatives include transparency in governance, climate risk analysis, and promoting sustainable investment practices. S&P Global Inc. (NYSE:SPGI) operates through five core divisions: Market Intelligence, Ratings, Commodity Insights, Mobility, and S&P Dow Jones Indices. These divisions collectively serve a diverse range of clients, from financial institutions and governments to corporations and individual investors.
S&P Global Inc. (NYSE:SPGI) is leveraging cutting-edge technology to enhance its products and services. The company has been at the forefront of integrating Generative AI (GenAI) across its divisions to improve user experience, automate workflows, and provide deeper insights. The company has introduced advanced analytics solutions and GenAI functionality through CapIQ Pro, which allows users to build predictive models and identify patterns more efficiently. Furthermore, in Commodity Insights, the company has transitioned to cloud delivery of AI-ready data on clean-energy technology and has introduced an AI-powered chatbot, ChatAI, which has significantly enhanced customer engagement and satisfaction.
Furthermore, S&P Global Inc. (NYSE:SPGI) has announced the integration of its Sustainable One business with the energy transition products and assets within Commodity Insights. This move aims to create unique and forward-looking solutions to help clients navigate the energy transition and the financial services sector.
2. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Investors: 116
ESG Score: 61
Salesforce, Inc. (NYSE:CRM) is a cloud-based software company known for its customer relationship management (CRM) solutions. The company promotes equality through its workplace policies and is also known for its commitment to philanthropy and innovation. Salesforce, Inc. (NYSE:CRM) comprehensive suite of products including Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, and Slack.
Salesforce, Inc. (NYSE:CRM) is transforming business operations with the launch of Agentforce, an innovative AI-powered platform that redefines customer service and support. Agentforce utilizes autonomous AI Agents to manage customer interactions with exceptional accuracy and efficiency. This reduces the workload on human agents while improving the overall customer experience. By automating routine tasks and delivering real-time insights, Agentforce unlocks new levels of productivity and operational efficiency. Companies such as Vivint and Adecco have reported significant benefits from adopting Agentforce, with Vivint resolving service cases 40% faster and Adecco processing 300 million job applications annually with remarkable speed and accuracy.
Salesforce, Inc. (NYSE:CRM) is also expanding its global presence, with a particular emphasis on highly regulated industries such as healthcare, manufacturing, and automotive. The company’s industry-specific solutions, including the recently introduced Life Science Cloud, are tailored to address the unique requirements of these sectors.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Investors: 193
ESG Score: 61
NVIDIA Corporation (NASDAQ:NVDA) is a global leader in accelerated computing and artificial intelligence (AI) semiconductors, software, and systems. The company’s products are integral to gaming, data centers, and autonomous vehicles. NVIDIA Corporation’s (NASDAQ:NVDA) Graphics Processing Units (GPUs), are increasingly used in applications that drive positive environmental and social impact, particularly in the field of Artificial Intelligence (AI), which can help optimize energy efficiency and solve complex problems across various industries.
NVIDIA Corporation (NASDAQ:NVDA) is making significant strides in the digital health sector by leveraging AI agents to address the growing labor shortage and rising healthcare costs. The company is developing and deploying domain-specific AI agents that can perform a wide range of tasks, from administrative support to patient care. These agents, built on the company’s AI Enterprise platform, are designed to integrate seamlessly into existing healthcare systems. In January, NVIDIA Corporation (NASDAQ:NVDA) announced a partnership with IQVIA, a leading clinical research and healthcare analytics company to develop custom AI models and workflows to streamline clinical research and bring new medicines to market faster.
NVIDIA Corporation (NASDAQ:NVDA) is also revolutionizing drug discovery through its BioNeMo platform, an end-to-end solution for AI-driven drug discovery. The platform supports the entire lifecycle of drug development, from target discovery to clinical trials. The company’s BioNeMo platform includes a suite of microservices and reference applications that can be easily integrated into existing drug discovery workflows.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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