March 1, 2023
Protecting the environment is in everyone’s interest, but the move by retail shareholders into ESG investing shows that going green can bring in a little “green” in the form of increased returns as well.
Known as socially responsible, impact or sustainable investing as well, ESG relies on environment, social and governance factors to drive investing decisions. Investments made by the individual investor are made by considering the environment, human wellbeing and the economy.
ESG investors are interested in making sound investments, but they are also interested in the ethics behind the companies they are backing, often viewing corporate social responsibility (CSR) and sustainability as important as well. Each retail shareholder determines that balance themselves based on how deeply they want to move their portfolios into ESG investing.
After scouring the internet, we found a plethora of assets that are rated highly among ESG investors, though we do not offer investment advice and retail shareholders should do their own research or work with their brokerage to find the right mix of ESG stocks. Here are some options to consider:
The Procter & Gamble Company (Tii:PG) has been around since 1837 but the company is as progressive as they come in terms of ESG. The consumer staple maker set a goal to purchase
100% renewable electricity in its global operations by 2030 (and it is already 97% there). It also has goals to reach net zero greenhouse gas emissions across its supply chain and operations by 2040.
The Home Depot (Tii:HD) is focused on ESG initiatives on a number of fronts, but it all begins with people. The company’s workforce is more ethnically diverse than the U.S. working population and it reduced its electricity use by about 11% year over year in 2021. About 14,000 of the company's employees volunteered across 150 cities nationwide in 2021.
Nvidia (Tii:NVDA) makes graphics processing units (GPUs) used in gaming consoles, supercomputers, robots and self-driving cars. The company was recognized as the best place to work in the U.S. by our employees. The company plans to purchase or generate enough renewable energy to match 100% of its global electricity usage. At the same time, its Hopper GPU architecture is up to 3.5x more energy efficient than NVIDIA Ampere architecture, which it succeeds. And NVIDIA powers the most efficient supercomputer on the November 2022 Green500 list.
Microsoft (Tii:MSFT), the world's largest software company and a dominant cloud platform provider is known in ESG investing circles for its work in energy conservation. Supported by its partnership with Black-owned solar company Volt Energy, Microsoft is working toward 100% renewable energy by 2025. By 2050, the company plans to offset all the carbon emissions it's produced since 1975.
Best Buy (Tii:BBY) is a consumer electronics retailer that also has services to design, set up, and maintain home media and home computing systems. In 2020, Best Buy's facility in Chino, Calif. achieved 100% waste diversion, a milestone in the company's goal to divert all solid waste from landfills. Best Buy also committed $10 million toward building teen tech centers in Los Angeles where young people can learn about programming, design and music production.
Adobe (Tii:ADBE) is a software, publishing and cloud storage company that also has marketing analytics tools for business teams. The company has achieved global gender pay parity. It also invested about $87 million in communities to benefit 1.6 million underrepresented minorities. Half of Adobe's energy comes from renewable sources, and the company has set a goal of obtaining all power from renewable sources by 2035.
Salesforce (Tii:CRM) supplies customer relationship management (CRM) software used in sales.
Salesforce has achieved net-zero carbon emissions across its company and 100% renewable energy for its operations. Salesforce also created a racial equality and justice task force and spent $16 million on equal pay initiatives.
The principles of ESG investing are not new. Religious and ethical beliefs have influenced investment decisions for hundreds of years. Muslims established investments that complied with Sharia law, which included prohibitions on weapons. And the first ethical unit trusts in the US and UK were developed by Quakers and Methodists.
While these companies are leaders in ESG, hundreds more are joining the movement each year.
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