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3 ESG Stocks to Buy With Focus Growing on Net-Zero
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Environmental, social, and governance or ESG companies refer to those that focus on sustainability rather than zeroing in just on the bottom line. Yes, they seek profit, but with minimal impact on the environment.
In recent human history, efforts have been made by governments around the world to look for sustainable energy options and push for net-zero carbon emissions. The Paris Climate Accords of 2015, and later summits on the environment in places like Davos, Switzerland, have set the tone for this global endeavor.
While the West has been leading the charge, climate change and its impact have lately become an area of focus across geographies. The ongoing war in Ukraine has also inadvertently pushed governments to co-opt green energy so that in the future, any supply-side crisis of fossil fuels can be avoided.
Despite this, 2022 was not a stellar year for investing in ESG. Net inflows into ESG funds plummeted 76% to $157.3 billion in 2022 from $649.1 billion in 2021. This was the lowest annual net inflow for ESG funds since $69 billion in 2018. But this was a period when governments and corporates ran for shelter, and surviving the day was more on the agenda than sustainable investing.
The important takeaway was that it was still a net inflow. Europe continued to be the hub for about 80-85% of all global ESG fund assets, capturing 90% of global ESG fund net inflows in 2022.
Eco-investing has now started taking center stage, as more and more members from the millennial and Gen-Z generation are taking a leading role as investors in these companies. With climate change being a major talking point among the youth, the socio-economic trend has also started taking a turn in favor of environmentally and ecologically sustainable businesses.
The technology sector is characterized by its quest for a rapid pace of innovation and has been a pioneer in embracing sustainable development. The 21st century has been marked by the fast integration of these innovations with people’s lives, more specifically, young people’s lives. ESG principles are becoming all the more significant with the youth of today. With the market witnessing a historic tech rebound in 2023, the focus is slowly shifting back to futuristic business.
As a result, an increasing number of companies are making ESG disclosures in their reports, flaunting how they have helped raise awareness and contributed to the betterment of society. Such companies are focusing on more eco-friendly operations and trying to minimize the impact on biodiversity.
Our Choices
These stocks are of companies that are committed to sustainable growth in business. Moreover, these companies broadly pass the ESG standard required to dub them as leaders in the sector, i.e, they regularly set, revisit and report on their ESG targets. The stocks below flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy), have lucrative earnings potential, and should be looked into.
Salesforce, Inc. (CRM - Free Report) : This company provides customer relationship management technology, has already achieved net-zero residual emissions across its value chain and met its goal of 100% renewable energy in operations. It has targeted the removal of all carbon emissions by 2040 and has innovated a custom-built platform to track its own carbon footprint. Salesforce also boasts working exclusively with suppliers with a 2024 carbon footprint reduction goal.
The company currently sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 4.6% north over the past 60 days. The company’s expected earnings growth rate for the current year is 42%. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA Corporation (NVDA - Free Report) : This mega-cap semiconductor company, which provides graphics and networking solutions, has reduced emissions by 15% per employee as of 2022 and has set a target to have 65% of its electricity usage come from renewable sources by the end of 2025. It has also made significant strides in the study of climate change by embarking on a project to help predict and mitigate environmental disasters.
The company currently sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 71% north over the past 60 days. The company’s expected earnings growth rate for the current year is 129.3%.
PepsiCo, Inc. (PEP - Free Report) : This global beverage giant has a set target of net-zero greenhouse gas emissions by 2040, and is working to promote regenerative agricultural practices. It has a target of making all its packaging materials recyclable, compostable, and biodegradable.
The company currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its next-year earnings has moved 0.3% north over the past 60 days. The company’s expected earnings growth rate for the current year is 7.5%.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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3 ESG Stocks to Buy With Focus Growing on Net-Zero
Environmental, social, and governance or ESG companies refer to those that focus on sustainability rather than zeroing in just on the bottom line. Yes, they seek profit, but with minimal impact on the environment.
In recent human history, efforts have been made by governments around the world to look for sustainable energy options and push for net-zero carbon emissions. The Paris Climate Accords of 2015, and later summits on the environment in places like Davos, Switzerland, have set the tone for this global endeavor.
While the West has been leading the charge, climate change and its impact have lately become an area of focus across geographies. The ongoing war in Ukraine has also inadvertently pushed governments to co-opt green energy so that in the future, any supply-side crisis of fossil fuels can be avoided.
Despite this, 2022 was not a stellar year for investing in ESG. Net inflows into ESG funds plummeted 76% to $157.3 billion in 2022 from $649.1 billion in 2021. This was the lowest annual net inflow for ESG funds since $69 billion in 2018. But this was a period when governments and corporates ran for shelter, and surviving the day was more on the agenda than sustainable investing.
The important takeaway was that it was still a net inflow. Europe continued to be the hub for about 80-85% of all global ESG fund assets, capturing 90% of global ESG fund net inflows in 2022.
Eco-investing has now started taking center stage, as more and more members from the millennial and Gen-Z generation are taking a leading role as investors in these companies. With climate change being a major talking point among the youth, the socio-economic trend has also started taking a turn in favor of environmentally and ecologically sustainable businesses.
The technology sector is characterized by its quest for a rapid pace of innovation and has been a pioneer in embracing sustainable development. The 21st century has been marked by the fast integration of these innovations with people’s lives, more specifically, young people’s lives. ESG principles are becoming all the more significant with the youth of today. With the market witnessing a historic tech rebound in 2023, the focus is slowly shifting back to futuristic business.
As a result, an increasing number of companies are making ESG disclosures in their reports, flaunting how they have helped raise awareness and contributed to the betterment of society. Such companies are focusing on more eco-friendly operations and trying to minimize the impact on biodiversity.
Our Choices
These stocks are of companies that are committed to sustainable growth in business. Moreover, these companies broadly pass the ESG standard required to dub them as leaders in the sector, i.e, they regularly set, revisit and report on their ESG targets. The stocks below flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy), have lucrative earnings potential, and should be looked into.
Salesforce, Inc. (CRM - Free Report) : This company provides customer relationship management technology, has already achieved net-zero residual emissions across its value chain and met its goal of 100% renewable energy in operations. It has targeted the removal of all carbon emissions by 2040 and has innovated a custom-built platform to track its own carbon footprint. Salesforce also boasts working exclusively with suppliers with a 2024 carbon footprint reduction goal.
The company currently sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 4.6% north over the past 60 days. The company’s expected earnings growth rate for the current year is 42%. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA Corporation (NVDA - Free Report) : This mega-cap semiconductor company, which provides graphics and networking solutions, has reduced emissions by 15% per employee as of 2022 and has set a target to have 65% of its electricity usage come from renewable sources by the end of 2025. It has also made significant strides in the study of climate change by embarking on a project to help predict and mitigate environmental disasters.
The company currently sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 71% north over the past 60 days. The company’s expected earnings growth rate for the current year is 129.3%.
PepsiCo, Inc. (PEP - Free Report) : This global beverage giant has a set target of net-zero greenhouse gas emissions by 2040, and is working to promote regenerative agricultural practices. It has a target of making all its packaging materials recyclable, compostable, and biodegradable.
The company currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its next-year earnings has moved 0.3% north over the past 60 days. The company’s expected earnings growth rate for the current year is 7.5%.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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