The outlook of the stock market investors has changed with time as investors have become more socially conscious in buying stocks of ESG companies. Such investors attach a lot of importance to the credentials of companies that demonstrate a greater degree of more awareness about the Environment, demonstrate Social responsibility and corporate governance. Indeed, they want to earn well from the investment but ensure indirect support some good cause for the betterment of the Environment and human lives. Buying ESG stocks is a responsible way of investing, and since such stocks have shown remarkable financial performance, investors are showing more interest in them. Especially during the pandemic, these stocks have outperformed – non-ESG stocks in terms of volatility and the reason for generating investors’ interest. Here are some ESG stocks 2022 that investors can follow closely and fulfill their goal of responsible investing.
ESG stocks 2022 are gaining more attention from investors
That investors are more and more evaluating the ESG aspects before investing in companies becomes clear from a report published by Ernst & Young (EY) in 2020 as part of a survey of ESG inclined investors. The report titled Climate Change and Sustainability Services Institutional Investor survey found that of 98% ESG-inclined investors, 72% undertake a structured review of ESG performance. Just two years ago, the number was 32%. Moreover, about 39% of respondents plan to take up a more structured approach in evaluating the ESG aspect of companies by giving up the informal assessment methods.
Here are some top ESG stocks for 2022 that investors can bet upon.
Microsoft (MSFT)
Microsoft is not only one of the leaders in the tech business but its ESG initiatives outshine most of the other company’s in terms of spending and commitment. Quite easily, MSFT is one of the best ESG stocks. Besides being one of the largest and strongest tech companies, the company’s achievements in ESG are simply marvelous. The corporate social responsibility (CSR) report that the company publishes every year highlights the achievements. The latest report of 2020 throws light on protecting fundamental rights, creating more inclusive economic opportunities, earning trust and commitment to a sustainable future.
The report states that during the period, the top vendors of Microsoft collectively reduced carbon dioxide emissions by 21million metric tons. The company provided broadband access to the global rural population covering 17.2 million people.
The company is consistently pursuing its goal to achieve the top spot among the most valued companies in market capitalization. The stocks have a strong ‘Buy’ rating with a high expectation of price appreciation.
Danaher (DHR)
Danaher I is a Washington DC-based company with operations in Life Sciences, Environmental & Applied Solutions, and Diagnostics. The traditional business fundamentals of Danaher are quite strong, and the company’s recent earnings underline the attraction of the stocks for ESG minded investors in 2022. The revenues increased by 23% in Q3 to reach $7.2 billion, and the net earnings of $1.2 billion show an increase of 33%. As the company is expanding its sales base, its operational efficiency is also increasing. Although the stock prices touch the target, there is still room for growth, and investors can expect price appreciation in days to come.
The company’s ESG initiatives revolve around inclusion and diversity. The company’s program of building it’s ARGs or associate resource groups creates mentors to coach underrepresented talent across seven diverse groups. Two of these groups, Black+ friends and Asian Descent + friends, have seen an increase in headcount by 350% and 165% during the last year. The Danaher stocks are ideal ESG investing stocks.
Nvidia (NVDA)
Nvidia, a global name in semi-conductors, ranks third amid the low-risk ESG companies that draw much attention. The rating results from a comprehensive survey conducted by Sustainalytics on 303 companies in the industry, and its ranking is undoubtedly quite impressive. The company stocks are excellent for those who focus on returns and retain their attractiveness. The broader expectations from the company on the ESG front bode well too. Going by the ESG rating, the stocks of Nvidia is standing on solid ground with prospects of growth which places it higher in the list of ESG stocks 2022.
You can surely choose any of the above stocks to stay profitable in the future too. But it is important to do your own research and analysis in this regard.
