7 stock picks for ESG-conscious investors

Despite slowing growth rates and skepticism among many U.S. investors, ESG assets worldwide have already surpassed $30 trillion and are on track to reach $40 trillion by 2030, Bloomberg Intelligence ESG data show.

“ESG has had a tough few years, but we see the market entering a necessary consolidation phase, marked by slower growth and maturity,” said Adeline Diab, global ESG research and strategy director at Bloomberg Intelligence.

Younger investors, especially, like environment, social and governance funds because they focus on long-term benefits for the planet. These investors often pick investments based on how sustainable they think they are, she said.

Companies that receive strong ESG performance ratings usually emphasize investments in renewable energy or policies that make the company’s environmental impact much smaller. For long-term financial gains, these investments look at ethical and environmentally friendly ways to do business.

Here are 7 stocks to consider if ESG is among your investing values:

1. Adobe

Adobe ADBE has a diverse leadership team and equal pay for men and women around the world. By 2035, the company wants to run its business on 100% renewable energy. Because of these things, Adobe has a top AAA ESG rating. This is because of its good governance and special social programs.

Adobe reported bigger profits in the first quarter of 2024, up 11% to $5.18 billion. Even though it had to pay a $1 billion termination fee to get out of its failed purchase of Figma, this growth was still driven by its strong digital media business and ability to make money. 

2. Intuit

Intuit INTU wants to be more environmentally friendly, so by 2030 it wants to use only renewable energy and reduce its carbon footprint. The company’s AAA MSCI ESG ratings show that it is a leader in human capital, moral governance, and reducing the effects of climate change. Comprehensive HR policies help employees’ mental health, well-being, and work-life balance by being open and supportive.

On the financials side, Intuit’s net sales and profits rose to $3.386 billion and $353 million, respectively, in the second quarter of its fiscal year 2024. This was due to strategic innovations and better market positioning. Sales are expected to rise 11%–12% to $15.890 billion to $16.105 billion for the fiscal year.

3. Nike

Nike NKE is moving to more eco-friendly materials like recycled polyester and nylon, sustainable cotton and new lower-impact products such as Nike Flyknit and Nike Flyleather as part of its push to reduce greenhouse gas (GHG) emissions. The company plans to recycle 80% of its manufacturing waste into new Nike products and other uses to extend product life and reduce its environmental impact. The leftover scrap won’t be dumped.

After pivoting on its direct-to-consumer strategy at the end of 2023, Nike’s wholesale sales fell 3% in the second quarter of fiscal 2024, although revenue rose to $13.4 billion. Improved third-quarter results showed the economy’s resilience and the effectiveness of targeted cost reductions and operational efficiency, which will save $2 billion over three years.

4. HPE

HPE HPE aims to reduce carbon pollution and promote resource-efficient technology. To improve social and environmental benefits, HPE has incorporated education and freedom into its core values. HPE demonstrated its co-engineered AI-native solutions, business AI, deep learning, and machine learning operationalization at the NVIDIA GTC. These major advances demonstrate how HPE uses cutting-edge technology to boost output and achieve its ethical and environmental goals. 

This year, HPE predicted first-quarter sales of $7.11 billion, down from $7.4 billion last year. The company said EPS would drop from $0.63 to $0.45. Even in a bad economy, HPE’s $14 billion purchase of Juniper Networks boosts its networking and AI capabilities. HPE believes Juniper’s AI-native Mist AI and Cloud platform will triple its networking revenue.

5. Salesforce

Salesforce CRM has enhanced its ESG practices to demonstrate sustainability and social justice. Replanting and universal renewable energy use have cut company carbon emissions. Salesforce also promotes workplace equality, minority training, and AI governance reform for fairness and transparency. Salesforce offers sustainability cloud solutions to help companies assess and reduce their carbon footprints to net-zero by 2040.

Salesforce exceeded revenue and profit expectations in the current fiscal quarter due to cloud-based remote work solutions and global workplace transitions. CEO Marc Benioff streamlined corporate leadership and strategic decision-making after Bret Taylor’s departure, boosting efficiency.

6. Microsoft

Microsoft MSFT plans to achieve net-zero emissions by 2050 and carbon negativity by 2030 through resource management and recycling. The ESG strategy of Microsoft includes these environmental activities as part of their social responsibility to connect neglected areas. Read more: Microsoft’s AI sustainability platform helps businesses make climate decisions.

Recent financial reports show strong sales and profitability for Microsoft’s cloud services and Office products for remote work. Microsoft optimized Windows 11’s speed and interface to boost productivity. Microsoft also said it would buy Activision Blizzard for $70 billion to improve its gaming and metaverse businesses.

7. Nvidia

Nvdia NVDA wants to use only green energy and its GPUs are energy-efficient. The GeForce RTX 40 series has revolutionized professional graphics and gaming, making Nvidia the AI and gameplay leader. Altogether, Nvidia’s energy-efficient products and AI solutions for health care and climate issues demonstrate its environmental commitment.

NVIDIA’s finances are good due to AI and game sales, leading to a $1 trillion market cap in 2023, fueled by the generative AI boom. This rise shows how much IT and entertainment need new computer technologies. NVIDIA’s stock price has risen because investors trust its market plan and leadership.

Read more: The Sustainable Finance Podcast: AI and cost-effective sustainability