With the global economy prioritizing sustainability efforts, investors should consider the best ESG stocks to buy. Environmental, Social and Governance (ESG) is becoming an increasingly important part of investment decision making processes.
However, it has caught a lot of slack in the past few years. This is due to the fact that it has become extremely politicized, despite the many benefits that it can bring to all stakeholders involved. Now with the SEC mandating standardized climate-related disclosures for public companies, ESG factors will continue to play a significant role in asset managers allocation strategies.
Let’s discover the three best ESG stocks to buy for March 2024!
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a household name in the technology world, and the largest company in the world by market capitalization. Despite the company’s strong global footprint, it is a frontrunner in advancing robust ESG initiatives.
Microsoft has a Sustainalytics risk rating of 15.2, placing it in the ‘’low risk’’ category. The company has set very ambitious sustainability goals, aiming to be carbon neutral by 2030 and carbon negative by 2050. It has made significant strides in reducing its carbon footprint by investing in renewable energy and implementing energy-efficient practices. Furthermore, the company plans to significantly reduce carbon emissions in the cloud with a 25% reduction in idle power consumption.
On the social side, Microsoft champions diversity and inclusion in its workforce. Its corporate leadership structure and risk management practices have allowed it to stay ahead of the competition. Additionally, Microsoft has a Climate Innovation Fund that has committed $1 billion to advance climate technology and innovation. With a deep focus on artificial intelligence, the company can continue to explore new ways to achieve its short- and long-term sustainability goals.
Intuit (INTU)
Intuit (NASDAQ:INTU) is a leading provider of financial software solutions like TurboTax and QuickBooks. Intuit has been outspoken about corporate social responsibility, demonstrating a commitment to its employees, customers, communities and shareholders.
Intuit has a Sustainlytics risk rating of 17.9, placing the company in the ‘’low risk’’ category. It prioritized corporate sustainability and set goals of reaching net zero emissions by 2040. The company’s Science Based Target initiative (SBTi) includes reducing absolute Scope 1 and Scope 2 GHG emissions by 42% by FY2030, from a FY2022 base year. Moreover, Intuit’s climate positive program has reduced nearly 500,000 metric tons of CO2e as of FY23.
Over the last decade, the company has grown its revenue substantially and EPS substantially. Furthermore, its new generative AI assistant will be a game changer, set to accelerate productivity for its customers. In Q2 FY24, management reiterated revenue growth in the 11-12% range, with GAAP operating income of approximately 3.67 billion. This represents growth of approximately 16%, making Intuit one of the best ESG stocks to buy for March 2024.
Adobe (ADBE)
Adobe (NASDAQ:ADBE) stock is a notable multinational computer software company setting a high bar for its ESG performance metrics. The commitment to environmental stewardship extends to its product development, with a focus on designing software that promotes efficient resource utilization.
Adobe has a Sustainalytics risk rating of 14.9, putting it in the ‘’low risk’’ category. The company has ambitious climate goals, with plans to have 100% of its operations powered by renewable energy by 2030. Right now more than 80% of its office spaces around the world are LEED or green building certified. It is also committed to diversity and inclusion initiatives, supporting non-profits and historically disadvantaged communities with the Equity and Advancement initiative.
Additionally, Adobe has acknowledged the company’s significance of its scope 3 emissions. The company has set clear goals and created various climate-related risk scenarios to address the increase in energy usage from its data center operations. Generative AI will also be a major tailwind for growth over the next decade, as Adobe Sensei copilot continues to gain traction. Adobe is well positioned for long-term growth, while aligning the values of environmentally and socially conscious investors.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
