The best ESG stocks are financially strong, investable companies that are committed to making the world a better place -- while generating healthy returns for shareholders.
ESG stands for environment, social, and governance, and ESG stocks are publicly traded companies that have made those goals a priority in managing their business.
The COVID-19 pandemic highlighted the critical role corporations must play in addressing the world's most pressing issues. Governments alone cannot cure disease -- or halt climate change, provide safe working conditions, or close gender and racial pay gaps. These issues threaten quality of life globally and can't be solved without corporate resources and expertise.
What makes for a good environment, social, and governance stock? The company must align its operations to support programs benefiting the environment, employees, local communities, and shareholders. Its performance history must be verifiable by ESG rating agencies such as MSCI and Sustainalytics.
Solid financial performance is a primary theme of ESG investing. As an ESG investor, you don't have to forgo solid returns to promote good corporate citizenship.
Institutional investors use ESG ratings to demand high standards for corporate behavior, and you can do the same. By investing in the best ESG companies, you support sustainable initiatives such as energy conservation, waste reduction, safer working conditions, ethical business practices, and more.
Ten best ESG stocks right now
The 10 stocks in the table below deliver in two ways:
- All have top MSCI ESG ratings.
- All have outperformed the S&P 500 on a total return basis over the last decade.
Based on historical performance and strong business models, these stocks should continue to perform well for long-term investing as part of an ESG strategy.
Rank | Name and Ticker | Industry | MSCI ESG Rating | Market Cap (billions) |
|---|---|---|---|---|
1 | Nvidia (NASDAQ:NVDA) | Semiconductors | AAA | $4,630 |
2 | Intuit (NASDAQ:INTU) | Software application | AAA | $184.7 |
3 | Idexx Laboratories (NASDAQ:IDXX) | Diagnostics and research | AAA | $56 |
4 | Lam Research (NASDAQ:LRCX) | Semiconductor equipment and materials | AAA | $192.6 |
5 | Xylem (NYSE:XYL | Water infrastructure | AAA | $35.9 |
6 | Adobe (NASDAQ:ADBE) | Software and infrastructure | AAA | $150.5 |
7 | Microsoft (NASDAQ:MSFT) | Software and infrastructure | AAA | $3,867 |
8 | Pool (NASDAQ:POOL) | Leisure | AA | $9.16 |
9 | Salesforce (NYSE:CRM) | Software application | AA | $232 |
10 | Cadence Design Systems (NASDAQ:CDNS) | Software application | AA | $86 |
MSCI evaluates companies by their exposure to, and management of, material ESG risks in their industry. The scale ranges from AAA to CCC, and the leading ESG companies in each industry receive an AAA or AA ranking.
1. Nvidia
NASDAQ: NVDA
Key Data Points
Nvidia (NVDA -0.56%) makes graphics processing units (GPUs) used in gaming consoles, supercomputers, data centers, robots, and self-driving cars.
Business highlights: Nvidia is the major GPU supplier for AI data centers, and its dominant market share has made it one of the most valuable companies in the world. It should continue to grow along with demand for artificial intelligence (AI).
Nvidia's 10-year total annualized return to shareholders exceeds 50%. Revenue for the 2024 fiscal year grew 126% to $60.9 billion, and earnings per share (EPS) grew 765% to $0.49 (split-adjusted).
ESG highlights: Nvidia's ESG initiatives include treating people fairly, strengthening diversity and inclusion, and pursuing social change with its products. Key actions taken under these goals include:
- Powering the most efficient supercomputer on the Green500 list
- Named No. 2 in Glassdoor's list of Best Places to Work
2. Intuit
NASDAQ: INTU
Key Data Points
3. Idexx Laboratories
NASDAQ: IDXX
Key Data Points
4. Lam Research
NASDAQ: LRCX
Key Data Points
5. Xylem
NYSE: XYL
Key Data Points
6. Adobe
NASDAQ: ADBE
Key Data Points
Adobe (ADBE +5.28%) provides software, publishing, and cloud storage for creatives, along with marketing analytics tools for business teams.
Business highlights: Adobe is a dominant leader in digital content creation, thanks to its flagship Photoshop software. Subscriptions to Adobe software provide a predictable, multibillion-dollar revenue stream. The company's newer marketing and analytics suite should drive deeper customer engagement and future growth.
Adobe reported record revenue of almost $21.5 billion in fiscal 2024, an increase of 11% over the previous year. The company has returned more than 500% to shareholders over the past 10 years.
ESG highlights: Adobe has achieved global gender pay parity. The company has also invested almost $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.
MSCI upgraded Adobe's ESG score from AA to AAA in December 2021.
7. Microsoft
NASDAQ: MSFT
Key Data Points
Microsoft (MSFT +0.48%) is the world's largest software company and a dominant cloud platform provider.
Business highlights: Microsoft has strong, growing subscription revenue from its software products. The company is also the No. 2 leader in cloud computing with its Azure platform. Azure's success and Microsoft's active acquisition pipeline should support strong future growth, and it has benefited from the AI boom as well.
Over the past 15 years, Microsoft shareholders have enjoyed total annualized returns of 20%. In the fiscal year ending June 30, 2025, Microsoft increased revenues 15% to $281.7 billion and diluted EPS by 16% to $13.64.
ESG highlights: Microsoft earns its status as a prominent ESG company for its leadership in energy conservation. Supported by its partnership with Black-owned solar company Volt Energy, Microsoft is working toward 100% renewable energy by 2025, although its expansion of AI and cloud computing capabilities may make that goal an uphill battle.
By 2050, the company plans to offset all the carbon emissions it's produced since 1975.
8. Pool Corporation
NASDAQ: POOL
Key Data Points
9. Salesforce
NYSE: CRM
Key Data Points
Salesforce (CRM +5.33%) provides customer relationship management (CRM) software -- applications that help businesses use their customer data to sell more products and services.
Business highlights: Salesforce caters to large corporate customers, which contributes to stable performance. They have a leading market share and predictable, subscription-based revenues. Salesforce has also grown through acquiring complementary businesses like Slack, Tableau, and MuleSoft.
Salesforce has a long history of producing double-digit annual returns for shareholders. Its fiscal year 2025 revenues of $37.9 billion marked a 9% increase over the prior year.
ESG highlights: Salesforce has achieved net-zero carbon emissions across its value chain and 100% renewable energy for its operations. The company has also established a racial equality and justice task force and spent $16 million on equal pay initiatives.
10. Cadence Design Systems
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Key factors to consider when choosing ESG stocks
Investing in ESG stocks is a bit different from other sectors. Investors typically choose stocks for financial reasons. If that explains why you're considering ESG stocks, then it makes sense to look into factors like revenue growth, profitability, and dividend yield, depending on your priorities as an investor.
However, if your priority is ESG, that puts you in a unique position among investors.
You'll want to decide which is the important component of ESG for you. If it's renewable energy, you'll want to prioritize companies that are energy-neutral or focused on renewables.
If the social mission, you may want to invest in companies with diversified boards and that are making efforts to support their local communities.
Governance may be harder to assess, but it's worth considering whether a company has stayed out of its regulatory trouble, how much voting power insiders have, and if its board of directors is independent from management.
Based on other ESG issues that are important to you, you may want to consider other factors, such as whether the company is a good employer.
How to invest in ESG stocks
If you're interested in investing in ESG stocks, it's not hard to do. Just follow these steps:
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Investing for good
You can buy these ESG stocks individually, but you can also find ESG exchange-traded funds (ETFs) that hold a broader set of top ESG performers. ESG funds can vary widely in their stock selection process and interpretation of ESG factors, so review the fund documentation carefully to find a good fit for your ESG criteria.
If you're motivated to support specific causes such as climate change or conscious capitalism, you might also expand your fund and stock research into the sustainable investing, impact investing, and socially responsible investing categories. These are related to ESG but are often more oriented toward specific causes. ESG screening is one more tool investors can use to do good while mitigating risk to long-term wealth.
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