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 -1.98%) 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
Intuit (INTU +2.22%) caters to consumers and small to mid-sized businesses. For consumers, Intuit offers subscription-based products like TurboTax and Credit Karma. Intuit serves businesses with its subscription-based accounting software QuickBooks. There are optional payroll and payment services integrated with QuickBooks.
Business highlights: Intuit holds leading share positions in its two legacy segments: tax preparation and business accounting software. The company acquired Mailchimp, a marketing platform geared to the small and mid-sized business customer, in late 2021. Mailchimp, along with Credit Karma, has contributed to Intuit's already strong operations.
Intuit's 2024 revenues came in at $16.3 billion, up 13%, with net income reaching $2.96 billion. That's led to a doubling of the stock over the last five years.
ESG highlights: Intuit has been carbon-neutral since 2015. The company has achieved gender pay equity worldwide and equal pay for minority groups in the U.S. Intuit is consistently recognized as one of the best large technology employers. It's also committed to net-zero greenhouse gas emissions by 2040.
Investors should know that the Federal Trade Commission issued an opinion in 2024, finding the company engaged in deceptive advertising practices.
3. Idexx Laboratories
NASDAQ: IDXX
Key Data Points
Idexx Laboratories (IDXX +0.29%) makes and distributes diagnostic equipment for pets and livestock, which is sold primarily to veterinarians and animal hospitals.
Business highlights: An increase in COVID-19 pandemic-driven pet adoptions has increased overall spending on pet healthcare, and Idexx has benefited. The company's leadership position and strong product development performance should drive momentum over the next several years as adopted pets age.
Idexx reached $3.9 billion in revenue in 2024, an increase of 6.5%. Earnings per share grew 6% year over year.
ESG highlights: Idexx launched a global whistleblower policy to support compliance with the company's code of ethics. Idexx has also reduced energy consumption per square foot by 15% and has decreased indoor water use since 2017. The company is preparing to take a third-party carbon footprint assessment and ESG materiality assessment.
It's focused on expanding access to care for more than 500,000 animals in underserved communities.
4. Lam Research
NASDAQ: LRCX
Key Data Points
Lam Research (LRCX -0.98%) makes and services equipment used to fabricate semiconductors. The company operates in the deposition, etch, and clean steps of chipmaking.
Business highlights: Lam profits from the growing demand for innovative chip design. The company's main competitive advantage is its installed base of 60,000 units. The network provides ongoing service revenue, plus valuable feedback from chipmakers that can guide future product development.
Lam's revenue for the fiscal year ending June 30, 2025, was $18.4 billion, up 24% from the year before, reflecting a cyclical recovery in semiconductor equipment. The company increased EPS by more than 43%.
ESG highlights: Lam is implementing sustainability measures throughout its organization to achieve 100% renewable energy by 2030 and net-zero emissions by 2050. The company has micro-inequities training and support for gender equality to promote inclusivity in the workplace.
5. Xylem
NYSE: XYL
Key Data Points
6. Adobe
NASDAQ: ADBE
Key Data Points
7. Microsoft
NASDAQ: MSFT
Key Data Points
8. Pool Corporation
9. Salesforce
10. Cadence Design Systems
Related investing topics
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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