20 Best ESG Stocks to Invest in Today (2025 Guide)

Looking to invest in ESG companies that actually are making a difference in everyday life? These are the best ESG stocks to invest in today.

ESG performance is a term that covers “Environmental, Social, and Governance” performance. It includes ESG policies and ESG practices as well as other factors such as environmental impacts or labor practices.

ESG ratings are determined by management, ESG risks, policies to govern ESG considerations, and ESG performance. These are used for investment research measuring the company’s rating on these factors compared to its industry peers or according to certain established benchmarks.

Investing in companies that improve the world is an option when you partake in socially responsible investing (SRI). ESG investment is becoming more popular to make an impact while earning strong returns. This type of investment also allows you to earn ESG accreditation through the Equator Principles and a rating, which identifies companies taking steps to reduce their ESG risks.

ESG ratings and research can give investors a leg up with their investment, as non-ESG securities usually don’t have as strong of a balance sheet or maintain consistent financial performance. Plus, who doesn’t like investing in companies that are actually helping the world rather than hurting it?

What is ESG?

ESG is an acronym that stands for Environmental, Social, and (Corporate) Governance. ESG investing is sometimes referred to as socially responsible investing (SRI), sustainable investing, responsible investing, or impact investing.

While very similar, there are some differences. SRI hails from the 1960s and 1970s, a time when “sinful” companies (e.g., tobacco and alcohol) were starting to be actively shunned, and companies associated with South Africa’s apartheid period created a separation from investors for moral and ethical reasons.

Since then, SRI has remained mostly “exclusionary,” meaning that companies that acted contrary to the investor’s values were culled from their investment portfolio and excluded from a list of potential investments.

ESG is similar in that certain industries are mostly excluded, but it takes a broader stance by looking at the companies. Realizing that no company is likely to check all of the boxes that exactly align with an investor’s values, ESG provides a framework by which companies are “graded” on how well they perform in the three areas:

environmental impact (positive and negative),
social performance (company culture, how well they treat employees, diversification, local community impact, as well as society at large), and
corporate governance (strength of board of directors, executive compensation, proxy access, transparency of communication)

Read more on the difference between SRI, ESG, and impact investing if you’d like to learn more.

Why Invest Using ESG?

ESG investors incorporate some fundamental analysis of companies and, as such, are likely to help identify companies with attractive long-term investment opportunities. According to a 2019 Morgan Stanley report, ESG funds’ rates of return were in line with traditional funds.

Moreover, those funds actually provided additional downside risk protection, as shown by their performance during the first quarter of 2020 (the beginning of the Coronavirus pandemic). Of 26 sustainable funds evaluated by Morningstar after the selloff, 24 outperformed similar traditional funds.

Ways to Invest in ESG

There are primarily two ways to invest using ESG: by doing the research yourself to pick stocks of companies matching your values or by “outsourcing” the choice to an advisor.

There isn’t a “right” or “wrong” option: it will come down to how much you want the companies to match your ESG values and how much time you have to research yourself.

You are reading this article most likely because you at least want a better idea of which companies might be a good fit for you.

So, we will provide some companies that might be good choices to start your search for ESG investments to add to your portfolio.

See Related: Best Climate Change Stocks

Best ESG Stocks to Invest in Today

Let’s get into some of our favorite top ESG companies and stocks to buy.

Home Depot (HD)

Home Depot is working on seven focus areas to become a sustainable and responsible enterprise. As the largest home improvement retailer in the US, Home Depot frequently deals with wood-based products.

HD stock is a Dow Jones Industrial Average stock that has a ton of eyes on them to avoid ESG concerns with procurement and the operations of their business.

However, they have strict sourcing policies in place to prevent the use of materials gained through conflict or the exploitation of developing countries’ natural resources.

They also plan to reduce their emissions by 40% by 2030 and 50% by 2035. HD stock is a top pick for maintaining its strong financial performance while maintaining its strong MSCI ratings in ESG and SRI principles.

Microsoft (MSFT)

Microsoft received the highest ESG rating of AAA from MSCI ESG Research for its unprecedented commitment to reducing carbon emissions. It is the first among its peers to target “carbon negative” status by 2030 and has committed a fund of $1 billion towards that effort.

MSFT stock is one of the best ESG stocks to consider in your portfolio. It is an industry leader in ESG principles, which has translated into outstanding financial returns for investors.

Beyond this, they’ve really stepped up their personal data, privacy, and data security efforts. The company’s impact (aka scoring high nonfinancial indicators) has been rock solid for multiple years, and its financial performance reflects that.

NVIDIA (NVDA)

NVIDIA is known for producing graphics cards and microprocessing chips, and as such, it uses many minerals in the production of its products. This makes it closely linked to social and environmental issues related to mining.

They have a very stringent policy on the use of conflict minerals, which helps them rank high on both the environmental and social components.

Additionally, they train nearly its entire workforce in anti-corruption and anti-bribery, boosting its ranking in governance as well. NVDA stock is a great pick as one of the top-performing tech stocks while maintaining favorable corporate behavior while continuously outperforming industry peers.

Salesforce (CRM)

Salesforce focuses on ESG initiatives, committing 1 million employee hours to the UN’s Sustainable Development Goals. It has also joined the UN Global Compact, a platform for companies wishing to align with responsible business practices.

Additionally, it has started the Salesforce Sustainability Cloud and 1t.org, with the former as a reporting and tracking tool for companies to track carbon emissions.

The latter is an initiative to connect, empower, and mobilize the global restoration of 100 million trees. They are among the industry leaders who make a difference while avoiding ESG issues.

West Pharmaceutical Services (WST)

West Pharmaceutical Services is a Pennsylvania-based medical supplies company and is a key supplier to the pharmaceutical, biotechnology, and generic drug companies.

They have an active commitment to ESG that focuses on key areas in environmental (sustainability and quality), social (health and safety, philanthropy), and governance (compliance and ethics, diversity and talent).

They are one of the most friendly and best ESG companies on the market today, and they deserve serious consideration from other ESG investors looking for growth and positive values.

See Related: Best Mutual Funds to Invest in Today

Texas Instruments (TXN)

Texas Instruments (TXN) is a Dallas, Texas-based electronic equipment company. TXN produces analog and digital chips for various industries, including communications and automotive.

Since 1972, ESG has been an important part of the company’s philosophy, and it remains to this day, making it one of the top ESG stocks for several years. Relevant environmental principles are still ingrained in TXN stock today.

To reduce energy consumption, their ESG initiatives focus on generating revenue through products that encourage sustainability and increase community access to information.

Other companies worth investigating

Adobe (ADBE)
Applied Materials (AMAT)
Best Buy (BBY)
BlackRock (BLK)
Cadence Design Systems (CDNS)
Hansen (CHR.DK)
Deckers Outdoor (DECK)
Emcor Group (EME)
Expeditors International (EXPD)
GlaxoSmithKline (GSK)
Idexx Laboratories (IDXX)
Intuit (INTU)
iRobot (IRBT)
Comfort Systems USA (FIX)
Lam Research (LRCX)
NextEra Energy (NEE)
Pool (POOL)
Prologis (PLD)
Teladoc Health (TDOC)
Vertex Pharmaceuticals (VRTX)

The list above is not exhaustive for ESG investors. Also, remember that some brokerages have screening tools that will let you search through their listed symbols for companies fitting various ESG categories.

You will have to contact your broker to see what options they have for you and how to use their tools to find ESG investments.

See Related: How to Invest in Vertical Farming

Outsource Your ESG Investing Through Robo-Advisors

Besides an in-person advisor, there are also ESG and impact investing robo-advisors. These are digital advisors designed to help build and manage a portfolio based on your risk tolerance and goals.

They are often much less expensive than in-person advisors. The ESG movement has not been unnoticed by the robo-advising industry, with many of them offering pre-built sustainable portfolios at no additional charge. Some robo-advisors you may wish to look at:

Betterment

Betterment is a robo-advisor that offers ESG investing with its personalized investment management solution. In ESG investing, Betterment develops and maintains ESG-based portfolios that are invested in companies with ESG ratings of A or higher.

The industry standard is the MSCI rating for ESG. They are a leading ESG research & ratings provider, providing ESG data and analysis to institutional investors globally.

ESG investing through Betterment is free; if you have already paid for ESGs, there is a fee of 0.15%. If you invest at least $100,000, the fee will be waived.

Axos Invest

Axos Invest is more than just ESG investing. The company is a full-service online brokerage firm offering stocks, ETFs, options, and many other investment products.

This company’s ESG rating system incorporates ClearShares, an investment service where investors can purchase shares of companies and receive diversification benefits. The company assigns manual ratings because different data providers use different scoring methods for measuring ESGs.

Ellevest

Ellevest is a digital investment platform for women that combines investing and career planning. Ellevest was founded by Sallie Krawcheck, who has spent her career in the financial industry.

To start using Ellevest, enter your investment goal, salary, and timeline. The platform will recommend portfolios from low-fee ETFs. You can also find a financial advisor if you need help developing an ESG investing strategy.

There are two ESG investments to choose from: ESG (explore), which invests with ESG funds first, or ESGBL (balance), which focuses on both ESG and traditional funds.

Invest Passively With ESG Mutual Funds or ETFs

Another option that might appeal to some investors is to add ESG mutual funds and/or ETFs to their portfolios. This has the benefit of immediate diversification and can fill out your portfolio with just a few selections.

The downside would be that you don’t get to choose exactly which companies are included, so there may be some companies included that wouldn’t have been had you been choosing individual stocks.

It is suggested that you look through the fund’s prospectus to determine what companies make up the fund and at what percentage of the fund.

Managed funds typically have higher expense ratios but may offer tighter screening and monitoring of companies with ESG ratings. That being said, both can offer attractive returns. Ten ESG equity funds that are top performers are:

Brown Advisory Sustainable Growth Fund (BAFWX)
Calvert US Large Cap Growth Responsible Index Fund (CALGRO)
Eventide Gilead fund (ETGLX)
Impact Shares YWCA Women’s Empowerment ETF (WOMN)
Nuveen ESG Large-Cap Growth ETF (NULG)
Nuveen ESG Mid-Cap Growth ETF (NUMG)
Putnam Sustainable Future Fund (PMVYX)
Reynders McVeigh Core Equity Fund (ESGEX)
Riverbridge Eco Leaders fund (ECOLX)
Shelton Green Alpha fund (NEXTX)

Each had at least a 38% return in 2020, with over half having returns topping 44% and one (Shelton Green Alpha fund) at a very impressive 113.9% one-year return that year.

Morningstar’s Highest-Rated ESG Funds

1919 Socially Responsive Balanced A (SSIAX)
AllianzGI Water Class P (AWTPX)
Boston Trust Asset Management (BTBFX)
Change Finance US LgCp FossilFuel Fr ETF (CHGX)
iShares MSCI USA ESG Select ETF (SUSA)
JHancock ESG Large Cap Core R6 (JHJRX)
Natixis Sustainable Future 2025 N (NSFEX)
Parnassus Core Equity Investor (PRBLX)
Pax Large Cap Fund Institutional (PXLIX)
Thornburg Better World International I (TBWIX)

Morningstar’s Lowest Cost ESG Funds*

Fidelity® Sustainability Bond Index (FNDSX)
Fidelity® U.S. Sustainability Index (FITLX)
IQ Candriam ESG US Equity ETF (IQSU)
iShares ESG 1-5 Year USD Corp Bd ETF (SUSB)
iShares ESG MSCI USA Leaders ETF (SUSL)
iShares ESG U.S. Aggregate Bond ETF (EAGG)
iShares® ESG Advanced MSCI USA ETF (USXF)
Vanguard FTSE Social Index I (VFTNX)
Xtrackers MSCI USA ESG Leaders Eq ETF (USSG)
Xtrackers S&P 500 ESG ETF (SNPE)

* – This list includes low-cost funds earning a 4 or 5 Morningstar Sustainability Rating, plus some low-cost sustainable bond funds. (Bond funds generally do not qualify for Sustainability Ratings.)

See Related: Best Impact Investing Books to Read

More About ESG Ratings

ESG standards are not yet widely agreed upon, and as such, some companies may tout ESG compliance, but a deeper look may reveal a less-than-stellar report card.

It is important to use third-party ratings to compare ESG ratings more effectively. However, even then, be mindful of how the data is collected, as many rely on self-reported data.

Financial firms like JPMorgan Chase, Wells Fargo, and Goldman Sachs publish annual reports that detail their ESG approaches and bottom-line results. Other companies, such as MSCI ESG Research, are actively trying to provide ESG Ratings consistent across the industry, as each industry deals with separate issues.

To learn more about MSCI ESG Ratings, how they are calculated, and how you might apply them, visit https://www.msci.com/our-solutions/esg-investing/esg-ratings.

While these lists of stocks and funds/ETFs rank high on the ESG spectrum now, these lists aren’t comprehensive nor necessarily reflective of stocks or funds/ETFs that best meet your values.

As such, these lists are a starting point for investigating ESG stocks and funds/ETFs that you might want to add to your portfolio.

See Related: Impact Investing Examples

Frequently Asked Questions (FAQs)

What does ESG stand for?

ESG stands for environmental, social, and governance considerations in sustainable investing. An ESG rating can help investors determine an investment’s chance for success.

What are good ESG stocks?

ESG stocks are rated as ESG by third-party ESG ratings. ESG stocks typically have lower risk, higher return rates, and better performance.

Is ESG a good investment?

Investing in environmental, social, and governance (ESG) stocks is always a good idea because it impacts all investments. ESG professionals are better positioned to find sustainable ESG stocks that will outperform other investments over the long run, have less risk of bankruptcy, and generate more sustainable quarterly profits for investors.

What does ESG investing mean?

ESG investing, or environmental social governance investing, refers to any investment that considers the environment and social/governance considerations in its analysis. ESGs can be found in both public investments (stocks) and private investments (real estate or loans with tangible collateral).

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