ESG companies carry strong environmental, social, and governance values while simultaneously gaining strong stock performance. Companies have turned towards incorporating these goals more after the signing of the Paris Climate Agreement in 2015 and as the world become more aware of the looming climate change crisis. ESG policies and practices help in measuring how much of a sustainable impact a company carries.
Microsoft Corporation (NASDAQ: MSFT)
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Microsoft Corporation (MSFT) is not only one of the largest technology and software giants in the world but it is also applauded for its ESG efforts and appears on top positions in ESG related lists time and time again. For many years, MSFT has been releasing a sustainability report as per the standards of the GRI Sustainability Reporting Standards and also the UN’s agreed disclosures for treatment of human rights as stated under the UN Global Compact. It has also been going carbon neutral since 2012 and its data centers are powered by energy efficient solar panels. Microsoft even received an “Outperformer” rating in 2019 from Sustainalytics.
Date providers such as MSCI rank Microsoft’s ESG initiatives highly and Microsoft has been a member of multiple ESG focused equity indexes such as the FTSE4Good Index and the MSCI ESG Indexes. And for its ESG efforts, Microsoft has also been ranked on top by Just Capital in 2018. Microsoft also believes in giving public disclosure of its ESG initiatives which makes for a cleaner environment to gauge its efforts it. It is also the first company amongst its competitors which has taken the initiative to achieve ‘carbon negative’ status by 2023. Last year in September, Microsoft also received the highest ESG ratings of AAA from MSCI ESG Research.
Beyond Meat Inc (NASDAQ: BYND)
Beyond Meat (BYND) has made efforts through which it has pioneered the way for meat based without actual animal. With the global demand for meat increasing due to multiple factors, it has caused a large meat supply rush which has caused the number of cows to increase rapidly to meet the demand. On average, one cow releases between 70-120 kgs of methane per year and factored with there being more than 1.5 billion cows and bulls on the globe, it adds up to a large contributing factor towards climate change.
BYND has created a plant-based meat as a solution to this entire problem which tastes exactly as good as animal-based meat without the use of the animal at all. And the demand for these plant-based meat products is steadily increasing with the people turning towards a more sustainable life style and wanting to preserve the environment. Its net revenues were $94.4 million in the third quarter which is an increase of 2.7 per cent, year over year and its gross profit was $25.5 million.
salesforce.com, inc. (NYSE: CRM)
Salesforce (CRM) is a name that often comes up when it comes to leading companies in ESG initiatives. Salesforce has committed 1 million employee hours towards UN’s Sustainable Development Goals. Furthermore, it has also joined the UN Global Compact and has also launched Salesforce Sustainability Cloud which will track important information regarding the environment and report it to businesses. The company also launched 1t.org which will make efforts in the global restoration of 100 million trees by empowering and connecting businesses. All of these efforts will ultimately help in reducing the overall carbon emissions.
Currently, CRM has the highest ESG rating of AAA from MSCI ESG Research and has an IBD Composite Rating of 99. These high rankings are because of Salesforce’s efforts in tackling problems related to human capital improvements and privacy. Salesforce now has a market cap of $242 billion and its sales were boosted by 29 per cent this year.
