Proven ESG Companies
What parameters and companies you should know about?
ESG companies are the latest top-notch opportunities for investors who are looking for reliable and profitable chances to invest their money. As someone who has been working with this type of investment for decades now, I decided to write this to make things more understandable.
ESG (Environmental, Social, Governance) companies are pretty-much the sustainable forms of investments that help investors to get long-term performance advantages, while making a positive impact on the environment, society and governance.
Are Ethical Investments Outperforming Traditional Funds?
While the investment is, in its core structure, a simple form of making money, the ESG investment is something that is not concerning the financial gain but also meeting the environmental, social and governing principles. Therefore, the new form that takes care of the surroundings and the place we live in is somehow more attractive to the investors. One of the main reasons is that investors can be sure that their investments are going to comply with the sustainable concept, which means they don’t risk losing money in the future. As everything is leaning towards using more efficient technology that does not produce a lot of waste and pollution, we could say that the ESG companies are slowly taking over.
Another reason that makes this concept of investment more attractive is the social part, where the investors can be sure that the company they will invest in is going to donate some money to the social community. This can be anything — from solving a basic problem of water usage to the building pavements in the sub-urban areas. The point is improving some social problems that are present for years in a certain community. It helps the company to save its reputation, which means that the investors will know they had done a good thing for a company.
In terms of governance, the company that uses the ESG concept is not going to be under the influence of political campaigns and reigns. It eliminates the possibility of starting a conflict of interest among the board members but also ensures the transparent rights to vote on important issues and decisions. When summing everything up, I can say that the ESG concept makes everything transparent, sustainable and socially correct, which is exactly why more and more investors start a hunt for ESG companies.
What are the Advantages of ESG Company Investments?
The first and most obvious advantage is taking more care of the environment and the area we live in. By accepting the ESG model, a company must ensure that it does decrease its greenhouse gas emissions, uses renewable energy sources, reduces the exposure to toxic chemicals as well as uses the production processes that do not create pollution with the releasing of the toxic water.
The social factors that are improved relate to the improvement of social acceptance, gender equity, the local municipalities and many other things that are important to society. In addition, the governance factors relate to the governing, transparency, anti-political campaigns as well as the overall improvement in the healthcare, retail or manufacturing industry.
All investors who decide to go with the ESG company’s investments can count on the modern policies to be adopted — ranging from the safe long-term investments that are easier to predict to getting recognition for the work they did.
What is evident so far is that all companies that follow the ESG principles are going to perform well in the future as every single industry has to do something about the environment, social and governing issues.
What Parameters are Crucial for Selecting the Right ESG Company?
1st parameter: you need to consider when choosing an ESG company for investment is transparency. If you find a good company that seems like a fantastic investment opportunity, make sure that you consider their ability to present all data transparently, without any hidings. No one wants a black box as no one wants to hand over money and forget about the investment.
If it is a big company that has a lot of data that needs to be analyzed, I recommend you using the machine learning experts for making detailed predictions and calculations.
2nd parameter: you need to consider is the timeliness of the company. When you review a potential investment opportunity, you don’t want to work with the obsolete data that changed many times since the last data gathering. Not only this can be a bad investment decision, but also the bad image of the company that does not prepare the data accurately and on time.
You want to work with up-to-date data and information that depict the real state and performance of the company so you could analyze and predict the potential path of the company.
3d parameter: relates to the ESG ratings itself as these are one of the main indicators of the good/bad company for investment. The ESG ratings, made after the extensive data gathering and analyses, depict the tendency of the company for becoming ESG-friendly. Companies like Bloomberg or MSCI collect, gather and analyze the results of all companies that are available for investing and therefore create the business reports that are highly valuable to the investors. Once an investor notices a high ESG rating from the reports, he can conclude that the company is a sustainable asset worth investing and working with.
Companies That Follow the Previous Parameters and Stand for the Good Investments
For the sake of the article, I will list the three best ESG companies that have a lot of potentials, however, you can see the more detailed report to learn more about other companies as well.
- Nvidia is one of the best ESG companies, which specializes in electronics and manufacturing of semiconductors and GPUs. It has a 99 EPS rating and 33% ROE, which are definite signs of a sustainable asset that is great for making investments. Whether you are a beginner or experienced investor, I highly recommend investing in Nvidia as this company showed fantastic results in environmental care, social improvement and governing advancements.
- Adobe is a well-known computer software company that has a 97 ESG rating but also a relative strength rating of 89! The company has been implementing cloud-based solutions that offer people faster and more efficient solutions for planning and manufacturing without using physical paper. Such a concept also led to the introduction of energy-efficient processes with less pollution but also more efficient communication that eliminates the production of physical waste. Adobe has been and will be one of the companies that will rely on sustainability and environmental-friendly manufacturing processes as they follow the strict ESG procedures, so don’t hesitate to invest money!
- Salesforce is another software cloud-based company that provides CRM software solutions, enterprise apps and general app development, with an ESG rating of 99! The company uses strictly non-physical assets in the app development and CRM analyses with the climate change impacts on the mind, which pushes them forward in making innovative solutions. Besides, their solutions offer environmentally-conscious assets and features that help clients in solving their problems. It is a good company, especially if you are new to the ESG investment realm!
Conclusion
Being in the ESG investment for years, I realized that nothing is more important than our planet Earth and the environment we live in. I am a bit of an old-fashion guy — but I am still for developing new and innovative features and technologies that help us to solve our problems.
I also do think that the more important is to stay healthy and conscious about our environment than making the new technologies at all costs. The concept of sustainability is a key thing for preserving our nature and for this reason I think that you should invest in ESG companies.
Have in mind the parameters I gave you once you decide to invest in such companies. After all, the environment allows us to live, enjoy and make money, so our job is to keep it in the right condition -at least by investing in the ESG companies!
