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In this article, we will take a look at 15 of the biggest ESG companies in the world. If you want to see more of the biggest ESG companies in the world, go directly to 5 Biggest ESG Companies in the World.
As the rapid growth of electric vehicles shows, consumers are increasingly interested in environmental sustainability. Although it might cost a little bit more, it is worth it to many consumers if it helps save the environment and fight against climate change.
Over the years, investors have also become more interested in sustainability rather than putting just profits first. For ESG investors, it's worth not making as much in profits if it helps make the world more sustainable.
Although ESG actually originated in the 1960's as socially responsible investing, ESG investing has grown substantially more in recent decades. One reason is that global warming has become a much bigger problem now than it was in the 1960's. Another reason is that ESG activists can make a much bigger difference given the internet in their calls for more income equality or better corporate governance. With the internet, a lot more people also realize that our world isn't sustainable in its current path unless we help improve it.
ESG
ESG stands for environmental, social, and governance. In ESG investing, investors assess how well a company does in terms of environmental issues such as reducing their carbon emissions, social issues such how companies help their communities, and governance issues such as management diversity.
In ESG investing, an investor might choose to invest in a company that does well in ESG issues but has a slightly higher valuation than a company with similar qualities but doesn't do as well in ESG.
Given changing consumer behavior, ESG investing can also add value too. McKinsey explains,
Although there can be wide discrepancies in practice, including customers who refuse to pay even 1 percent more, we’ve found that upward of 70 percent of consumers surveyed on purchases in multiple industries, including the automotive, building, electronics, and packaging categories, said they would pay an additional 5 percent for a green product if it met the same performance standards as a nongreen alternative. In another study, nearly half (44 percent) of the companies we surveyed identified business and growth opportunities as the impetus for starting their sustainability programs. The payoffs are real. When Unilever developed Sunlight, a brand of dishwashing liquid that used much less water than its other brands, sales of Sunlight and Unilever’s other water-saving products proceeded to outpace category growth by more than 20 percent in a number of water-scarce markets. And Finland’s Neste, founded as a traditional petroleum-refining company more than 70 years ago, now generates more than two-thirds of its profits from renewable fuels and sustainability-related products.
2022
Although many ESG companies have growth potential, 2022 has been a tough year for the market. To fight inflation, the Federal Reserve has raised interest rates six times this year alone and many analysts think the central bank could continue to raise it further.
While October's inflation was lower than expected and the market has rallied recently, there is still uncertainty and potential downside if economic data fails to meet expectations.
As a result, it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
Methodology
For our list of 15 Biggest ESG Companies in the World, we took the 15 largest stocks from Vanguard ESG U.S. Stock ETF (ESGV) in terms of % of the fund and we reranked them based on their market capitalization as of November 12. We excluded Alphabet Inc Class A (GOOGL) shares since we already included Alphabet once in the list.
We included the number of hedge fund holders in our database that held shares in the same stock at the end of Q2 2022.
15 Biggest ESG Companies in the World
15. Pfizer Inc. (NYSE:PFE)
Market Capitalization as of November 12: $267.19 billion
Number of Hedge Fund Holders: 70
Pfizer Inc. (NYSE:PFE) is a company that delivers positive impacts to patients and society through its science breakthroughs in medicines. Pfizer Inc. (NYSE:PFE) explains for its 2021 year, "Never before has our impact been so wide-reaching when it comes to the number of patients treated or vaccinated with a Pfizer product. We reached an estimated 1.4 billion patients with our medicines and vaccines – roughly one out of every six people on Earth. Even when we separate out our breakthrough COVID-19 products, we treated an estimated 424 million patients globally." As of November 12, Pfizer Inc. (NYSE:PFE) has a market capitalization of $267.19 billion.
14. Bank of America Corporation (NYSE:BAC)
Market Capitalization as of November 12: $308.14 billion
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) is a leader in ESG as its employees have volunteered millions of hours to help the community. Bank of America Corporation (NYSE:BAC) also has a 2030 target to be carbon neutral and to reduce its waste significantly by that year. As of 11/12, Bank of America Corporation (NYSE:BAC) had a market capitalization of $308.14 billion.
13. The Home Depot, Inc. (NYSE:HD)
Market Capitalization as of November 12: $322.41 billion
Number of Hedge Fund Holders: 80
The Home Depot, Inc. (NYSE:HD) has made its business more sustainable as it has cut U.S. store electricity usage by around half since 2010. The Home Depot, Inc. (NYSE:HD) is also making progress towards its goal of producing or procuring 100% renewable electricity equivalent by 2030. As of November 12, The Home Depot, Inc. (NYSE:HD) has a market capitalization of $322.41 billion.
12. Mastercard Incorporated (NYSE:MA)
Market Capitalization as of November 12: $326.21 billion
Number of Hedge Fund Holders: 137
Mastercard Incorporated (NYSE:MA) has a goal of reducing its carbon footprint and achieving net zero emissions by 2040. Futhermore, Mastercard Incorporated (NYSE:MA) is creating innovative solutions that unite its customers, partners, and consumers in climate action. Mastercard Incorporated (NYSE:MA) has a market capitalization of $326.21 billion as of November 12.
11. The Procter & Gamble Company (NYSE:PG)
Market Capitalization as of November 12: $334.06 billion
Number of Hedge Fund Holders: 71
The Procter & Gamble Company (NYSE:PG) has an ambitious 2030 goal where 100% of its packaging will be recyclable or reusable by the end of the decade. The Procter & Gamble Company (NYSE:PG) also hopes to use 100% renewable electricity by that year and to cut GHG emissions in half at P&G sites. As one of the leading consumer staples companies, The Procter & Gamble Company (NYSE:PG) making its products more sustainable and producing less waste would be good for the world. As of November 12, The Procter & Gamble Company (NYSE:PG) ranks #11 on our list of 15 Biggest ESG Companies in the World with a market capitalization of $334.06 billion.
10. Eli Lilly and Company (NYSE:LLY)
Market Capitalization as of November 12: $334.75 billion
Number of Hedge Fund Holders: 70
Eli Lilly and Company (NYSE:LLY) is an ESG leader given the company increases access to medicines which help improve lives and communities. Eli Lilly and Company (NYSE:LLY) is minimizing its environmental impact and empowering a diverse workforce as well. As of 11/12, Eli Lilly and Company (NYSE:LLY) has a market capitalization of $334.75 billion.
9. JPMorgan Chase & Co. (NYSE:JPM)
Market Capitalization as of November 12: $396.86 billion
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) has a goal to "finance and facilitate more than $2.5 trillion over 10 years to help address climate change and contribute to sustainable development." If JPMorgan Chase & Co. (NYSE:JPM)'s sustainability efforts go well, the world could be a better place with less carbon emissions and more social equality. JPMorgan Chase & Co. (NYSE:JPM) has a market capitalization of $396.86 billion.
8. NVIDIA Corporation (NASDAQ:NVDA)
Market Capitalization as of November 12: $406.54 billion
Number of Hedge Fund Holders: 84
NVIDIA Corporation (NASDAQ:NVDA) is an ESG leader as it plans to purchase or generate enough renewable energy to match 100% of its global electricity usage. Furthermore, "NVIDIA GPUs are typically 20x more energy efficient for certain AI and HPC workloads than CPUs." As of 11/12, NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of over $406 billion. Out of the 895 hedge funds in our database, 84 also owned shares in NVIDIA Corporation (NASDAQ:NVDA) at the end of Q2 2022.
7. Visa Inc. (NYSE:V)
Market Capitalization as of November 12: $424.11 billion
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) is committed to achieving net zero emissions by 2040, a time frame that's at least a decade ahead of the Paris Climate Agreement. The company has already achieved carbon neutrality across its operations beginning with 2020 with its transition to 100% renewable energy. Furthermore, Visa Inc. (NYSE:V) is focusing on energy efficient for its data centers. As of 11/12, Visa Inc. (NYSE:V) ranks #7 on our list of 15 Biggest ESG Companies in the World with a market capitalization of $424.11 billion. 166 hedge funds in our database were long Visa Inc. (NYSE:V) at the end of Q2 2022, making it one of the most widely held stocks among elite institutions.
6. UnitedHealth Group Inc. (NYSE:UNH)
Market Capitalization as of November 12: $487.80 billion
Number of Hedge Fund Holders: 91
UnitedHealth Group Inc. (NYSE:UNH) has a goal to achieve operation net zero emissions by 2035 and the company has also committed $100 million to create a new health workforce diversity program and train 10,000 clinical professionals by 2033. Furthermore, UnitedHealth Group Inc. (NYSE:UNH) aims to help the community by helping build a modern high performing health system. As of November 12, UnitedHealth Group Inc. (NYSE:UNH) has a market capitalization of $487.80 billion.
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Disclosure: None. 15 Biggest ESG Companies in the World is originally published on Insider Monkey.
