The best ESG stocks are financially strong companies that aim to do well for shareholders while doing good for the world. ESG -- short for environmental, social, and governance -- refers to businesses that prioritize issues like sustainability, worker treatment, and ethical leadership.
These priorities matter because many global challenges, from climate change to workplace equity, can’t be solved by governments alone. Companies play a major role.
Strong ESG companies back up their commitments with measurable actions and solid financial performance. ESG ratings from firms like MSCI and Sustainalytics help investors evaluate them.
The goal isn’t to sacrifice returns for values. Many ESG investors seek both, supporting responsible business practices while earning competitive long-term returns.
Top ESG stocks to consider
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 | $4,521 |
2 | Intuit (NASDAQ:INTU) | Software application | AAA | $122.6 |
3 | Idexx Laboratories (NASDAQ:IDXX) | Diagnostics and research | AAA | $48 |
4 | Lam Research (NASDAQ:LRCX) | Semiconductor equipment and materials | AAA | $274.9 |
5 | Xylem (NYSE:XYL | Water infrastructure | AAA | $29.8 |
6 | Adobe (NASDAQ:ADBE) | Software and infrastructure | AAA | $112.4 |
7 | Microsoft (NASDAQ:MSFT) | Software and infrastructure | AAA | $3,009 |
8 | Pool (NASDAQ:POOL) | Leisure | AA | $9.16 |
9 | Salesforce (NYSE:CRM) | Software application | AA | $181.9 |
10 | Cadence Design Systems (NASDAQ:CDNS) | Software application | AA | $81.2 |
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 -0.99%) 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 2026 fiscal year, which ended in Jan. 2026, grew 65% to $215.9 billion, and earnings per share (EPS) grew 67% to $4.90.
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 +2.66%) 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 +0.86%) 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 $4.3 billion in revenue in 2025, an increase of 10.2%. Earnings per share grew 23% year over year to $13.08.
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 also 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 +1.66%) 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
Xylem (XYL -0.04%) has established itself as a leader in the water infrastructure industry due to a history of acquisitions and an end-to-end portfolio of products to meet its customers' needs.
Business highlights: In a slow-growth industry, Xylem has delivered steady growth with organic revenue up 3.6% on a compound annual growth rate basis and 6.2% in total revenue growth rate, which includes acquisitions.
The company is also highly profitable with a 20% adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, and a track record of outperforming the S&P 500.
ESG highlights: Water is an invaluable resource, and Xylem says that sustainability is at the core of its business strategy. It was rated one of America's most responsible companies by Newsweek and is committed to the UN's 17 sustainable development goals, including eliminating poverty, zero hunger, and good health and well-being.
6. Adobe
NASDAQ: ADBE
Key Data Points
Adobe (ADBE +0.50%) provides software, publishing, and cloud storage for creatives, along with marketing analytics tools for business teams.
Business highlights: Adobe leads the market for digital content creation, thanks to its flagship Photoshop software. Subscriptions to Adobe software provide a predictable, multibillion-dollar revenue stream. The company's newer marketing and analytics suite should drive deeper customer engagement and future growth.
Adobe reported record revenue of $23.8 billion in fiscal 2025, an increase of 10.5% over the previous year.
ESG highlights: Adobe has achieved global gender pay parity. The company has also invested almost $87 million in communities to benefit 1.6 million underrepresented minorities. Half of Adobe's energy comes from renewable sources, and the company has set a goal of obtaining all power from renewable sources by 2035.
MSCI upgraded Adobe's ESG score from AA to AAA in December 2021.
7. Microsoft
NASDAQ: MSFT
Key Data Points
Microsoft (MSFT -0.27%) is the world's largest software company and a dominant cloud platform provider.
Business highlights: Microsoft has a strong, growing subscription revenue from its software products. The company is also the No. 2 leader in cloud computing with its Azure platform. Azure's success and Microsoft's active acquisition pipeline should support strong future growth, and it has benefited from the AI boom as well.
Over the past 15 years, Microsoft shareholders have enjoyed total annualized returns of 20%. In the fiscal year ending June 30, 2025, Microsoft increased revenues 15% to $281.7 billion and diluted EPS by 16% to $13.64.
ESG highlights: Microsoft earns its status as a prominent ESG company for its leadership in energy conservation. Supported by its partnership with Black-owned solar company Volt Energy, Microsoft is working toward 100% renewable energy by 2025, although its expansion of AI and cloud computing capabilities may make that goal an uphill battle.
By 2050, the company plans to offset all the carbon emissions it's produced since 1975.
8. Pool Corporation
NASDAQ: POOL
Key Data Points
9. Salesforce
NYSE: CRM
Key Data Points
Salesforce (CRM +0.86%) provides customer relationship management (CRM) software -- applications that help businesses use their customer data to sell more products and services.
Business highlights: Salesforce caters to large corporate customers, which contributes to stable performance. They have a leading market share and predictable, subscription-based revenues. Salesforce has also grown through acquiring complementary businesses like Slack, Tableau, and MuleSoft.
Salesforce has a long history of producing double-digit annual returns for shareholders. Its fiscal year 2026 revenues of $41.5 billion marked a 10% increase over the prior year.
ESG highlights: Salesforce has achieved net-zero carbon emissions across its value chain and 100% renewable energy for its operations. The company has also established a racial equality and justice task force and spent $16 million on equal pay initiatives.
10. Cadence Design Systems
NASDAQ: CDNS
Key Data Points
Cadence (CDNS -0.53%) provides software and hardware used to design integrated circuits, systems on chips, and printed circuit boards more efficiently.
Business highlights: There's an ongoing demand for custom chips and chips that are smaller, faster, and more efficient. Cadence’s other ventures in 5G mobile, artificial intelligence, and autonomous cars are also showing increased activity.
These trends, along with the recently introduced Xcelium app, should drive continued growth for the company.
Over the past 10 years, Cadence has produced total annualized returns for shareholders of more than 30%. For the 2024 fiscal year, the company expects reported revenue growth of 13.5% to $4.64 billion.
ESG highlights: Cadence has achieved global gender pay equity. In the U.S, it also has race and ethnicity pay equity. The company is targeting a 15% reduction in carbon emissions between 2019 and 2025. In 2020, Cadence established a supplier code of conduct to extend its governance standards throughout the supply chain. It's also making efforts in sustainable design, reducing power consumption by 30% or more.
Types of ESG stocks
As the name implies, ESG stocks span multiple categories, including environment, social, and governance. Let's review the basic types of ESG stocks.
- Environmental: Environmental ESG stocks typically have a focus on renewable energy or sustainability. In recent years, tech companies and others have pledged to go net-zero energy consumption, though those goals may be complicated by AI.
- Social: Social ESG stocks are often focused on DEI (diversity, equity, inclusion), ensuring, for example, that the board of directors has adequate representation of women and people of color, and that pay is equal across genders and racial groups.
- Governance: Governance ESG stocks are those that have received recognition for accountability, an independent board of directors, transparent financial reporting, and executive compensation linked to long-term sustainable performance.
Beyond those categories, investors can also target stocks that are strong in specific issues like solar energy, clean water, or gender equality.
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.
Benefits and risks of investing in ESG stocks
ESG stocks don't align with a specific stock market sector, so the benefits and risks aren't as straightforward as they are with sectors. However, they still exist.
Benefits of investing in ESG stocks:
- Businesses aligned with sustainability, good governance and social progress tend to be viewed more favorably by customers and investors.
- Following ESG guidelines can help companies stay out of regulatory trouble.
- There isn't clear evidence that ESG stocks outperform the market, but they do benefit from drawing in a certain subset of investors.
Risks of investing in ESG stocks:
- Companies might sometimes focus on ESG goals, but lose sight of what's best for the business. Target, for example, flip-flopped on its DEI goals and alienated its customer base.
- Investing exclusively in ESG stocks might cause you to miss other opportunities just because they don't show up in ESG screens.
- ESG companies are sometimes accused of greenwashing, or overstating their environmental bona fides. Companies should be pursuing things like environmental sustainability because it's ethical, not to earn high ESG ratings.
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.
The bottom line
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.
Related investing topics
FAQ
FAQ: ESG Stocks
About the Author
Jeremy Bowman has positions in Nvidia. The Motley Fool has positions in and recommends Adobe, Cadence Design Systems, Intuit, Lam Research, Microsoft, Nvidia, Salesforce, and Xylem. The Motley Fool recommends Idexx Laboratories and Pool and recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
