For investors interested in ESG initiatives, sometimes they have to strike a balance between performance and the company’s level of involvement when it comes to ESG issues. However, data used from indexing firm MSCI helped to extrapolate 50 of the top-performing companies that are also high on ESG ratings, which was published in Investor’s Business Daily.
“Among companies with ESG ratings of AAA or AA from MSCI ESG Research as of Sept. 11, 2019, these 50 companies had the highest IBD Composite Ratings, reflecting broad strength in fundamental and technical areas linked to price performance,” wrote Investor’s Business Daily. “Nearly all have a Composite Rating of 80 or higher, putting them in the top 20% of stocks.”
Here’s a sampling of the top 10 listed companies:
| Rank | Company | Industry | ESG Rating |
| 1 | Edwards Lifesciences | Medical Products | AA |
| 2 | Equinix | Finance-Property REIT | AA |
| 3 | Prologis | Finance-Property REIT | AA |
| 4 | Emcor Group | Building-Maintenance & Services | AA |
| 5 | Cadence Design Systems | Computer Software-Design | AA |
| 6 | National Research | Commercial Services-Health Care | AA |
| 7 | NextEra Energy | Utility-Electric Power | AAA |
| 8 | Microsoft | Computer Software-Desktop | AAA |
| 9 | Hasbro | Leisure-Toys/Games/Hobby | AA |
| 10 | Owens Corning | Building-Construction Products/Misc. | AA |
Click here for the full, expansive list.
Environmental, social and governance (ESG) funds are beginning to see new issues arise in prominence and this could affect how said funds choose which topics come into the forefront, according to a recent State Street Global Advisors Stewardship Report.
“In 2018, we observed that social issues such as gender diversity, pay equality, wage strategies, sexual harassment in the workplace and worker retraining are raising in prominence as emerging ESG issues facing companies,” noted Rick LacailleGlobal, Chief Investment Officer at State Street Global Advisors. “Overseeing and mitigating these risks are the next frontier of challenges facing boards.”
One fund to look at is the FlexShares STOXX US ESG Impact Index Fund (BATS: ESG). The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® USA ESG Impact Index.
The fund will invest at least 80% of its total assets (exclusive of collateral held from securities lending) in the securities of the underlying index. The underlying index is an optimized index designed to provide broad market exposure that is tilted toward U.S. companies that score better with respect to a small set of ESG characteristics and to provide the potential for attractive risk-adjusted performance relative to the STOXX® USA 900 Index, as determined by the index provider.
For more market trends, visit ETF Trends.