When people think of ESG, the word “environment” usually leaps to mind. And that’s understandable. ESG stands for environmental, social and governance. It’s a group of nonfinancial factors that have grown increasingly important to investors, regulators and the general public. But environmental factors are only a part of the story — especially when it comes to finding the best ESG companies.
This past year, extreme weather events have elevated environmental concerns. Social challenges — diversity, human rights and workplace issues — have become more significant as employees return to the office. Consider this year’s labor actions, from the SAG-AFTRA strike to the United Auto Workers’ walkout. The UAW doesn’t oppose the shift to electric vehicles, but is concerned about the transition’s impact on workers.
And all year long, companies have been waiting for the SEC to issue new climate disclosure rules. The implementation timelines are opaque, and litigation is almost assured. However, the new rules will place significant reporting obligations on companies and bring a sense of urgency to their ESG strategy planning.
Helping investors find the best ESG companies
The many factors that go into ESG rankings can make for surprising and confusing lists. A company may excel in one ESG dimension, such as leadership and governance, but rank poorly for its environmental efforts.
The energy transition is here. Dow Jones — IBD’s parent company — says investment managers in the U.S. will increase the percentage of ESG-related investments in their portfolios substantially in the next couple of years. By 2025, 11% to 15% of U.S. managers will put 40% of their portfolios in ESG investments.
How can investors protect their portfolio and accurately value the companies poised to profit from ESG excellence?
Finding the best ESG companies requires study. Investor’s Business Daily can help. We’ve compiled our fifth annual ESG Investing special report. Public companies that made our 2023 100 Best ESG Companies list combine high Dow Jones sustainability scores with superior IBD technical and fundamental stock ratings. They are standouts for ESG investing.
ESG investing: Best companies methodology
To build the 2023 100 Best ESG Companies list, IBD started with each company’s environmental, social and governance (ESG) sustainability score created by Dow Jones Newswires, an IBD affiliate. These scores capture a broad spectrum of information on the ESG profile of more than 6,000 global companies.
On Aug. 24, IBD asked Dow Jones for an ESG-scored list of all the U.S.-traded companies it tracks, a total of 2,067. We then cut the list to 1,559 companies on Aug. 25 by removing nonpublic companies and companies with stock prices below $10 a share. Any companies that lacked sufficient data to create an IBD Composite Rating were also removed from the list.
IBD further qualified the ESG investing list by removing those companies that did not meet or beat the S&P 500 in the past five years. We selected the 100 with the highest IBD Composite Rating — all with scores of 81 or better. To break any ties, we looked at companies’ Relative Strength Rating and then, if needed, their EPS Rating. Finally, we ranked the 100 companies by Dow Jones’ ESG score.
| Rank | Company | Symbol | Industry | ESG score | Comp Rtg | RS Rtg | EPS Rtg | SMR Rtg | 3-yr EPS growth rate | ROE | Last qtr sales % chg | Last qtr EPS % chg | Div yield |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Microsoft | (MSFT) | Computer Software – Desktop | 72.76 | 98 | 89 | 96 | B | 18 | 39 | 8 | 21 | 0.80 |
| 2 | Applied Materials | (AMAT) | Electronics – Semiconductor Equipment | 71.71 | 94 | 91 | 85 | A | 29 | 55 | -1 | -2 | 0.80 |
| 3 | Woodward | (WWD) | Aerospace/Defense | 71.69 | 97 | 93 | 85 | B | -9 | 8 | 30 | 114 | 0.70 |
| 4 | Verisk Analytics | (VRSK) | Commercial Services – Market Research | 71.58 | 93 | 91 | 89 | A | 2 | 35 | 10 | 19 | 0.50 |
| 5 | Mastercard | (MA) | Finance – Credit Card/Payment Processing | 71.57 | 95 | 87 | 86 | A | 22 | 152 | 14 | 13 | 0.50 |
| 6 | Caterpillar | (CAT) | Machinery – Construction/Mining | 70.66 | 99 | 92 | 92 | A | 35 | 45 | 22 | 75 | 1.90 |
| 7 | Marathon Petroleum | (MPC) | Oil & Gas – Refining/Marketing | 69.42 | 84 | 95 | 35 | B | N.A. | 50 | -32 | -50 | 2.00 |
| 8 | Nvidia | (NVDA) | Electronics – Semiconductor Mfg | 69.4 | 99 | 99 | 93 | A | 25 | 34 | 101 | 429 | 0.03 |
| 9 | Dover | (DOV) | Machinery – General Industrial | 68.65 | 86 | 50 | 79 | B | 17 | 29 | -3 | -4 | 1.40 |
| 10 | Motorola Solutions | (MSI) | Telecom – Consumer Products | 68.54 | 83 | 69 | 95 | A | 13 | 4684 | 12 | 28 | 1.20 |
| 11 | Bunge | (BG) | Agricultural Operations | 68.21 | 90 | 90 | 93 | C | 30 | 25 | -16 | 25 | 2.30 |
| 12 | Sherwin-Williams | (SHW) | Chemicals – Paints | 68.17 | 91 | 85 | 95 | A | 5 | 83 | 6 | 37 | 0.80 |
| 13 | Dell Technologies | (DELL) | Computer Hardware – Peripherals | 67.07 | 86 | 98 | 40 | C | 11 | 0 | -100 | -29 | N.A. |
| 14 | Adobe | (ADBE) | Computer Software – Desktop | 66.75 | 98 | 96 | 96 | A | 17 | 45 | 10 | 17 | N.A. |
| 15 | Mondelez | (MDLZ) | Food – Confectionary | 66.74 | 83 | 70 | 88 | B | 7 | 15 | 17 | 17 | 2.30 |
| 16 | Church & Dwight | (CHD) | Soap & Cleaning Preparations | 66.4 | 86 | 80 | 87 | B | 3 | 22 | 10 | 21 | 1.10 |
| 17 | Meta Platforms | (META) | Internet – Content | 66.33 | 98 | 98 | 87 | B | -1 | 19 | 11 | 31 | N.A. |
| 18 | Air Products & Chemicals | (APD) | Chemicals – Specialty | 66.15 | 84 | 72 | 92 | A | 11 | 17 | -5 | 16 | 2.40 |
| 19 | Gartner | (IT) | Commercial Services – Market Research | 65.82 | 85 | 66 | 93 | A | 46 | 305 | 9 | 0 | N.A. |
| 20 | Arthur J. Gallagher | (AJG) | Insurance – Brokers | 65.66 | 98 | 87 | 96 | A | 23 | 19 | 20 | 17 | 0.90 |
| 21 | Lam Research | (LRCX) | Electronics – Semiconductor Equipment | 65.06 | 90 | 93 | 71 | B | 30 | 76 | -31 | -32 | 1.00 |
| 22 | TJX | (TJX) | Retail – Apparel/Shoes Accessories | 65 | 95 | 90 | 88 | A | 132 | 59 | 8 | 23 | 1.50 |
| 23 | Owens Corning | (OC) | Building – Construction Products MSC | 64.53 | 96 | 96 | 89 | B | 50 | 28 | -1 | 10 | 1.50 |
| 24 | Jabil | (JBL) | Electronics – Contract Mfg | 64.48 | 91 | 95 | 95 | B | 48 | 48 | 2 | 16 | 0.30 |
| 25 | Alphabet | (GOOGL) | Internet – Content | 64.04 | 98 | 93 | 90 | A | 30 | 24 | 7 | 17 | N.A. |
| 26 | Deckers Outdoor | (DECK) | Apparel – Shoes & Related Mfg | 63.83 | 96 | 92 | 98 | A | 22 | 31 | 10 | 45 | N.A. |
| 27 | Arista Networks | (ANET) | Computer – Networking | 63.37 | 97 | 94 | 98 | A | 39 | 33 | 39 | 46 | N.A. |
| 28 | Onsemi | (ON) | Electronics – Semiconductor Equipment | 63.13 | 84 | 90 | 77 | A | 116 | 44 | 0 | -1 | N.A. |
| 29 | Tetra Tech | (TTEK) | Pollution Control | 62.95 | 86 | 70 | 96 | A | 17 | 20 | 36 | 19 | 0.60 |
| 30 | Marriott | (MAR) | Leisure – Lodging | 62.93 | 91 | 89 | 76 | A | 148 | 220 | 14 | 26 | 1.00 |
| 31 | Eli Lilly | (LLY) | Medical – Diversified | 62.81 | 98 | 97 | 87 | A | 7 | 73 | 28 | 69 | 0.80 |
| 32 | Jacobs Solutions | (J) | Building – Heavy Construction | 62.78 | 93 | 80 | 82 | B | 10 | 15 | 9 | -2 | 0.70 |
| 33 | Visa | (V) | Finance – Credit Card/Payment Processing | 62.71 | 95 | 85 | 91 | A | 21 | 44 | 12 | 9 | 0.70 |
| 34 | Commercial Metals | (CMC) | Metals – Processing & Fabrication | 62.54 | 83 | 84 | 83 | B | 67 | 36 | -7 | -23 | 1.10 |
| 35 | Federal Signal | (FSS) | Security/Safety | 62.36 | 87 | 84 | 93 | B | 8 | 15 | 21 | 26 | 0.60 |
| 36 | Fortinet | (FTNT) | Computer Software – Security | 62.15 | 97 | 73 | 99 | A | 34 | 385 | 26 | 58 | N.A. |
| 37 | Zoetis | (ZTS) | Medical – Ethical Drugs | 61.83 | 90 | 85 | 90 | A | 11 | 51 | 6 | 18 | 0.80 |
| 38 | Cadence Design Systems | (CDNS) | Computer Software – Design | 61.62 | 95 | 91 | 95 | A | 24 | 43 | 14 | 13 | N.A. |
| 39 | Clean Harbors | (CLH) | Pollution Control | 60.47 | 85 | 90 | 94 | B | 66 | 23 | 3 | -13 | N.A. |
| 40 | Workday | (WDAY) | Computer Software – Enterprise | 60.46 | 99 | 95 | 99 | A | 22 | 19 | 17 | 58 | N.A. |
| 41 | Microchip Tech | (MCHP) | Electronics – Semiconductor Mfg | 60.22 | 83 | 58 | 96 | A | 33 | 54 | 17 | 20 | 2.10 |
| 42 | CoStar | (CSGP) | Commercial Services – Market Research | 60.11 | 84 | 72 | 83 | B | 11 | 8 | 13 | 11 | N.A. |
| 43 | Chipotle Mexican Grill | (CMG) | Retail – Restaurants | 59.97 | 93 | 79 | 98 | A | 65 | 39 | 14 | 36 | N.A. |
| 44 | Prologis | (PLD) | Finance – Property REITs | 59.65 | 87 | 51 | 96 | A | 17 | 8 | 96 | 65 | 2.80 |
| 45 | HubSpot | (HUBS) | Computer Software – Specialty Enterprise | 59.43 | 99 | 96 | 99 | A | 48 | 15 | 25 | 205 | N.A. |
| 46 | Booking Holdings | (BKNG) | Leisure – Travel Booking | 59.43 | 98 | 95 | 82 | A | 278 | 89 | 27 | 97 | N.A. |
| 47 | Watts Water Technologies | (WTS) | Building – Construction Products/MSC | 59.21 | 94 | 82 | 93 | B | 31 | 19 | 1 | 11 | 0.70 |
| 48 | AppFolio | (APPF) | Computer Software – Specialty Enterprise | 59.14 | 97 | 97 | 76 | C | N.A. | 0 | 25 | 667 | N.A. |
| 49 | American Homes 4 Rent | (AMH) | Finance – Property REITs | 58.86 | 84 | 77 | 83 | B | 15 | 4 | 9 | 6 | 2.40 |
| 50 | Iron Mountain | (IRM) | Commercial Services – Document Management | 58.51 | 94 | 84 | 76 | A | 8 | 69 | 5 | -4 | 4.20 |
| 51 | Parker-Hannifin | (PH) | Machinery – General Industrial | 58.36 | 99 | 92 | 96 | A | 22 | 28 | 22 | 18 | 1.40 |
| 52 | Taylor Morrison | (TMHC) | Building – Residential/Commercial | 58.33 | 92 | 94 | 92 | B | 58 | 25 | 3 | -7 | N.A. |
| 53 | Rockwell Automation | (ROK) | Electrical Power – Equipment | 58.31 | 85 | 62 | 90 | A | 12 | 43 | 14 | 13 | 1.50 |
| 54 | Martin Marietta Materials | (MLM) | Building Materials – Cement/Concrete | 58.24 | 95 | 87 | 97 | B | 9 | 11 | 11 | 41 | 0.60 |
| 55 | Costco Wholesale | (COST) | Retail – Major Discount Chains | 58.2 | 91 | 80 | 95 | B | 14 | 30 | 2 | 18 | 0.70 |
| 56 | Cintas | (CTAS) | Commercial Services – Outsourcing | 57.99 | 96 | 79 | 96 | A | 17 | 38 | 10 | 19 | 1.10 |
| 57 | Paychex | (PAYX) | Commercial Services – Outsourcing | 57.65 | 86 | 58 | 92 | A | 15 | 45 | 7 | 20 | 2.90 |
| 58 | Intuit | (INTU) | Computer Software – Financial | 57.54 | 98 | 93 | 97 | A | 27 | 26 | 7 | 17 | 0.60 |
| 59 | Booz Allen Hamilton | (BAH) | Commercial Services – Consulting | 57.52 | 93 | 85 | 96 | A | 11 | 59 | 18 | 30 | 1.60 |
| 60 | Vulcan Materials | (VMC) | Building Materials – Cement/Concrete | 57.41 | 91 | 87 | 77 | B | -8 | 10 | 8 | 50 | 0.80 |
| 61 | Idexx Laboratories | (IDXX) | Medical – Systems/Equipment | 57.37 | 88 | 77 | 97 | A | 16 | 105 | 10 | 76 | N.A. |
| 62 | Trex | (TREX) | Building – Construction Products/MSC | 57.21 | 86 | 94 | 64 | C | 6 | 32 | -8 | -10 | N.A. |
| 63 | Consol Energy | (CEIX) | Energy – Coal | 57.09 | 99 | 97 | 79 | A | N.A. | 51 | 21 | 40 | 3.90 |
| 64 | Fair Isaac | (FICO) | Computer Software – Financial | 57.08 | 98 | 96 | 96 | A | 30 | 0 | 14 | 27 | N.A. |
| 65 | Tempur Sealy International | (TPX) | Household Office Furniture | 56.95 | 89 | 94 | 81 | B | 20 | 355 | 5 | 0 | 1.00 |
| 66 | Stryker | (SYK) | Medical – Products | 56.94 | 88 | 86 | 87 | A | 12 | 23 | 11 | 13 | 1.00 |
| 67 | Veeva Systems | (VEEV) | Computer Software – Medical | 56.87 | 95 | 92 | 93 | A | 22 | 21 | 4 | -8 | N.A. |
| 68 | MSA Safety | (MSA) | Security/Safety | 56.72 | 96 | 91 | 92 | A | 12 | 25 | 20 | 42 | 1.00 |
| 69 | Graco | (GGG) | Machinery – General Industrial | 56.17 | 85 | 62 | 92 | A | 17 | 26 | 2 | 10 | 1.20 |
| 70 | Regeneron Pharmaceuticals | (REGN) | Medical – Biotech | 55.91 | 92 | 83 | 83 | B | 19 | 25 | 11 | 5 | N.A. |
| 71 | Morningstar | (MORN) | Commercial Services – Market Research | 55.82 | 88 | 89 | 63 | B | -12 | 13 | 7 | 37 | 0.60 |
| 72 | Illinois Tool Works | (ITW) | Machinery – General Industrial | 55.77 | 83 | 66 | 78 | A | 14 | 85 | 2 | 9 | 2.30 |
| 73 | Emcor | (EME) | Building – Maintenance & Services | 55.72 | 98 | 96 | 97 | B | 16 | 19 | 12 | 48 | 0.30 |
| 74 | S&P Global | (SPGI) | Commercial Services – Market Research | 55.64 | 84 | 74 | 86 | A | -1 | 20 | 4 | 11 | 0.90 |
| 75 | M/I Homes | (MHO) | Building – Residential/Commercial | 55.53 | 93 | 98 | 92 | B | 43 | 27 | -3 | -14 | N.A. |
| 76 | Lithia Motors | (LAD) | Retail – Wholesale Auto | 55.38 | 93 | 89 | 80 | B | 52 | 26 | 12 | -10 | 0.60 |
| 77 | KB Home | (KBH) | Building – Residential/Commercial | 55.26 | 92 | 95 | 82 | B | 52 | 24 | 3 | -16 | 1.60 |
| 78 | Aecom Technology | (ACM) | Building – Heavy Construction | 55.23 | 90 | 62 | 87 | B | 21 | 19 | 13 | 11 | 0.80 |
| 79 | Raymond James Financial | (RJF) | Financial – Investment Bank/Brokers | 55.2 | 94 | 74 | 94 | A | 28 | 18 | 19 | 15 | 1.60 |
| 80 | Vertex Pharmaceuticals | (VRTX) | Medical – Biotech | 55.2 | 91 | 81 | 89 | A | 22 | 32 | 14 | 8 | N.A. |
| 81 | Terex | (TEX) | Machinery – Construction/Mining | 55.08 | 99 | 92 | 91 | A | 181 | 26 | 30 | 120 | 1.20 |
| 82 | Pathward Financial | (CASH) | Financial – Savings & Loan | 54.93 | 96 | 85 | 98 | A | 20 | 18 | 31 | 89 | 0.40 |
| 83 | Paycom Software | (PAYC) | Computer Software – Enterprise | 54.55 | 84 | 28 | 98 | A | 29 | 34 | 27 | 29 | 0.50 |
| 84 | Extreme Networks | (EXTR) | Computer – Networking | 54.36 | 97 | 94 | 96 | A | 101 | 143 | 31 | 120 | N.A. |
| 85 | United Rentals | (URI) | Commercial Services – Leasing | 54.31 | 96 | 91 | 96 | A | 32 | 35 | 28 | 26 | 1.30 |
| 86 | ATI | (ATI) | Steel – Specialty Alloys | 54.3 | 95 | 92 | 62 | A | N.A. | 33 | 9 | 9 | N.A. |
| 87 | Casey’s Retail | (CASY) | Retail – SPR/Mini markets | 54.3 | 83 | 74 | 92 | B | 16 | 18 | -4 | -7 | 0.70 |
| 88 | Walmart | (WMT) | Retail – Major Discount Chains | 54.26 | 86 | 83 | 83 | B | 6 | 21 | 6 | 4 | 1.40 |
| 89 | ITT | (ITT) | Machinery – General Industrial | 54.21 | 97 | 90 | 93 | B | 15 | 17 | 14 | 36 | 1.10 |
| 90 | RBC Bearings | (RBC) | Metals – Processing & Fabrication | 54.15 | 91 | 77 | 89 | A | 26 | 10 | 9 | 20 | N.A. |
| 91 | Herc Holdings | (HRI) | Commercial Services – Leasing | 54.14 | 92 | 70 | 95 | A | 71 | 33 | 25 | 9 | 2.00 |
| 92 | Houlihan Lokey | (HLI) | Financial – Investment Bank/Brokers | 54 | 85 | 89 | 69 | C | 15 | 21 | -1 | -19 | 2.10 |
| 93 | Lennox International | (LII) | Building – A/C & Heating Products | 53.99 | 97 | 96 | 93 | n.a. | 17 | 0 | 3 | 22 | 1.20 |
| 94 | Hawkins | (HWKN) | Chemicals – Basic | 53.83 | 96 | 93 | 97 | B | 27 | 18 | 2 | 19 | 1.10 |
| 95 | Paccar | (PCAR) | Trucks & Parts – Heavy Duty | 53.5 | 95 | 90 | 92 | A | 41 | 24 | 24 | 70 | 1.20 |
| 96 | Beazer Homes | (BZH) | Building – Residential/Commercial | 53.46 | 91 | 98 | 71 | B | 79 | 27 | 9 | -19 | N.A. |
| 97 | Inter Parfums | (IPAR) | Cosmetics/Personal Care | 53.39 | 88 | 87 | 96 | A | 64 | 20 | 26 | 27 | 1.80 |
| 98 | Broadcom | (AVGO) | Electronics – Semiconductor Mfg | 53.22 | 93 | 94 | 92 | A | 28 | 70 | 8 | 14 | 2.10 |
| 99 | Gulfport Energy | (GPOR) | Oil & Gas – US Exploration & Discovery | 53.21 | 83 | 95 | 11 | B | 24 | 64 | -35 | -55 | N.A. |
| 100 | Kadant | (KAI) | Machinery – General Industrial | 53.09 | 96 | 81 | 89 | B | 31 | 18 | 11 | 13 | 0.50 |
Sources: IBD, Dow Jones. This list includes only U.S-traded stocks priced at 10-plus and among the top-ranked companies in Dow Jones ESG scores. All data is as of 8/25/23. The 100 companies on this list are ranked by ESG score. Ties are broken by the highest IBD Composite Ratings, and then by RS Rating and EPS Rating. All stocks on the list met or beat the S&P 500 over the past five years.
Disclaimer
The content of this webpage is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial circumstances.
Source: Investor’s Business Daily, Best ESG Companies 2023, Dated October 27, 2023
