Impact investing is a great way to establish and grow your wealth while ensuring that your investment decisions are benefiting the world simultaneously. As more and more brands are shifting towards better practices, you’ll have more impact investing companies to choose from right now.
Understandably, it can take time to choose which brands to support with your wealth of choices. Lucky for you, the Decent Investor has found the best impact investing companies to invest in moving forward. These aren’t just good for your wealth, these are good for the world in general as well.
Best Buy (NYSE:BBY)
When it comes to consumer electronics and retail, one of the names that pop into mind is Best Buy. It’s a leader in the sector in North America. Aside from its retail front, Best Buy also provides design, setup, and maintenance services for home media and computer systems.
The brand is one of the few names that benefitted from the pandemic. The increase in the demand for home office solutions and entertainment devices at the time meant that Best Buy was able to provide for the needs of personal and corporate customers.
Best Buy has made a lot of progress on the ESG front as well. In 2020, it achieved 100% zero waste production in its Chino, California branch. Additionally, the company also invested $10 million to build a Teenage Technology Center located in Los Angeles. In this facility, Best Buy continues to support young people and help them learn more about design, programming, and music production.
Salesforce is a leading brand when it comes to customer relationship management or CRM software. To give you a better idea, CRM is a tool that’s used to allow businesses to use customer data to sell more products and services as well. Salesforce runs a suite of helpful apps that can help companies establish better sales and financial records.
Due to the fact that its products are constantly in demand, Salesforce has a good financial history which sees it reaching double-digit annual returns for its shareholders. Revenue for fiscal 2022 was $26.49 billion, an increase of 25% year-over-year. The company announced first-quarter fiscal 2023 revenue of $7.41 billion, up 24% year-over-year.
Salesforce is one of the very few major companies that has achieved net-zero carbon emissions. It’s also relying on 100% renewable energy throughout its value chain. Additionally, Salesforce has established racial equality and justice task force for its entire employee chain.
Adobe is a global leader in software, cloud storage, and publishing programs that are geared toward creatives. Their products also include a suite of marketing analytics tools that business teams can use for research. As a dominant leader in the field of digital content creation, Adobe has a consistent multibillion-dollar revenue stream making it perfect for investors.
In terms of its ESG efforts, Adobe has achieved a global gender pay parity meaning its employees are properly compensated regardless of who they are. Aside from that, Adobe continues its social projects by investing around $87 million in communities to benefit over 1.6 million minorities.
Adobe also partakes in environmental projects. Right now, half of its energy comes from renewable sources. The company has set a goal of getting all of its power from renewable sources by 2035 at least.
Nvidia is the top name when it comes to manufacturing GPUs or graphic processing units for gaming consoles, computers, self-driving cars, and more. There’s no doubt that their energy consumption and carbon emissions are significant on a grander scale. The good news is that the brand has taken a good approach to how they manage its practices.
Beyond their efforts to reduce the impact of their manufacturing process, Nvidia also strengthens their ESG initiatives through social and governance projects.
Right now, they’re focusing on strengthening diversity and inclusion, as well as pursuing major social change through their products. Nvidia received high praise during the pandemic when they continued to pay vendors and contractors amidst closures at the height of the Covid-19 problem. They’ve also recently increased the number of their black employees.
With these ESG efforts and the constant need for better and better computing, Nvidia remains to be a prime choice for impact investors.
Intuit is a B2B-focused business that caters to small-to-mid-sized businesses. The brand’s main revenue comes from its subscription-based accounting software Quickbooks, which can help businesses process important operational aspects such as payroll. The company also caters to consumers directly as well.
The past couple of years has been tremendous for Intuit with them has exceeded $9.5 billion in revenue back in 2021. Aside from its strong financial performance, Intuit also continues to expand its operations, and just recently, it has added MailChimp to its portfolio of assets.
Pool is a global supplier of pool accessories to pool builders, contractors, retailers, as well as repair companies. It constantly dominates the market and is able to sell around 120,000 units of its products to wholesale customers in North America, Europe and Australia.
The company is able to hold a consistent and strong track record of growing market share, executing strategic acquisitions and improving operational efficiency.
Pool benefitted from the surge in demand for swimming pools due to the pandemic. It’s one of the very few companies that has done so. Revenue increased 35% year-over-year to $5.3 billion and diluted earnings per share increased 78% over 2020 to $15.97. The company’s EPS for the 12 months ended March 31, 2022 was $17.96, up 68.8% compared side-by-side. The 10-year annual total return for Pool is nearly 30%.
As for its ESG efforts, Pool has ECO Select products and is able to constantly participate in the EPA’s WaterSense program. Pool is also an advocate of responsible water and wastewater usage. In fact, it supports this by publishing resources on the subject matter.
Lam Research (NASDAQ:LRCX)
Lam is one of the top companies in the field of semiconductors. They also operate in the deposition and cleaning steps of chipmaking. Due to the growing demand for innovative chip design, Lam Research has poised itself as one of the most prominent tech manufacturers around.
In terms of financial performance, Lam Research has been very progressive too. Its revenue during the fiscal year ending June 29, 2021, exceeded $14.6 billion. The previous year, it made $10 billion only.
As for its ESG performance, Lam is focusing more on sustainability measures across its operations. It wants to achieve 100% renewable energy dependence by 2030. Moreover, it wants to achieve zero emissions by 2050. As for its social efforts, the company supports gender equality and supports inclusivity in its workplace.
Microsoft is currently the largest software company in the world and it’s the top cloud platform provider as well. Due to the nature of its business and the constant need for better computing software, Microsoft is a clear choice for investors. How does the brand fair when it comes to its ESG and CSR efforts?
You’ll be happy to know that Microsoft is one of the leaders when it comes to energy conservation. The company has partnered with Black-owned Volt Energy to achieve 100% reliance on renewable energy by 2025 at least. This is just one of its many projects to increase its environmental efforts greatly. The company also plans on having all of its carbon emissions offset since it started doing so in 1975.
Financially speaking, Microsoft is a safe choice considering there’s always a demand for its products and services. If you want a safe and stable choice in investing, then Microsoft might just be the best choice out there.
How Are Companies Rated?
Financial and investment institutions use ESG scores to rate whether or not a company is good for impact investing. To put it simply, the ESG criteria is a set of standards that define how a company stands on three pillars: environmental, social, and governance. Each of the pillars stands to solve specific societal and environmental issues that the company can greatly influence.
You can have your own set of criteria as an investor. But of course, you can also seek help from brokers and investment institutions about your impact investing goals as well.
DYOR For Impact Investing
While these are good picks for impact investing, it’s still very important that you do your own research when it comes to impact investing. These brands are good and all but at the end of the day, the best companies for impact investing are the ones that fit your value and ones that are able to showcase consistent growth.
Bear in mind that impact investing isn’t a one-step process. In fact, you’ll have to constantly research and update yourself about the stocks you are invested on. While these companies are great, there could still be major changes in their CSR and ESG plans down the pipeline so make sure to keep a close watch on their every move. If you feel like the brands are no longer in line with what you stand for, don’t be afraid to shift your funds elsewhere.