What Are the Best ESG Stocks in 2021?

Published on: December 2, 2021
Author: NAI500

What exactly is ESG, and Why does it matter?

When it comes to investing, performance and risk are no longer the only factors investors are using to evaluate potential stock picks; many are also looking for companies that display a high level of ESG.

ESG stands for environmental, social, and (corporate) governance. No longer just a niche strategy reserved for the most environmentally conscious, ESG investing is now on track to become a trillion-dollar market by 2030, according to the head of iShares America.

Broken down by category, we can better understand what ESG investing is and why it’s so important.

The E or environmental aspect of ESG investing addresses a company’s conservation efforts and how well it works to mitigate its carbon footprint. This includes a company’s climate change policies, greenhouse gas emissions, and sustainable use of resources.

S represents the social element of ESG. This relates to how a company treats people, including employees, consumers, and communities. Acting in a socially responsible way goes beyond simple customer satisfaction. Companies must also adopt policies that protect gender and diversity, communities, human rights, and fair labor standards.

How a company is managed is also a consideration of ESG investing. The G stands for governance and encompasses everything from board composition and executive compensation to company reputation and business ethics.

So, why does it matter?

Environmental and social benefits aside, ESG stocks offer investors portfolio diversification and protection from market turbulence. No matter the industry or the size of a given company, bad business policies present financial and operational risk.

In 2019, climate-change-induced wildfires forced California energy giant PG&E (NYSE:PCG) to declare bankruptcy. Share prices lost over 50% of their value and have yet to recover almost three years later.  And while they may have been the first climate-change bankruptcy, experts warn they won’t be the last. What PG&E and other companies can take away from this situation is how company action – or in-action – to limit carbon emissions impacts the environment, business operations, and profit.

Top-rated ESG stocks in 2021

With the negative effects of climate change and poor corporate governance squarely in the spotlight, investors looking for ways to invest responsibly are increasingly turning to ESG investing. Several rating agencies measure ESG performance, providing easily comparable information on the best performers and worst offenders.

IBD recently named its 100 ESG companies of 2021. The top 15 performers include:

  1. Microsoft (MSFT)
  2. Linde (LIN)
  3. Accenture (ACN)
  4. J.B. Hunt (JBHT)
  5. Xylem (XYL)
  6. Texas Instruments (TXN)
  7. Salesforce.com (CRM)
  8. Gildan Activewear (GIL)
  9. Metropolitan Bank (MCB)
  10. IHS Markit (INFO)
  11. STMicroelectronics (STM)
  12. Nvidia (NVDA)
  13. Rogers (ROG)
  14. Oracle (ORCL)
  15. Motorola Solutions (MSI)

However, you don’t have to be an NYSE-listed company to deliver on sustainability and sustainable gains.

Is AirTest (TSXV:AAT) an ESG stock?

Thousands of companies are working every day to help mitigate the effects of climate change on our planet. One of those companies is AirTest Technologies. This well-established green tech specializes in demand control ventilation systems that help improve commercial building efficiency – increasing energy performance while reducing waste.

The company’s proprietary sensor technology has already been deployed throughout major retailer outlets, including Lowe’s, Shoppers Drug Mart, and Ikea.

Early this month, the company announced the launch of AirTest IAQEye™️. The wireless multi-sensor device enables monitoring and reporting of multiple indoor air-quality parameters and is suitable for commercial, retail, and public building applications. Results from case studies of more than 100,000 existing wired sensors installations confirm a dramatic drop in energy use, and the company expects this latest addition to provide continued results.

Making headways into what could be a potentially significant market, large orders for AirTest sensors were placed by two companies in the agricultural and industrial controls markets. In-door growing requires copious amounts of C02, and AirTest sensors will help maintain a safe working environment and compliance with OSHA (Occupational Safety and Health Administration) standards.

In partnership with Environ Applied HVAC Systems, AirTest has successfully penetrated the market in Arizona with four completed projects, including a school, a firehouse, and a large-scale indoor growing operation. The two companies have now signed a distribution agreement for the AirTest sensor technology.

Following its attendance at the 2021 Green School Summit in California, AirTest has received significant interest in its air quality sensor technology. The company is currently engaging with unified school districts in Southern California for installations of the new IAQEye™ wireless CO2 sensors, which are required in all California classrooms by law.

In Los Angeles, AirTest has been contracted by long-time client Western Allied Corporation to supply its newly enhanced parking garage sensors for two large-scale commercial development projects, including the new US$1 billion Warner Brother Corporate head office.

Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.

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