Investing in certain companies on the FTSE 100, S&P 500 and ASX 200 can have a positive sustainable impact on our world whilst also offering the chance to increase returns, new research by DailyFX shows.
The forex news provider analysed the companies that have both a significant sustainable impact and are considered strong investments across each of the major global stock markets. To do this, they researched what investments perform well in both ESG performance and dividend yields.
ESG deals with an array of environmental, social and governance criteria to measure companies. Consumers, institutional investors and pension funds who are interested in making a positive impact on the world around them can use this criteria to rate companies for long-term sustainability.
Coca Cola is the FTSE 100’s top company to Invest in for sustainable Impact
The multi-national beverage company Coca Cola holds the top two spots for having the biggest sustainable impact of all the companies in the FTSE 100. The brand has an ESG score of 92 out of 100, three more points than its closest competitor Unilever.
With a dividend yield of 2.19%, investors can benefit from both its levels of pay outs as well as its sustainable impact. In comparison to the top 25 companies for ESG score, Coca Cola has a higher stock price per share too.
Coca Cola’s sustainability manifesto claims that the company replenishes the water it uses, recycles a bottle for every one sold and is committed to reducing its plastic use by 10,000 tonnes every year.
HPE ranks as the most sustainable company in the S&P 500
For investors focused on the US S&P 500 stock index, Hewlett Packard Enterprise, or HPE, tops the ranking for sustainable impact. Its current ESG score sits at 91 out of 100, ranking it second in total across the three stock markets studied.
Not only that, with a current stock price of just $16.46, HPE, which sells servers, storage, security and related corporate services, ranks highest for both dividend yield and ESG score.
In the previous two years, the company has reduced its carbon footprint from operations by 47% and pledges to transition to the world’s leading edge-to-cloud platform-as-a-service company by 2022.
Dexus Property named the best company in the ASX 200 for sustainable impact
In the Australian ASX 200 stock market, two companies in real estate are noteworthy.
DailyFX’s study found that Dexus Property ranks as a leader when it comes to both sustainability and dividend yields.
Having 89 out of 100, the Australian real estate giant scores three higher than second placed Stockland, also a major player in Australian residential and commercial property development.
In 2020, Dexus Property reported a 50.1% reduction in group office emissions and beyond 2021 plans to source at least 70% of electricity from on-site and off-site renewable sources.
Stock prices per share for both Dexus Property and Stockland are low, with $7.84 and $3.61 respectfully.
XXX, YYY at DailyFX, said: “Companies have different incentives to invest in sustainability, ranging from potentially higher stock price, first mover advantage and synergies in their underlying business model. For an investor, these factors can present opportunities in addition to the broader benefit of promoting environmentally conscious behaviour.”
“Some socially responsible investors rule out investments in entire industries based on moral values. Our report considers ways in which environmental risks and opportunities (such as pollution control technologies mitigating climate change) have material impacts on companies’ performance and overall investment record.”
When using this research, please credit:
Daniel Sarath, Digital PR Manager at Kaizen Growth Marketing
Launched in 2002, DailyFX.com, the free news and research website from IG, is one of the world’s leading sources for news and analysis on the currency, commodity and index trading community.
DailyFX analysts report every day on the latest changes in the ﬁnancial markets, providing timely fundamental, economic and technical analysis and a close examination of promising chart formations with live currency quotes. DailyFX.com also provides analysis of market moves, explaining economic, political, and technical factors driving the market.
Methodology & Sources
S&P 500 ESG scores were used to determine the main factor for ranking the companies with the biggest sustainable impact when invested in. To support our study, we looked into the most recent dividends percentage paid out from these companies, along with their 2020 revenue figures and current stock prices. Stock price data taken on 26/04/2021, with the full data set being collected through a date range of 23/04/2021 to 26/04/2021.