Best Sustainable Companies to Invest In

Are you looking for a company that matches your values? You’re not alone. According to a 2022 survey from the Stanford School of Business, young investors are eager to invest in sustainable companies, even if it means taking on greater risk. 

If you’re looking to add some “green” to your portfolio, here are the best sustainable companies to invest in — and why it matters. 

8 Best Sustainable Companies to Invest In

The good news is that many companies are taking climate change seriously. The following are the eight best sustainable companies to invest in.

1. Sunrun Inc. (NASDAQ: RUN)

Sunrun is responsible for installing roughly 20% of America’s solar panels. More significantly, the company has made strides in virtual power plants — technology that allows solar customers to store excess solar power and then sell it to others.

In 2020, Sunrun acquired Vivint Solar, formerly its biggest competitor. It also has been advocating for government legislation for the furtherance of solar energy. The average price has hovered around $21, but the company’s future looks strong.

2. Brookfield Renewable Partners (NYSE: BEP)

Brookfield Renewable Partners specializes in renewable energy, producing over 20,000 megawatts of electricity. The company boasts roughly $60 million in assets under management, and its energy generation is derived from wind, solar and hydroelectricity.

Recent years have seen record-breaking inflows of cash; the company has plans to double its size by 2026. The stock price hovers around $26, with a large potential for increases in the coming years.

3. Republic Services Inc. (NYSE: RSG)

Republic Services is the second-largest waste management company in the United States. In addition to operating nearly 200 landfills, the company has a strong focus on recycling and nonhazardous domestic waste disposal.

The company is still exclusive to the United States, but with 30,000 employees, it represents a stable investment, with stock prices currently over $115 per share.

4. NextEra Energy Inc. (NYSE: NEE)

NextEra Energy is a wind energy company that’s poised for growth, thanks to the Biden administration’s commitment to double America’s offshore wind energy by 2030. That’s in addition to the wind energy demands that have increased over the past two decades.

The average price is now around $93 per share, but the increased dependence on wind could make NextEra a great investment opportunity.

5. Ormat Technologies Inc. (NYSE: ORA)

Green investors might also consider geothermal energy companies like Ormat Technologies. The company maintains 25 power plants around the globe, in addition to focusing on energy storage, electricity generation and other sustainable business segments.

The company’s stock sits at an average of $77 per share, but with international expansion projects, Ormat may soon experience additional growth.

6. Enphase Energy Inc. (NASDAQ: ENPH)

Enphase Energy is another solar energy company famous for using micro inverters in place of a single inverter on its solar panels. This sounds technical, but it translates into more consistency in solar power production. This way, solar panels can work individually, so users will generate solar energy even if one solar panel stops working.

This innovation may be what’s behind the current stock price of $135, representing a general upward trend. This price may even increase if the company expands beyond U.S. borders, so this is one of the best sustainable companies to invest in.

7. Ford Motor Co. (NYSE: F)

Traditional car manufacturers haven’t always been thought of as green investments, but many major companies have been changing the game. Ford is committed to reducing dependence on fossil fuels — not only in its growing line of electric vehicles but also by aiming to convert its plants to renewable energy by 2035.

At roughly $7 per share, Ford makes an affordable, stable addition to any stock portfolio. And thanks to its commitment to minimize greenhouse gas emissions, Ford is poised to stand strong against competitors like Tesla Inc.

8. Mowi ASA (OTCMKTS: MHGVY)

Green investing isn’t always about pursuing alternative energy sources. Some companies simply demonstrate a commitment to a sustainable business model. Mowi ASA focuses on providing sustainable seafood, particularly farm-raised salmon.

This makes Mowi an opportunity to invest in a sustainable business and diversify your investments away from tech and energy companies and focus on food production. With the demand for salmon increasing, Mowi is also positioned for strong growth in the coming years.

What Is a Sustainable Company?

A sustainable company is any business whose practices are designed to avoid negatively impacting the environment. Sustainable businesses might demonstrate a commitment to the following:

• Reducing carbon emissions
• Relying on recycled/recyclable materials
• Producing clean forms of energy such as solar, wind or geothermal
• Optimizing supply chains to minimize environmental impact

Some businesses extend sustainable practices to the community as well. For example, a sustainable business might sponsor educational programs for the area’s youth.

Why Invest in Sustainable Companies?

The greatest reason to invest in sustainable businesses is to support their commitment to the environment. When you invest in these companies, you’re contributing to their ongoing efforts to pursue sustainable business practices and behave responsibly with regard to the planet or the immediate community.

But that’s to say nothing of the practical benefits of sustainable investing. In recent years, companies that have pursued these goals have seen surprising resilience even in the face of economic instability. 

And many companies adopting sustainable business practices (like Ford) are large-cap corporations that have a lot of staying power. This provides investors the chance to develop a well-balanced portfolio of growth stocks that they can depend on for long-term results.

Where to Invest in Sustainable Companies

Where can you find the best sustainable companies to invest in? Find a broker here.

What to Consider When Investing in Sustainable Companies

The definition of sustainability has become clearer thanks to the rise of environmental, social and governance (ESG) criteria. A company must meet specific regulatory standards to be listed as an ESG stock on the stock market, and these standards are also helpful when comparing sustainable companies to invest in.

Environmental Factors

Start by evaluating the way the company uses energy. How does it regulate carbon emissions? What are its waste management strategies? What commitments has it made to renewable resources?

Social Factors

How does the company treat its employees? Does it have a diversity, equity and inclusion (DEI) program? How does it engage with its local community? Does it publicize its labor practices?

Governance Factors

Governance refers to a company’s business practices. Does it pursue corporate transparency and accountability? What ethical business practices does the company embrace? Is the board diverse? Who dictates the composition (and compensation) of the executive board?  

Invest in a Better Future

Environmental sustainability and ESG criteria will continue to play a major role in the American economy. Green companies can be a valuable part of your investment strategy. 

And as you’ve seen, sustainable businesses can be anything from energy producers to car manufacturers to seafood companies, giving investors a path toward diversification. Maybe it’s time to invest in a better future.

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