Stocks to buy

We may be headed for a global recession and that means the best stocks to buy are cynically geared rather than say focused on ESG investing principles. It’s not hard to see why. For instance, evidence indicates that people drink more alcohol during hard economic times. Therefore, what better way to address this dynamic than acquire shares of alcoholic beverage companies?

However, not every market participant shares the same priorities. Increasingly, both millennials and members of Generation Z care strongly about environmental, social and governance (ESG) principles. It’s to the point now where companies ignoring the concerns of ESG investing can face repercussions. Plus, many people believe strongly that making money without regard to ethical standards is inappropriate.

Further, it might not be beneficial on the bottom line to always think cynically. According to Harvard Business Review, ESG investing can promote positivity across the board and just as well, be profitable in the process. While that might be hard to believe, when you consider shifting social mores, it makes sense.

So, if you want to have your gains and feel holistically good about it, consider these best stocks to buy for sustainability.

MSFT Microsoft $248.52
NVDA Nvidia $162.11
CMG Chipotle $1,238.67
META Meta Platforms $166.63
MAT Mattel $22.3
FIVE Five Below $122.7
VNOM Viper Energy Partners $33.31

Microsoft (MSFT)

Source: Asif Islam / Shutterstock.com

As one of the most powerful companies in the world, Microsoft (NASDAQ:MSFT) makes a case for best stocks to buy under almost any circumstance.

However, fans of the software giant and video-gaming juggernaut will be pleasantly surprised to learn that MSFT ranked tops for Investor’s Business Daily’s 100 Best ESG Companies for 2021.

Microsoft is involved in myriad sustainability and equity protocols so it’s hard to pick just one. However, a hallmark of the company is its willingness to tackle controversial issues, such as racial equity initiatives, with a clear and uncompromising moral compass.

Beyond its community-specific programs, Microsoft also garners praise for efforts to stem the tide of climate change. For example, the company has procured 2.5 million metric tons of carbon removal while saving 1.3 million cubic meters of water through its conservation processes.

Above all, MSFT makes good investment sense as its suite of business software and applications have become especially relevant during the post-pandemic period. Thus, the ESG investing angle is icing on the cake.

Nvidia (NVDA)

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One of the most popular companies for digital entertainment fans, Nvidia (NASDAQ:NVDA) manufactures graphics processing units that power the most data-intensive video games.

As well, its GPU technology has more recently found relevance in the cryptocurrency sector, playing a vital role in mining digital assets. These and other critical catalysts serve the bullish case for NVDA being among the best stocks to buy.

However, the company doesn’t get enough credit for facilitating ESG investing principles. Early this year, Sustainabilitymag.com reported that Nvidia is helping communities fight climate change and natural disasters by leveraging its semiconductor technology to simulate the effects of shifting environmental conditions. Through this, scientists can better understand what protocols would produce the most positive results.

In addition, Nvidia is on the forefront of not only forwarding artificial intelligence and machine learning advancements but also mitigating the potential harm they can create through nefarious actors.

This type of comprehensive thinking is one of the reasons why NVDA is one of the best stocks to buy as a general concept, not just for ESG investing.

Chipotle (CMG)

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As a quick alternative to common fast-food fare, that Chipotle (NYSE:CMG) is one of the ESG investing stocks to buy shouldn’t come as a surprise.

From the get-go, the company’s store profile has always emphasized sustainability principles. And while it’s just my opinion, the food is a lot better (and healthier) than their greasy, salty competitors.

Per its website, Chipotle was one of the first national restaurant brands to commit to goals on local and organic produce. As well, it took the lead in securing animal proteins from sources that were committed to the highest welfare standards.

Earlier this year, Nation’s Restaurant News reported that Chipotle will increase executive bonuses tied to ESG investing goals. For fiscal 2022, up to 15% of officers’ annual incentive bonus is based on CMG’s progress toward reaching certain ESG targets. For context, in the prior year, 10% of the bonus was tied to ESG-related initiatives.

Meta Platforms (META)

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A frequent target of severe criticisms — many of which are not entirely undeserved — Meta Platforms (NASDAQ:META) doesn’t immediately come to mind as one of the best stocks to buy for ESG investing.

While the company’s Facebook network has become the undisputed social media platform for sheer user volume, this kind of power has led many to be concerned about online privacy and the overreaches of big tech.

Nevertheless, it’s important to point out that Meta is also a strong contributor to various sustainability and equity protocols. For instance, the company seeks to forge solutions regarding climate change, beginning with its own efforts to reduce its environmental footprint. Further, Meta aims to achieve net zero emissions for its value chain by 2030.

In addition, the company is also focused on social equity in terms of internet access. By providing connectivity solutions to historically disenfranchised communities, Meta can more effectively narrow wealth disparity issues.

Mattel (MAT)

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As a toy manufacturer, Mattel (NASDAQ:MAT) presents an interesting case as one of the best stocks to buy. Not to get too graphic but the disruption of the coronavirus pandemic has resulted in pent-up demand for certain consumer segments; hence the terms retail revenge or revenge travel.

But there are other things that have also gone wanting but unfulfilled. I guess you might call this revenge intimacy. From there, you have kids and subsequently, increased demand for MAT stock.

However, Mattel is also one of the best ideas for ESG investing. Among the company’s core pillars is sustainable design and development, which should go a long way toward not only responsible manufacturing but also in normalizing this mindset for future generations.

Obviously, children are very impressionable. Therefore, starting the discussion early about sustainability principles makes Mattel one of the feel-good stories of the year.

Five Below (FIVE)

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In my opinion, Five Below (NASDAQ:FIVE) is one of the best stocks to buy for speculators. Yes, I’ll readily admit that the company’s 36% loss on a YTD basis doesn’t exactly generate the most confidence.

However, its discount-retailer business model — where most of its stores’ products are priced below $5 – makes it an excellent choice for surviving a recession.

I’d go so far as to say the business itself caters to ESG investing. Unlike pure discount dollar stores which have a rough ambiance to them, Five Below features quality products that make for excellent bargain hunting, irrespective of your income level.

Nevertheless, the company is no slouch with its direct ESG programs. Specifically, the company is focused on gender equity, gaining high marks among women employees for office culture, environment and outlook. In addition, Five Below is among the top 20% of companies listed on Comparably.com for diversity.

Viper Energy Partners (VNOM)

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Before you start questioning my sanity for including Viper Energy Partners (NASDAQ:VNOM), just hear me out for a second. I completely understand that oil and natural gas-related companies typically don’t rank highly for ESG investing. However, we can’t deny that on a performance basis, VNOM is one of the best stocks to buy.

Since the start of the year, the equity unit has skyrocketed 54%. When you consider that the benchmark S&P 500 index is down 16% YTD, it’s hard not to look at these gains and wonder if you can cheat up a little.

Well, with VNOM, you might be able to keep your ESG investing cred and enjoy the outstanding riches that the hydrocarbon sector has to offer. You see, Viper Energy ranks as a low risk when it comes to sustainability, at least according to Morningstar.com.

Does being less bad than the competition make for an ESG stock? Maybe, maybe not – I’m just throwing the idea out there!

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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