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Environmental, social and governance (ESG) investing is one of the more popular recent investment frameworks. In this type of investment, the standards of a company’s behaviour are analysed alongside its financial standing. There has been a critical emphasis on socially conscience investors.
Many ESG companies have received government subsidies to help them flourish and set a path to a greener future that doesn’t have an immense overreliance on fossil fuels and scarce resources.
The oil industry is still a trillion-dollar behemoth. It has its tentacles in so many aspects of society that it will take a colossal effort to try and pivot environmentally friendly companies into a position where they enjoy the same levels of investment and coverage as oil companies often do. ESG investing has a long way to go, but we will closely inspect some real innovators and shining stars in this industry today.
Our first company may surprise you. PayPal is one of the biggest payment service companies in the world and operates in over 150 countries. This multibillion-dollar company is known for providing a facility for eBay bidders to buy and sell goods via the online marketplace.
In the recent past, it transformed into a mammoth multi-pronged financial company. PayPal is one of the world’s leading ESG companies committed to renewable resources. For a company the size of PayPal, it is not easy to boast the impressive fact that half of the energy that powers their data centres comes from renewable resources.
PayPal has detailed plans to reach net zero within the next 20 years. This may be an optimistic target but given the significant inroads they have already made for ESG investing, they could easily match this figure by 2040, if not sooner.
Given that some of the world’s giant corporations are responsible for a colossal amount of pollution, it is only fair that some of the world’s biggest companies take the necessary steps to reverse some of the damage they have caused.
Although Microsoft is hardly drilling into the Alaskan ice for oil, they have made several commitments to become a company with a prime focus on renewable energy and business longevity.
Much like PayPal, Microsoft is a tech giant with ambitious plans to replenish more water than they consume throughout the corporation and become a carbon-neutral company by the end of this decade.
You may be under the impression that some of the top ESG companies focus solely on the environment. While these companies are making a clear impact, it is essential to remember that it’s the world’s biggest company. Their commitment to making a considerable change to their carbon footprint, where we will see the most effective change in the short term, is key.
As companies such as PayPal and Microsoft operate at the forefront of society and are some of the most visible technology companies in modern society, their influence on others by successfully switching to a greener and renewable future could be enormous.
Alphabet is another company that is one of the world’s most colossal. It is the parent company of the world’s most viewed website and search engine, Google. Throughout 2022, Alphabet has been awarded the distinction of the top ESG company.
They have released some pretty impressive figures, which are as follows:
● Issuing over $5.5bn in sustainability bonds.
● Matching two-thirds of its energy sources across its data centres with renewable energy sources.
● Focussing solely on providing cars that run off renewable electrical energy for their fleet hire business which consists of thousands of vehicles.
It’s easy to see why Alphabet is one of the world’s biggest companies. They are innovative and forward-thinking and never rest on their laurels. Oil is expected to run out within the next half a century, and companies need to ensure they are well-positioned in the market to avoid being wiped out when the inevitable switch towards greener and cleaner energy occurs.
As more of these vast corporations switch to renewable energy resources and influence retail investors to do the same, the whole landscape of investing and how we view renewable resources could improve.
More people are recycling, and with single-use plastics now banned and plenty of electric charging ports popping up around the country, it is clear that this is the start of a movement towards a brighter and greener future. ESG companies will play a massive role in this and will act as a spearhead for other corporations and individuals to place a critical focus on how they can benefit society.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.