Podcast: Top 2025 ESG Stock and Fund Picks
Top 2025 ESG Stock and Fund Picks. Include renewable energy, infrastructure, and small-cap stocks. Plus, climate fund picks and more!
Transcript & Links, Episode 145, January 10, 2025
I hope everyone enjoyed the holidays and sincerely wish you a happy, healthy, and prosperous 2025!
My name is Ron Robins and I welcome you to my podcast episode 145 published January 10, 2025, titled “Top 2025 ESG Stock and Fund Picks.” It’s presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing mentoring, news, commentary, information, and resources.
Remember that you can find a full transcript and links to content – including stock symbols and bonus material – on this episode’s podcast page at investingforthesoul.com/podcasts.
Also, a reminder. I do not evaluate any of the stocks or funds mentioned in these podcasts, and I don’t receive any compensation from anyone covered in these podcasts. Furthermore, I will reveal any investments I have in the investments mentioned herein.
Additionally, quotes about individual companies are brief. Please go to this podcast’s webpage for links to the articles and more company and stock information.
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Top 2025 ESG Stock and Fund Picks (1)
Now most ethical and sustainable investors have socially responsible investment funds. This is a good review article of the best ones for US residents. It’s titled Best ESG ETFs: Top funds for socially responsible investing. It’s by Brian Baker and found on msn.com. Here is some of what he has to say.
“1. Vanguard ESG U.S. Stock ETF (ESGV)
tries to match the performance of the FTSE U.S. All Cap Choice Index and screens for certain ESG criteria. Certain companies in the following industries are excluded from the fund: adult entertainment, alcohol, fossil fuels, gambling, nuclear power, tobacco and weapons.
- 5-year return (annualized): 15.7 percent
- Expense ratio: 0.09 percent
2. iShares Global Clean Energy ETF (ICLN)
seeks to track the performance of an index of global stocks from the clean energy sector.
- 5-year return (annualized): 7.3 percent
- Expense ratio: 0.41 percent
3. iShares ESG MSCI USA Leaders ETF (SUSL)
gives investors exposure to large- and mid-cap stocks that score highly on ESG issues relative to their sector peers.
- 5-year return (annualized): 9.7 percent
- Expense ratio: 0.49 percent
4. iShares ESG Aware MSCI USA ETF (ESGU)
tracks the results of an index of U.S. companies with ESG features that show a similar risk and return profile as the overall MSCI USA Index.
- 5-year return (annualized): 15.7 percent
- Expense ratio: 0.15 percent”
End quotes.
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Top 2025 ESG Stock and Fund Picks (2)
This next article arises from some new original research. It’s titled Top Stocks Widely Owned by Small-Cap ESG Funds by Frances Aufderheide and can be seen on morningstar.com.
Now a few quotes from the article.
“In the United States, small-cap stocks range from a market cap of $2.9 billion to $11.2 billion, which will be the focus of this exercise. [Learn more about Morningstar Categories by downloading the US Fund Category methodology paper.]
We compiled the holdings of the oldest share classes of all US sustainable small-cap funds. Next, we put the top 200 stocks that are commonly owned in a theoretical portfolio. Then, we calculated what the average weight of each security would be if this portfolio held all 200 stocks. We did the same with traditional funds, defining the universe as the oldest share class of small-cap funds, excluding sustainable funds.
We found five stocks owned exclusively by small-cap sustainable funds.
Source: Morningstar Direct. Weights and Data as of Dec. 3, 2024.
1. Aptar Group (ATR)
Morningstar ESG Risk Rating Assessment: Negligible
Total Return Year-to-Date (Month-End): 41.30
Price/Fair Value: 1.05
Moat: Narrow
‘The company specializes in various drug dispensing solutions including nasal spray inhalers and elastomer components for injectable drugs, high-end fragrance pumps, and food dispensing closures.’
‘We think the firm’s outlook is strong from a longer-term perspective…’ —Jay Lee, Morningstar Senior Equity Analyst
‘The company’s carbon footprint is affected by the nature of its operations and the source of energy used to power these operations.’ —Morningstar Sustainalytics
2. Wyndham Hotels & Resorts (WH)
Morningstar ESG Risk Rating Assessment: Medium
Total Return Year-to-Date (Month-End): 23.52
Price/Fair Value: 1.05
Moat: Narrow
‘We believe Wyndham’s moat is illustrated by its enduring unit growth demand from third-party owners, guest satisfaction ranking of its brands, room and loyalty scale, and contract length of franchisee relationships.’ —Dan Wasiolek, Morningstar Senior Equity Analyst
‘To maintain its ongoing operations, the company uses large quantities of water. Increasingly stringent carbon regulations and energy efficiency requirements could lead to higher energy prices, larger associated costs for the company and compliance issues.’ —Morningstar Sustainalytics
3. Clearway Energy (CWEN)
Morningstar ESG Risk Rating Assessment: Severe
Total Return Year-to-Date (Month-End): 12.00
‘Clearway Energy Inc is a publicly-traded energy infrastructure investor with a focus on investments in clean energy and owner of modern, sustainable and long-term contracted assets across North America…’
‘Although the company provides some ESG disclosure, its overall ESG reporting is not in accordance with leading reporting standards’ —Morningstar Sustainalytics
4. Commerce Bancshares (CBSH)
Morningstar ESG Risk Rating Assessment: Medium
Total Return Year-to-Date (Month-End): 39.60
Moat: Narrow
‘Commerce Bancshares Inc., is a $22 billion regional bank that provides a diversified line of financial services, including business and personal banking, wealth management, financial planning, and investments through its affiliated companies.’
‘The company’s product and service portfolio, as well as its customer base triggers exposure to quality and safety issues.’ —Morningstar Sustainalytics
5. Darling Ingredients (DAR)
Morningstar ESG Risk Rating Assessment: Low
Total Return Year-to-Date (Month-End): (18.68)
‘Darling Ingredients Inc develops and manufactures sustainable ingredients for customers in the pharmaceutical, food, pet food, fuel, and fertilizer industries.
“Growing consumer demand for healthier and more environmentally friendly foods, including low-fat and plant-based proteins, exposes Darling to potential customer loss should it fail to adapt its portfolio to this trend.’ —Morningstar Sustainalytics.”
End quotes.
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Top 2025 ESG Stock and Fund Picks (3)
This next article is written by an analyst we have repeatedly featured on this podcast. Her name is Aparajita Dutta, and she hails from Zacks. The article is titled 3 Renewable Energy Stocks Poised for Explosive Growth in 2025. Here are some quotes by Ms. Dutta on each of her picks.
“These stocks, with a favorable Zacks Rank #2 (Buy), have gained more than 25% so far this year… these can be expected to continue their rally in 2025 as well…
1. Constellation Energy (CEG)
this company delivers electric power, natural gas, and energy management services across the United States. It is the lowest carbon emitter among major investor-owned U.S. generators…
The Zacks Consensus Estimate for Constellation Energy’s 2025 earnings implies a 10% improvement from the prior year’s estimated earnings. The stock has gained 96.6% in the year-to-date period, while its current average price target has an upside of 23.7% from its last closing price. Free Stock Analysis Report.
2. Excelerate Energy (EE)
Excelerate Energy is a provider of floating liquefied natural gas (LNG) terminals…
The Zacks Consensus Estimate for Excelerate Energy’s 2025 earnings implies a 19.1% improvement from the prior year’s estimated earnings, while that for its 2025 sales reflects a 25.8% increase. The stock has gained 97.6% in the year-to-date period. Free Stock Analysis Report.
3. Gevo (GEVO)
Gevo is a renewable chemicals and advanced biofuels company engaged in the development of biobased alternatives to petroleum-based products…
The Zacks Consensus Estimate for GEVO’s 2025 sales implies a 101.5% improvement from the prior year’s estimated earnings. The stock has gained 30.1% in the year-to-date period, while its current average price target has an upside of 296% from its last closing price. Free Stock Analysis Report”
End quotes.
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Top 2025 ESG Stock and Fund Picks (4)
This next article features some well-known ESG stocks. It’s titled 3 ESG Stocks That Align Profits With Purpose. It was written by Rjkumari Saxena and was seen on stocknews.com. Here is some of what Ms. Saxena has to say in her article.
“1. Salesforce, Inc. (CRM – Get Rating)
provides Customer Relationship Management technology that brings companies and customers together worldwide. Its service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices…
Salesforce, Inc.’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
2. Adobe Inc. (ADBE – Get Rating)
operates as a diversified software company globally. It operates in three segments: Digital Media; Digital Experience; and Publishing and Advertising. The company offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content, and Document Cloud, a unified cloud-based document services platform…
Shares of Adobe have plunged 13.7% over the past month to close the last trading session at $446.74.
Adobe’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of A, which translates to a Strong Buy.
3. NextEra Energy, Inc. (NEE – Get Rating)
generates, transmits, distributes, and sells electric power to retail and wholesale customers. It generates electricity through wind, solar, nuclear, natural gas, and other clean energy…
NextEra Energy has raised its dividends for 29 consecutive years…
Over the past year, the stock has gained 20.4% to close the last trading session at $72.49.
NextEra Energy’s POWR Ratings reflect its bright prospects.”
End quotes
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Top 2025 ESG Stock and Fund Picks (5)
Now infrastructure stocks are often overlooked by ethical and sustainable investors. However, they are worth looking at. See this article titled Meet the High-Performing Infrastructure Stock That’s Crucial to Supporting This Massive $3 Trillion Megatrend. By Matt DiLallo, found on fool.com.
Here are some quotes from the article.
“One company that is absolutely critical to building this infrastructure is Quanta Services (NYSE: PWR). It’s the industry leader in providing specialized infrastructure solutions…
Quanta Services provides specialized infrastructure solutions to the utilities, renewable energy, technology, communications, pipeline, and energy industries. Its client list is a who’s who of industry leaders in those respective sectors…
Increasing infrastructure investment is driving strong growth for Quanta Services this year. It delivered another quarter of double-digit growth in the third quarter. Its revenue rose from $5.6 billion to $6.5 billion, while its adjusted earnings increased from $2.24 per share to $2.72. It also generated $539.5 million in cash flow, pushing its year-to-date total to nearly $1.4 billion (with almost $980 million in free cash). That strong performance has helped drive a more than 50% increase in its stock price this year.”
End quotes
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Additional articles not covered due to time constraints
1. Title: 4 Alternative Energy Stocks To Buy Amid Rising Raw Materials Cost on barchart.com. By Zacks Investment Research, Inc.
2. Title: Analyst Sees 500% Upside for This Clean Technology Penny Stock on finance.yahoo.com. By Nauman khan.
3. Title: Top 5 Fastest Growing Solar Energy Stocks to Watch Out for in 2025 on equitymaster.com. By staff.
4. Title: The Shocking Rise in Enphase Energy Stock! What Investors Need to Know Now! on jomfruland.net. By Paquita Cicero.
5. Title: Why Aptiv PLC (APTV) Is One of the Best Environmental Stocks to Invest in Right Now? On msn.com. By Mashaid Ahmed.
6. Title: Why Array Technologies (ARRY) Is Among the Best Renewable Energy Stocks to Buy? On finance.yahoo.com. By Mashaid Ahmed.
7. Title: Nike a Top Socially Responsible Dividend Stock With 2.2% Yield (NKE) on nasdaq.com. By BNK Invest.
8. Title: AAPL: 3 ESG Stocks for Ethical and Profitable Investing in 2025 on stocknews.com. By Rjkumari Saxena.
9. Title: USCL, USCA, and NZUS: 3 Climate ETFs Beating the Market on marketbeat.com. Written by Nathan Reiff, Reviewed by Shannon Tokheim.
10. Title: 3 Renewable Energy Stocks to Buy in 2025 and Hold for Decades on fool.com. By James Brumley.
Articles of Interest from Around the World
1. India. Title: Top 5 Fastest Growing Solar Energy Stocks to Watch Out for in 2025 on equitymaster.com. By staff.
2. Australia. Title: Which 3 ethical ASX ETFs performed the best in 2024? On fool.com.au. By Aaron Bell.
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Ending Comment
These are my top news stories with their stock and fund tips for this podcast “Top 2025 ESG Stock and Fund Picks.”
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Thank you for listening.
I’ll talk to you next January 24th.
Bye for now.
© 2025 Ron Robins, Investing for the Soul
