Sustainable stocks are an important part of impact investing. Many people still are reluctant to enter the stock market, though. Despite the historical growth of the German stock index by 9% per year on average, only 12% of people in Germany are known to own stocks or equity funds. In contrast, the percentage of stock owners in the USA is around 50%.
People are, however, becoming more and more interested in sustainable investments and are discovering green stocks and sustainable equity funds, which have both increased in number in recent years. Unfortunately, though, the proliferation of unregulated investment products makes it relatively difficult to distinguish truly sustainable investment opportunities from those that are merely a product of “greenwashing”.
Investing in sustainable stocks with potential
If you would like to make ethical investments on the stock market, you have two options: you can either buy sustainable stocks directly, or you can invest in a basket of such companies via sustainable equity funds, although it is often questionable how sustainable these funds actually are.
Let’s look at the term itself. At Inyova, we define “sustainable stocks” as shares in companies that have a positive ecological handprint and footprint. By a positive handprint, we mean a company offering sustainable products and services. The footprint, on the other hand, describes the operational impact of a company, that is, how environmentally friendly the company produces its products and how fairly its employees are treated.
Those seeking to invest in sustainable stocks will find a wide variety of such companies on the international stock exchanges, operating in areas such as water purification, renewable energy and recycling, among other things.
List: 12 sustainable stocks to make an investment in 2021
We have compiled a comprehensive list of interesting sustainable stocks for you. For each company, the list will give you information about the industrial sectors within which it operates as well as its contribution to sustainability.
| Company | Industry | Location | Notes | |||
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| Nel ASA | The hydrogen sector | Oslo, Norway | Nel ASA’s solutions allow production, storage and distribution of hydrogen with the help of electrical energy. With 310 employees, the company is already part of a diverse range of collaborations. For example, they collaborate with Nikola Motor Company, to construct a network of hydrogen fuelling stations in the US and with Hyundai Motor Company on its location in Switzerland.
A new partnership has also been secured with Mitsubishi Group, which will see 20 hydrogen fuelling stations built in Norway. Further projects include the development of fuel-cell-powered ships as well as H2Bus Consortium’s plans to produce and further develop the deployment of hydrogen buses in Europe. Going by the slogan “Empower Generations with Clean Energy Forever”, the company has committed to the fulfilment of the United Nations’ (UN) Sustainable Development Goals (SDGs). |
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| Stora Enso Oyj | Renewable solutions for packaging | Helsinki, Finland | Stora Enso is not only the second largest global supplier of wood-based building solutions with branches in 50 countries, but it is also one of the biggest paper producers in the world with over 50,000 employees.
The company also specialises in the development of wood products for sustainable living. Among other solutions, solid wood products, wood cladding as well as ceiling panelling and building concepts form part of its product range. In terms of sustainability, Stora Enso has adopted the UN’s SDGs for environmental protection, sustainable production as well as the protection of land ecosystems, holding them in the highest possible regard. |
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| Tomra Systems ASA | Recycling | Asker, Norway | Tomra Systems is the largest producer of sensor-based sorting solutions as well as collection systems.
Its sorting solutions include a range of so-called reverse vending machines, which automatically sort used beverage containers. Tomra Systems is a global market leader in this area with a 75% share of the market. Solutions offered by Tomra are split into three different segments: food, recycling and mining. There are sorting machines that are used for food processing, waste and metal recycling as well as reusable materials. Tomra contributes in many ways to a more sustainable circular economy. For example, upping its resource recovery strategy by 5-10% has allowed Tomra to excel in its efforts to combat food waste. In the mining sector, its sorting machines can save up to 15% of energy used during processing. |
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| Nordex SE | Wind turbines | Hamburg, Germany | Nordex SE has been active as a manufacturer of on-shore wind turbines since 1985 and is among the pioneers of the wind power industry. An important milestone for Nordex SE was the development of the world’s first megawatt system (the Nordex N54/1000 kW) in 1995.
The company specialises in the production of low-wind turbines that are used on low-wind sites to effectively generate electricity. Alongside its core business, namely the production and maintenance of wind turbine facilities, Nordex also acts as a project developer for wind farms. Nordex has production sites in Germany, China and the US as well as branches in 19 countries in Europe, North and South America as well as Asia and Africa. With its 6,500 employees and USD 3.28 billion revenue, the company is among the most prominent in the industry, and its wind turbines have a wind power capacity of more than 28 GW worldwide. |
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| Sunrun Inc. | Solar panels | San Francisco, US | Sunrun is America’s largest producer of solar panels and retailer of solar battery systems for its customers’ homes. It services and markets exclusively to end customers (B2C), whose homes are powered solely by solar energy — as the name aptly suggests!
Sunrun’s business model gives customers the option to lease their solar panels or to buy electricity directly through a power purchase agreement. The installation, surveillance and management of the solar panels are all included as part of the service. In 2019, a total of 3.7 million tonnes of CO2 were saved as a result of solar panels installed by Sunrun for over 240,000 customers. As the slogan “Power Through” suggests, Sunrun plans to achieve not only more sustainable electricity production but also energy self-sufficiency for individual households. Sunrun is the main distributor of the Tesla Powerwall solar battery storage system. It currently operates in 23 states but there are no known plans to date to enter the European market. |
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| Ørsted A/S | Wind power and solar panels | Fredericia, Denmark | Ørsted is a Danish producer of green energy solutions with a range of both wind power and solar power facilities as well as energy storage solutions. The company is also the world market leader in offshore wind in terms of turnover.
Ørsted has been nominated the most sustainable company in the world three times in a row. With 6,500 employees and an annual revenue of EUR 9.1 billion, Ørsted operates in the US, the Netherlands and Taiwan. Ørsted also runs several biomass power plants in Europe and sells its electricity to industrial customers mainly in the UK, Denmark and Germany through its Markets & Bioenergy division. Ørsted intends to have achieved its goal of becoming completely carbon neutral by 2025. |
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| CanadianSolar Inc. | Solar panels | Guelph, Canada | CanadianSolar Inc. is a Canadian manufacturer of solar and photovoltaic products with over 13,500 employees and an annual revenue of USD 3.2 billion, making it a North American industry leader.
Alongside a strong presence on the market in Canada and South East Asia, the company also operates in 20 countries across 6 different continents. The production of the solar panels takes place in China. The company’s largest assets include over 1,500 approved patents worldwide as well as its R&D department consisting of over 500 employees. Up until now, modules with a total production capacity of 52 GW have been delivered to end customers in over 150 countries, which means that a total of 32 million households were able to cover their energy requirements for a whole year. |
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| Plug Power Inc. | The hydrogen sector | Latham, New York | Plug Power Inc. manufactures fuel cells that are used in the fields of electromobility, transport and emergency power generators. It also supplies hydrogen as well as hydrogen storage units to large industrial clients. Currently, it is working with its project partners on manufacturing hydrogen fuelling stations.
The company currently has 830 employees and generated a total revenue of USD 230 million in 2019. After hydrogen stocks boomed in 2020, the share price is currently viewed as overvalued. |
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| Xylem Inc. | Water purification | Rye Brook, New York | Xylem manufactures water purification units and devices for waste water analysis. It is among the largest manufacturers of water pumps worldwide and boasts an extensive brand portfolio (e.g. Lowara, Wedeco).
Currently, Xylem employs 16,200 people and operates in more than 40 countries. Its products are sold in over 150 countries worldwide. Half of its annual revenue of USD 5.25 billion (2019) comes from power plants and production sites, with 35% being generated from large industrial clients. Its contribution to sustainability is mainly rooted in finding ways to use and process water, our most precious resource, more efficiently. According to UNICEF, one in three people on the planet do not have access to safe drinking water. |
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| Rockwool International A/S | Construction materials | Copenhagen, Denmark | ROCKWOOL Group, a Danish company, is a market leader when it comes to rock wool solutions that are used for building insulation as well as industrial and technical insulation in the process industry.
Rockwool’s innovative materials help to reduce CO2 emissions in buildings and on production sites. It currently operates in a total of 38 countries in Europe, North America and Asia. Rockwool has adopted ten of the 17 SDGs outlined by the United Nations. Its approach to sustaining a circular economy can be seen in its usage of recycled waste for raw materials as well as internal recycling procedures for waste materials arising from production. |
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| Tesla Inc. | Electromobility | Palo Alto, California | Tesla was founded by engineers who wanted to bring about the future of sustainable mobility. With elegant and innovative vehicles, Tesla wants to put an end to fossil-fuel-powered cars and make way for a new era of electromobility.
Tesla stocks rose hugely in 2020, leading to the assumption that they may be overvalued. However, Tesla is indisputably the epitome of electromobility. |
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| NIBE Industrier AB | Sustainable energy solutions | Markaryd, Sweden | NIBE produces heat pumps (NIBE Climate Solutions), intelligent heating solutions (NIBE Element) and stoves (NIBE Stoves). Its range of NIBE Climate Solutions spans exhaust air, brine and air/water heat pumps for homes as well as industrial application.
NIBE products can be installed either as part of new constructions or when swapping out old heating systems. The efficient heat recovery of NIBE’s ventilation systems helps to save energy when heating homes, ultimately leading to less overall energy consumption and pollutant emissions. |
Where and how do I invest sustainably?
Which stocks you want to invest in is ultimately your decision, and one to be made alone. But don’t forget to follow the golden rules of investing when making your decision.
Firstly, don’t put all your eggs in one basket. In other words, diversify. Don’t invest in just one or two different stocks, but rather invest in several stocks across different sectors, countries, currencies etc. Secondly, consider investing regularly in smaller chunks rather than making one large investment. This strategy, also known as cost averaging, might help you spread the risk when purchasing stocks.
Inyova’s savings plan is a great way to implement this strategy. It allows you to automatically invest a specified amount in sustainable stocks every month and build a broadly diversified investment portfolio. Sounds interesting? Create your free, personalised impact investing strategy here.
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