ESG deals with an array of environmental, social and governance criteria to measure companies. Consumers, institutional investors and pension funds who are interested in making a positive impact on the world around them can use this criteria to rate companies for long-term sustainability.
With investors increasingly interested in ensuring they make a positive impact, the Investment Association estimates that ESG inflows were much higher in 2020 than in previous years. There were net flows of £7.1bn between January and September 2020, 275% more than the £1.9bn measured during this time period in 2019.
To help those looking to make more sustainable choices, DailyFX has produced research showing the companies that have both a significant sustainable impact and are considered strong dividend investments. It analyses companies within the FTSE 100, S&P 500 and ASX 200 to reveal what investments perform well in both ESG performance and dividend yields.
Companies have different incentives to invest in sustainability, ranging from potentially higher stock price, first mover advantage and synergies in their underlying business model. For an investor, these factors can present opportunities in addition to the broader benefit of promoting environmentally conscious behaviour.
Some socially responsible investors rule out investments in entire industries based on moral values. Our report considers ways in which environmental risks and opportunities (such as pollution control technologies mitigating climate change) have material impacts on companies’ performance and overall investment record.
Coca Cola Ranks as the Best Company in the FTSE 100 to Invest in for Sustainable Impact
| Rank | Company | Ticker | S&P ESG Score | Dividend Yield | Revenue (£ Million) | Stock Price (USD) |
|---|---|---|---|---|---|---|
| 1 | Coca Cola HBC | CCH | 92 | 2.19% | $16.7m | $3,459.71 |
| 2 | Coca Cola HBC AG | CCH | 92 | 2.19% | $16.7m | $3,459.71 |
| 3 | Unilever | ULVR | 89 | 3.51% | $80.1m | $5,680.93 |
| 4 | Diageo | DGE | 87 | 2.12% | $94.9m | $4,480.67 |
| 5 | Burberry Group | BRBY | 87 | 0.00% | $10.9m | $2,874.52 |
| 6 | British American Tobacco | BATS | 85 | 7.86% | $70.7m | $3,759.26 |
| 7 | AstraZeneca | AZN | 81 | 2.64% | $161.5m | $10,552.88 |
| 8 | United Utilities Group | UU. | 79 | 4.42% | $18.4m | $1,317.44 |
| 9 | RELX | REL | 78 | 2.42% | $29.3m | $2,693.13 |
| 10 | Barclays | BARC | 77 | 0.55% | $90.6m | $257.09 |
| 11 | Polymetal International | POLY | 77 | 5.70% | $15.9m | $2,216.36 |
| 12 | Rolls-Royce Holdings | RR. | 74 | 0.00% | $39.4m | $145.48 |
| 13 | Informa | INF | 74 | 0.00% | $18m | $792.02 |
| 14 | Standard Life Aberdeen | SLA | 74 | 5.33% | $12.4m | $383.08 |
| 15 | InterContinental Hotels Group | IHG | 72 | 0.00% | $15.6m | $7,297.50 |
| 16 | Antofagasta | ANTO | 71 | 2.19% | $22.5m | $2,667.41 |
| 17 | Johnson Matthey | JMAT | 69 | 1.57% | $10.3m | $4,582.83 |
| 18 | Rio Tinto | RIO | 68 | 5.58% | $122.8m | $8,605.49 |
| 19 | Royal Dutch Shell A | RDSA | 68 | 3.46% | $47.8m | $1,900.69 |
| 20 | Standard Chartered | STAN | 68 | 1.36% | $26.2m | $667.48 |
| 21 | Taylor Wimpey | TW. | 67 | 2.24% | $12.8m | $255.00 |
| 22 | International Consolidated Airlines | IAG | 65 | 0.00% | $51.9m | $283.56 |
| 23 | Rentokil Initial | RTO | 65 | 1.07% | $14.6m | $708.62 |
| 24 | BAE Systems | BA. | 64 | 4.74% | $35.8m | $687.63 |
| 25 | Smith & Nephew | SN. | 64 | 1.81% | $30.9m | $2,057.20 |
The multi-national beverage company Coca Cola holds the top two spots for having the biggest sustainable impact as ranked by S&P ESG. The brand has an ESG score of 92 out of 100, three more points than its closest competitor Unilever.
With the company’s dividend yield of 2.19%, investors can benefit from both its levels of pay outs as well as its sustainable impact. In comparison to the top 25 companies for ESG score, Coca Cola has a higher stock price per share too, currently sitting at $3,459.71.
Coca Cola’s sustainability manifesto claims that the company replenishes the water it uses, recycles a bottle for every one sold and is committed to reducing its plastic use by 10,000 tonnes every year.
If dividend yield is a priority for you as an investor, British American Tobacco, the largest tobacco company in the world based on net sales, offered a 7.86% yield during its previous pay out - a stand out figure from the top 25 companies. What’s more, the company has pledged that by 2050 it will aim for 100% of its plastic packaging to be reusable, recyclable or compostable. By 2025, the company is also aiming to reduce the total amount of water used by 35%.
HPE Ranks as the Best Company in the S&P 500 for Sustainable Impact
| Rank | Company | Ticker | S&P ESG Score | Dividend Yield | Revenue ($ Billion) | Stock Price (USD) |
|---|---|---|---|---|---|---|
| 1 | Hewlett Packard Enterprise | HPE | 91 | 2.92% | $27bn | $16.46 |
| 2 | HP Inc. | HPQ | 88 | 2.25% | $56.6bn | $34.62 |
| 3 | Abbott Laboratories | ABT | 86 | 1.46% | $34.6bn | $122.30 |
| 4 | Stanley Black & Decker | SWK | 86 | 1.34% | $14.5bn | $206.48 |
| 5 | Biogen Inc. | BIIB | 85 | 0.00% | $13.4bn | $267.75 |
| 6 | Newmont Corporation | NEM | 85 | 3.35% | $11.5bn | $65.41 |
| 7 | AES Corp | AES | 82 | 2.13% | $9.7bn | $28.21 |
| 8 | Entergy Corp. | ETR | 82 | 3.56% | $10.1bn | $106.75 |
| 9 | Hilton Worldwide Holdings Inc | HLT | 82 | 0.00% | $4.3bn | $127.52 |
| 10 | AbbVie Inc. | ABBV | 81 | 4.67% | $45.8bn | $111.48 |
| 11 | Colgate-Palmolive | CL | 81 | 2.26% | $16.4bn | $79.11 |
| 12 | Waste Management Inc. | WM | 80 | 1.70% | $15.2bn | $133.93 |
| 13 | Cigna | CI | 79 | 1.59% | $160.4bn | $252.75 |
| 14 | Cisco Systems | CSCO | 79 | 2.85% | $49.3bn | $51.69 |
| 15 | General Motors | GM | 79 | 0.00% | $122.5bn | $58.33 |
| 16 | Linde plc | LIN | 79 | 1.45% | $27.2bn | $290.46 |
| 17 | Mondelez International | MDLZ | 79 | 2.12% | $26.6bn | $59.01 |
| 18 | Caterpillar Inc. | CAT | 78 | 1.79% | $41.7bn | $230.65 |
| 19 | Sempra Energy | SRE | 78 | 3.21% | $11.4bn | $136.49 |
| 20 | Ventas Inc | VTR | 78 | 3.29% | $3.8bn | $55.61 |
| 21 | CVS Health | CVS | 77 | 2.63% | $268.7bn | $76.18 |
| 22 | Dow Inc. | DOW | 77 | 4.51% | $38.5bn | $62.31 |
| 23 | Duke Energy | DUK | 77 | 3.87% | $23.9bn | $99.34 |
| 24 | Ecolab Inc. | ECL | 77 | 0.85% | $11.8bn | $227.61 |
| 25 | Bank of America Corp | BAC | 76 | 1.84% | $93.7bn | $39.73 |
For investors focused on the S&P 500 stock index, Hewlett Packard Enterprise, or HPE, tops the ranking for sustainable impact. Not only that, with a current stock price of just $16.46, HPE, which sells servers, storage, security and related corporate services, ranks highest for both dividend yield and ESG score.
Its current ESG score sits at 91 out of 100, ranking it second in total across the three stock markets studied. In the previous two years, the company has reduced its carbon footprint from operations by 47% and pledges to transition to the world’s leading edge-to-cloud platform-as-a-service company by 2022. HPE claims to have helped implement technology to reduce energy consumption in high-performance computing and has facilitated a 47% reduction in carbon footprint across its operations since 2016, according to company reports.
With a 2.92% dividend yield, HPE ranks among leading dividend stocks, according to our research.
Other noticeable companies in the top 25 are HP, Cigna and General Motors, led by CEO Mary Barra. Scoring above 79 in ESG scores on average, these are companies are making decisions to shape a sustainable future. In the past decade, General Motors reports a reduction in absolute energy use by 23%, a reduction in absolute emissions by 35% and a 31% reduction in waste intensity.
Dexus Property Ranks as the Best Company in the ASX 200 for Sustainable Impact and Dividend Yield
| Rank | Company | Ticker | S&P ESG Score | Dividend Yield | Revenue (US$ Million) | Stock Price (USD) |
|---|---|---|---|---|---|---|
| 1 | Dexus Property | DXS | 89 | 5.18% | $14m | $7.84 |
| 2 | Stockland | SGP | 86 | 4.73% | $10.2m | $3.61 |
| 3 | Australia & New Zealand Banking Group Ltd | ANZ | 85 | 2.09% | $62.1m | $22.38 |
| 4 | Vicinity Centres | VCX | 79 | 2.11% | $10.2m | $1.26 |
| 5 | Transurban Group | TCL | 77 | 1.13% | $32.3m | $11.03 |
| 6 | Woodside Petroleum Limited | WPL | 77 | 2.27% | $30.6m | $17.72 |
| 7 | Fortescue Metals Group Ltd | FMG | 76 | 10.88% | $154m | $17.71 |
| 8 | Westpac Banking Corporation | WBC | 75 | 1.24% | $77.6m | $19.56 |
| 9 | Sydney Airport | SYD | 74 | N/A | $14.8m | $4.82 |
| 10 | Commonwealth Bank of Australia | CBA | 73 | 2.78% | $86.6m | $69.46 |
| 11 | Tabcorp Holdings Ltd | TAH | 73 | 1.56% | $7.4m | $3.74 |
| 12 | Brambles Limited | BXB | 72 | 2.45% | $25m | $8.17 |
| 13 | Amcor Limited | AMCR | 71 | 4.36% | $37m | $11.74 |
| 14 | Amcor Plc | AMC | 71 | 4.36% | $37m | $11.72 |
| 15 | Cimic Group Ltd | CIM | 71 | N/A | $5.4m | $13.96 |
| 16 | QBE Insurance Group Ltd | QBE | 70 | 0.43% | $24.9m | $7.29 |
| 17 | Incitec Pivot Limited | IPL | 69 | N/A | $7.9m | $2.06 |
| 18 | Suncorp Group Ltd | SUN | 69 | 3.47% | $8.7m | $8.10 |
| 19 | Rio Tinto Limited | RIO | 68 | 5.99% | $72.9m | $95.56 |
| 20 | Charter Hall Group | CHC | 67 | 2.64% | $8.1m | $10.85 |
| 21 | Wesfarmers Limited | WES | 67 | 3.30% | $42m | $43.20 |
| 22 | Oil Search Limited | OSH | 66 | 0.17% | $16.6m | $2.93 |
| 23 | Insurance Australia Group Limited | IAG | 65 | 1.49% | $14.9m | $3.67 |
| 24 | Charter Hall Long Wale REIT | CLW | 65 | 5.89% | $3.7m | $3.81 |
| 25 | IGO Ltd | IGO | 64 | 0.70% | $9.1m | $5.60 |
When addressing the Australian ASX 200 stock market two companies in real estate are noteworthy. Our study found that Dexus Property ranks as a leader when it comes to both sustainability and dividend yields. Having 89 out of 100, the Australian real estate giant scores three higher than second placed Stockland, also a major player in Australian residential and commercial property development. In 2020, Dexus Property reported a 50.1% reduction in group office emissions and beyond 2021 plans to source at least 70% of electricity from on-site and off-site renewable sources.
Dexus Property’s sustainability agenda includes contributing to the economic prosperity and sustainable urban development across Australia's key cities, as well as minimising the environmental footprint and environmental risk of its properties.
Stock prices per share for both Dexus Property and Stockland are low, with $7.84 and $3.61 respectfully.
Key takeaways
Our research shows that for both new and experienced investors, investing in certain companies on the FTSE 100, S&P 500 and ASX 200 can have a positive sustainable impact on our world whilst also offering the chance to increase returns.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Methodology & Sources
S&P 500 ESG scores were used to determine the main factor for ranking the companies with the biggest sustainable impact when invested in. To support our study, we looked into the most recent dividends percentage paid out from these companies, along with their 2020 revenue figures and current stock prices. Stock price data taken on 26/04/2021, with the full data set being collected through a date range of 23/04/2021 to 26/04/2021.
- “ESG inflows quadruple in 2020”, Financial Times, November 5th 2020
- “Sustainability Approach”, Dexus
- “How does Coca Cola help the environment?”, Coca Cola Company
- “2020 Living Progress Report”, Hewlett Packard Enterprise
- “The Sustainability Reporting Performance Of The FTSE 100”, EcoAct, September 2020
- “ESG Scores”, S&P Global
- “Dividend Yields – FTSE 100”, Dividend Data
- “Dividend Yield History for AstraZeneca”, Macro Trends
- “ASX200”, Market Index
- “FTSE 100”, London Stock Exchange
- “S&P 500”, Business Insider
