Nvidia, a Semiconductor and Computer Hardware company, is on the cutting edge for its technology, a leader in artificial intelligence, but also an ESG leader. ESG (Environmental, Social and Governance) investing refers to a class of investing that is also known as “sustainable investing.” This is an umbrella term for investments that seek positive returns and long-term impact on society, environment and the performance of the business.
When we talk about ESG investing the most simple explanation is utilizing these additional evaluation criteria to select companies worth investing in. Not only has Nividia killed it with earnings and revenue surge – doubling its share price this year – but they were recently named the top ESG company by Investors Business Daily. You can see the full list of the 50 best companies HERE.
These companies were ranked on their leadership in managing ESG risks. This is an (interesting) measurement for ranking companies based on ESG risks. A large part of investing successfully is reducing risk. Forward thinking companies who put in place policies to address ESG issues avoid big mistakes . . . corporate ethics, lawsuits, oil spills, PR nightmares.
The article from Investors Business Daily about Nvidia says:
"Companies with high ESG scores tend to carry less risk of economic loss for lagging on issues that matter to people today. From carbon footprint to #MeToo and boardroom diversity to executive compensation, companies are being held to higher ESG standards by investors, activists and politicians.
As an ESG investing leader, Nvidia does especially well on human capital development, according to MSCI (MSCI). Its staff-focused initiatives include professional development courses, tuition reimbursement, a career services program, an employee stock purchase plan and partnerships with organizations to build a talent pipeline."
More companies like Nvidia are on the rise and ESG Investing is thriving.
Jack Schniepp is a CERTIFIED FINANCIAL PLANNER™ (CFP®, ChFC®) , financial advisor and the owner of Cascade Financial Strategies. CFS is a registered investment advisor licensed in Oregon, California, Washington, Arizona and Idaho. They specialize in socially responsible investing which integrates environmental, social, and corporate governance (ESG) criteria into portfolio construction.