In this article, we will take a look at the 11 Best Sustainability Stocks to Invest In.
Sustainable investing, sometimes referred to as Environmental, Social, and Governance (ESG) investing, is essentially the assessment of both a company’s financial performance and its exposure to environmental, social, and governance risks. While frequently described as a catalyst for corporate change, ESG frameworks are increasingly used to evaluate long-term risk, capital allocation discipline, and business sustainability.
That said, capital flows into the space have recently been volatile. Net withdrawals from the broader universe of sustainable mutual funds and ETFs totaled an estimated $27 billion in the fourth quarter of 2025, compared with outflows of about $55 billion in the prior quarter.
Despite near-term volatility, global sustainable fund assets have increased by over sixfold from approximately $600 billion since the close of 2018, underpinning longer-term structural growth of sustainable assets. This growth is credited to increased investor interest in sustainability issues, especially climate change, and to supporting policy, mainly in Europe.
Notably, the Morgan Stanley Sustainability Institute found that 88% of global individual investors are keen on sustainable investing. Among these retail investors, the younger demographic (Gen Z and Millennials) seems most engaged, indicating that sustainability will become an increasingly crucial priority as their financial impact grows.
Our Methodology
For this list, we began by analyzing the Invesco MSCI Sustainable Future ETF (ERTH), which tracks the MSCI Global Environment Select Index. This index offers targeted exposure to six key environmental impact themes, making it a relevant benchmark for screening sustainability-focused stocks. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11. Enlight Renewable Energy Ltd. (NASDAQ:ENLT)
Enlight Renewable Energy Ltd. (NASDAQ:ENLT) ranks among the best sustainability stocks to invest in. With significant growth across all important financial measures, Enlight Renewable Energy Ltd. (NASDAQ:ENLT) reported record-breaking Q4 and full-year 2025 results on February 17.
Revenue and income totaled $152 million, reflecting a 46% increase over Q4 2024. Meanwhile, adjusted EBITDA increased by 51% to $99 million, with net profit jumping 153% to $21 million. Cash flow from operations also increased by 38%, reaching $75 million.
Enlight Renewable Energy Ltd. (NASDAQ:ENLT) recorded $582 million in revenue and profitability for the fiscal year 2025, up 46% from $399 million in the previous year. Net profit exceeded twofold, rising 142% to $161 million, thanks in part to a $80 million boost from the sale of the Sunlight cluster.
Additionally, Enlight Renewable Energy Ltd. (NASDAQ:ENLT) increased its market share in the European storage sector, particularly in Poland and Germany. In that regard, the company acquired Jupiter, a 150 MW + 2,000 MWh project in Germany, which is planned to begin commercial operations in the second half of 2028.
Enlight Renewable Energy Ltd. (NASDAQ:ENLT) is an Israeli company that develops and manages solar and wind power projects. Back in 2021, the Israel-based company acquired Clēnera of Boise, Idaho, to expand into the US market.
10. West Fraser Timber Co. Ltd. (NYSE:WFG)
West Fraser Timber Co. Ltd. (NYSE:WFG) ranks among the best sustainability stocks to invest in. West Fraser Timber Co. Ltd. (NYSE:WFG) presented its fourth-quarter 2025 results on February 12, outlining current challenges in the wood products market while emphasizing its strategic positioning for long-term success. The company posted an adjusted EBITDA loss of $79 million during the quarter, an improvement from the $144 million loss in Q3 2025.
The company has transferred its lumber capacity to regions with reduced duty/tariff risk and fiber prices, with the U.S. South accounting for around 54% of capacity, up from 11% in 2004.
West Fraser’s estimate for 2026 is cautious. with predicted shipments remaining flat to slightly lower than in 2025. The company estimates capital expenditures to fall to $300-350 million in 2026 versus $411 million in 2025, with an emphasis on “operationalizing recent capital projects, supporting productivity, reliability, and growth.”
West Fraser Timber Co. Ltd. (NYSE:WFG) is a diversified wood products company that produces lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals.
9. Badger Meter, Inc. (NYSE:BMI)
Badger Meter, Inc. (NYSE:BMI) ranks among the best sustainability stocks to invest in. On January 29, RBC Capital reduced its price target for Badger Meter, Inc. (NYSE:BMI) to $191 from $229, while retaining an Outperform rating. The downward revision followed Badger Meter’s fourth-quarter 2025 results, which showed a minor operating beat driven by higher gross margins, while its organic growth of about 2% fell short of RBC’s 7% target.
The company’s earnings per share for the quarter stood at $1.14, lower than projected. Meanwhile, revenue for the quarter came in at $220.7 million, less than the expected $231.98 million.
According to RBC, the share decrease following the earnings announcement was driven by market concerns about management’s estimate for a second-half-weighted 2026 based on the AMI project schedule.
RBC stressed that Badger Meter, Inc. (NYSE:BMI) still anticipates strong growth in 2026 despite the timing problems, calling the market’s response “overdone” and offering “an attractive entry point” for investors.
Badger Meter, Inc. (NYSE:BMI) is an American company that specializes in flow measurement, water quality, and control products, serving water utilities and other commercial customers.
8. Ormat Technologies, Inc. (NYSE:ORA)
Ormat Technologies, Inc. (NYSE:ORA) ranks among the best sustainability stocks to invest in. On February 17, Ormat Technologies, Inc. (NYSE:ORA) signed an expansive long-term geothermal power purchase agreement (PPA) with NV Energy to assist with Google’s Nevada data center capabilities. By leveraging the company’s increased exploration and drilling operations in recent years, the deal fortifies Ormat’s long-term growth strategy beyond 2028.
The arrangement, which requires approval from the Nevada Public Utilities Commission, is slated for completion in the latter half of 2026 and will add up to 150MW of geothermal power. The multi-project strategy is designed to allow Ormat Technologies, Inc. (NYSE:ORA) to establish a number of additional geothermal projects throughout Nevada, with the initial facilities projected to become operational as early as 2028 and continuing until 2030.
Ormat Technologies, Inc. (NYSE:ORA) is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation, as well as energy storage solutions.
7. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
SolarEdge Technologies, Inc. (NASDAQ:SEDG) ranks among the best sustainability stocks to invest in. On February 19, TD Cowen increased SolarEdge Technologies, Inc. (NASDAQ:SEDG)’s price objective to $43 from $38, while retaining a Buy rating on the company’s shares. The firm referenced the company’s fourth-quarter 2025 results, which showed a continuous gross margin growth to 16.64% along with positive free cash flow.
The company announced a fourth-quarter adjusted loss of $0.14 per share, which was much better than the consensus projection of a $0.26 loss. Revenue topped at $335.4 million, above the average forecast of $331.28 million and reflecting a 70% increase year-over-year, marking the company’s fourth straight quarter of revenue increase.
TD Cowen highlighted exports, Nexis, and a single SKU as important drivers of profit expansion and market share growth. The firm sees the solid-state transformer market as appealing, potentially leading to a ramp in 2028.
SolarEdge Technologies, Inc. (NASDAQ:SEDG) provides inverter solutions and power optimizers for solar photovoltaic systems. Its products maximize energy output at the module level and include energy storage and monitoring software.
6. Rivian Automotive Inc. (NASDAQ:RIVN)
Rivian Automotive, Inc. (NASDAQ:RIVN) ranks among the best sustainability stocks to invest in. On February 17, Stifel increased its price target for Rivian Automotive, Inc. (NASDAQ:RIVN) shares to $20 from $17, while retaining a Buy rating on the company’s shares. The firm noted Rivian’s fourth-quarter 2025 results and projections as evidence that the company can excel in a variety of areas, including rising margins and strong pre-production evaluations of the R2 vehicle.
Stifel highlighted that Rivian’s 2026 delivery target of 62,000 to 67,000 units outperformed its pre-release projection of 52,000 units. The estimate includes an expected robust second-half ramp in R2 output.
The firm stated that important considerations for Rivian Automotive, Inc. (NASDAQ:RIVN) over the year will be R2 sales performance and evidence supporting predictions of rising automotive margins as R2 production expands.
Rivian Automotive, Inc. (NASDAQ:RIVN) designs, develops, and manufactures category-defining electric vehicles and accessories. Its operations are divided into the following segments: Automotive, Software, and Services.
5. Nextpower Inc. (NASDAQ:NXT)
Nextpower Inc. (NASDAQ:NXT) ranks among the best sustainability stocks to invest in. On January 28, BMO Capital increased Nextpower Inc. (NASDAQ:NXT)’s price target to $104 from $93 while keeping a Market Perform rating on the company’s shares. The hike followed Nextpower’s third-quarter earnings, which BMO reported were “well ahead of consensus” forecasts. The company generated EBITDA of $214 million, 19% above expectations, driven by increased demand in the US. Nextpower Inc. (NASDAQ:NXT) also boosted its fiscal year 2026 forecasts, bringing it closer to BMO’s higher-than-expected estimates.
BMO attributed the solid performance to accelerated U.S. operations during the quarter. Moreover, the company’s 2027 projection remained unchanged, as expected by BMO. Nextpower’s backlog and orders continue hinting at a book-to-bill ratio of more than 1.0x, including ongoing Saudi partnerships and projects.
Nextpower Inc. (NASDAQ:NXT) is a California-based company that provides solar tracker technologies and solutions. The company’s core offerings include NX Horizon, NX Horizon-XTR, NX Horizon Hail Pro, NX Horizon Low Carbon, and TrueCapture.
4. Digital Realty Trust, Inc. (NYSE:DLR)
Digital Realty Trust, Inc. (NYSE:DLR) ranks among the best sustainability stocks to invest in. On February 5, Digital Realty Trust, Inc. (NYSE:DLR) reported fourth-quarter and full-year 2025 results, with an EPS of $0.24, 17.24% below the consensus projections of $0.29. However, revenue topped forecasts, coming in at $1.63 billion vs the predicted $1.58 billion.
The company booked $400 million at 100% share during the quarter, amounting to a total of $1.2 billion in bookings for the year. Same-capital cash NOI increased by 4.5% year-over-year, while the company retained significant liquidity of around $7 billion at the end of the fourth-quarter.
Digital Realty’s interconnection division performed particularly well, with historic bookings of $96 million in the 0-1MW + Interconnection segment in Q4. This segment received 155 new logos in the quarter, increasing the total for the year to 569 new clients.
Digital Realty Trust, Inc. (NYSE:DLR) gave an optimistic outlook for 2026, forecasting Core FFO per share of $7.90 to $8.00, reflecting an 8% year-over-year increase from $7.39 in 2025.
Digital Realty Trust, Inc. (NYSE:DLR) is a data center REIT that owns, develops, and operates facilities that support digital infrastructure. Its data centers help businesses, cloud providers, and technology companies store data, run applications, and maintain global connectivity.
3. Enphase Energy, Inc. (NASDAQ:ENPH)
Enphase Energy, Inc. (NASDAQ:ENPH) ranks among the best sustainability stocks to invest in. On February 6, Freedom Capital Markets boosted Enphase Energy, Inc. (NASDAQ:ENPH)’s price target from $31 to $44, while keeping a Hold rating on the company’s shares. The hike follows Enphase Energy’s positive revision of its Q1 2026 revenue projection, with the company noting that this quarter is expected to be a low point in 2026.
Meanwhile, Mizuho increased its price target for Enphase Energy, Inc. (NASDAQ:ENPH) to $39 from $38. Mizuho identified several potential catalysts for the company, including the adoption of IQ9 microinverters and fifth-generation batteries. That said, the firm questioned the company’s loan and prepaid lease approach, stating that “adding more parties that need margins rarely leads to lower costs.”
The firm noted improvements to Enphase’s European development, with IQ9 and three-phase microinverters raking in $5-10 million in sales as the company explores markets worth roughly $400 million.
Enphase Energy, Inc. (NASDAQ:ENPH) is a global energy management technology company that provides residential and commercial solar plus storage solutions.
2. Darling Ingredients Inc. (NYSE:DAR)
Darling Ingredients Inc. (NYSE:DAR) ranks among the best sustainability stocks to invest in. BofA Securities increased its price target for Darling Ingredients Inc. (NYSE:DAR) to $65 from $60 on February 12, while still retaining a Buy rating on the company. The increase comes after Darling Ingredients reported fourth-quarter 2025 adjusted EBITDA of $336 million, which beat average projections of $267 million. Each of the company’s business areas surpassed expectations, with Feed leading at $193 million compared to the average of $165 million.
Darling’s core operation generated $923 million in EBITDA for the full fiscal year 2025, above management’s estimate range of $875-900 million. The company reduced net debt by more than $150 million quarter over quarter, lowering its leverage ratio from 3.65x to 2.9x.
The Food segment generated EBITDA of $82 million, exceeding the $72 million estimate, while the Fuel segment, excluding Diamond Green Diesel (DGD), achieved $27 million, surpassing the $24 million projection.
Darling Ingredients Inc. (NYSE:DAR) is a global company operating in the bio-nutrient solutions and the renewable energy sector. Its operations span across three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients.
1. Tesla Inc. (NASDAQ:TSLA)
Tesla Inc. (NASDAQ:TSLA) ranks among the best sustainability stocks to invest in. On February 11, Benchmark maintained its Buy rating and $475 price target for Tesla Inc. (NASDAQ:TSLA) as the EV giant prepares for a strategy adjustment in early 2026. Benchmark highlighted Tesla’s fourth-quarter results, which showed durability in margins, energy growth, and cash flow amid the company’s transformational period.
The firm described 2026 as an “investment year” for Tesla Inc. (NASDAQ:TSLA), with increased spending planned in a variety of areas, including autonomy, AI, robots, and energy infrastructure.
Although sentiment and technical factors may drive short-term upside, Benchmark’s valuation methodology for Tesla remained unchanged, suggesting that the company’s long-term value creation is tied to its development as a “physical AI, software, and fleet-based platform rather than a traditional auto OEM.”
Tesla Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells EVs, and energy generation and storage systems in the US, China, and internationally through two segments: Automotive and Energy Generation & Storage.
While we acknowledge the potential of TSLA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSLA and that has 100x upside potential, check out our report about this cheapest AI stock.
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