In this article, we will take a look at some of the best cheap ESG stocks to buy.
These days, it seems like everyone wants to wear the “saving the world” cape. Whether this urge to make a real impact on the world stems from a desire to ride the social trend wave or simply out of genuine concern is, well, a debate for another day. For now, let’s focus on the fact that all companies must adhere to Corporate Social Responsibility (CSR) by law.
In other words, ESG companies are those that incorporate Environmental, Social, and Governance factors into their operations and decision-making. This framework is utilized to measure an organization’s practices and performance on sustainability and ethical grounds. In capital markets, some investors employ ESG criteria to assess companies and make their investment decisions accordingly, a practice known as ESG investing. While investing delivers financial returns, ESG investing offers both financial returns and societal impacts, and that’s what is most valued by some investors.
Some believe ESG investing is aligned with reduced risk exposure, stakeholder interests, and superior returns. Not only attractive in theory, but there are reports that back this form of investing. For instance, the Sustainability Megatrends Report by Cushman & Wakefield reveals that ESG companies are gaining traction from institutional investors. A survey of 250 institutional investors indicated that around 60% noted higher performance yield from ESG investments, and 78% were willing to pay higher premiums for these funds.
“Institutional investors are showing increased demand for properties with strong ESG-related management and activities,” the report underscores.
A US SIF “Trends Report” reveals that out of the US market size of $52.5 trillion, $6.5 trillion (12%) is identified as a sustainable or ESG investment. Having said that, as many as 73% of respondents believe the sustainable investment market will grow over the next few years. Therefore, community investing continues to shine with rising enthusiasm across several types of investors.
ESG companies are mainly ranked by third-party ranking agencies based on how well they perform across Environmental, Social, and Governance indicators. Using standardized metrics, proprietary models, and disclosures, the companies are then assessed and compared. Among the most notable agencies are MSCI, Sustainalytics (by Morningstar), Refinitiv ESG Scores, and S&P Global ESG Scores. In this analysis, we have used the ratings by Sustainalytics, which covers over 15,000 firms across 42 industries globally. The firm recently disclosed its 2025 list of ESG Top-Rated Companies, identifying Global 50 Top-Rated companies and other regional and industry leaders. Given this, we will take a look at some of the best ESG stocks to consider.
Our Methodology
We have compiled a list of 11 companies ranked by Sustainalytics (by Morningstar) in its recent ESG Top-Rated Companies report. From the report, we identified companies with a forward P/E less than 15, extracted from FINVIZ. From there, we picked companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q4 2024. From less preferred to highly preferred, according to hedge funds, the selected stocks are listed in either the global, regional, or industry standings in the report.
At Insider Monkey, we are obsessed with 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. Flex Ltd. (NASDAQ:FLEX)
Number of Hedge funds holding: 52
Forward P/E as of May 06, 2025: 12.96
Flex Ltd. (NASDAQ:FLEX) operates as a contract manufacturing company that offers design, manufacturing, and product management solutions to electronic and technology companies. While the Flex Agility Solutions (FAS) segment is centered on communications, consumer devices, and lifestyle, the Flex Reliability Solutions (FRS) segment encompasses markets like Automotive, Health Solutions, and Industrial. The company leverages its expertise and global reach to impact the world positively.
Jumping on the ESG bandwagon, Flex Ltd. (NASDAQ:FLEX) maintains a strategy aligned with industry standards, regulatory compliance, and best practices. With Plan, Do, Check, and Act at its core, the Flex global sustainability program office is ensuring that the ESG management system recognizes improvement areas and takes corrective measures. The company has employed a ‘green’ on-site sustainability team that is in charge of the development and administration of site-specific plans. Within the Flex Power Modules, a scorecard technique is used to review the performance, highlighting issues and sharing ideas with the sustainability leaders.
Similar to its peers, the company has set bold goals for the year. Reducing water withdrawal, minimizing emissions, achieving zero waste, encouraging volunteering activities, and increasing diversity are some targets Flex Ltd. (NASDAQ:FLEX) has set for the year. Each of its sites is engaged in a local community program in one way or the other. For instance, the Penang, Malaysia team participated in a turtle conservation program, planting trees, and clearing up beaches to protect marine life. Additionally, the company has a “Giving Week” annually, during which the global workforce engages in volunteering initiatives.
In 2021, the company set up the Flex Foundation that continues to invest in programs associated with the Sustainable Development Goals by the United Nations. From good health and well-being to responsible consumption and production, the foundation takes climate action for a more sustainable tomorrow. These investments support community building, environmental conservation, global public health, and educational programs for disadvantaged groups. When it comes to making a difference, Flex Ltd. (NASDAQ:FLEX) is definitely the one and is one of the best cheap stocks to buy.
10. Seagate Technology Holdings plc (NASDAQ:STX)
Number of Hedge funds holding: 52
Forward P/E as of May 06, 2025: 10.06
Seagate Technology Holdings plc (NASDAQ:STX) is a leading provider of hard disk drives for data storage for both enterprise and consumer markets. With a presence in Singapore, the United States, the Netherlands, and internationally, the core offerings of the company include mass capacity storage products, legacy applications, and the Lyve edge-to-cloud mass capacity platform. The technology giant remains focused on delivering sustainable value for customers, stakeholders, and communities. With a P/E ratio of 10.06, STX is one of the cheap stocks to buy.
Waste Management is an integral part of Seagate Technology Holdings plc (NASDAQ:STX). In doing so, programs have been established to carefully track, manage, and report all kinds of waste across the global footprint. These programs are then used to organize various waste streams and effectively dispose of waste whilst complying with the regulatory requirements. Among these programs is the Circularity Program, which allows the company to minimize environmental impact, improve supply chain resilience, and support the company’s strategy. Extending the useful life involves obtaining warranty-returned drives, buying back products from customers, and refurbishing and reselling useful drives. In 2023 alone, the company was able to extend the life of around 1.19 million drives.
A way of supporting a culture of inclusivity is its Employee Resource Groups (ERG), whereby Seagate Technology Holdings plc (NASDAQ:STX) provides a haven for discussion, connection, networking, and professional development. This aids in bridging a connection with the company’s workforce by making them feel safe, valued, and respected. One project that is of true importance is the company’s STEM and education outreach. From interacting with students at STEM events to providing nutritious meals to those in need and joining hands in the war against cancer and other diseases, the company has a strong footing in community engagements.
While implementing strong data security protocols to maintain good governance, Seagate Technology Holdings plc (NASDAQ:STX) continues to ensure that the suppliers work with equally valued ESG morals. This accountability is a part of the annual monitoring and audit process, making STX one of the most ESG-responsible companies to watch.
9. Crown Holdings, Inc. (NYSE:CCK)
Number of Hedge funds holding: 53
Forward P/E as of May 06, 2025: 12.76
Crown Holdings, Inc. (NYSE:CCK) is a global packaging powerhouse operating through the Americas Beverage, European Beverage, Asia Pacific, and Transit Packaging segments. Founded in 1892, the company manufactures and markets recyclable aluminum beverage and non-beverage cans, steel crowns, glass bottles, ends, and closures. From food to household and industrial industries, the company serves a wide clientele.
The company’s Twentyby30 program is what we’re counting on the most. This bold plan to accelerate sustainability progress comprises 20 evaluative goals targeted for 2030 or sooner. The pillars of action are climate action, resource efficiency, optimum circularity, working together, and never compromising. Through its sustainable metal packaging utilization and environmental-focused priorities, Crown Holdings, Inc. (NYSE:CCK) is leading the world of innovation.
Since 2013, Crown Holdings, Inc. (NYSE:CCK) has honored the team behind its ability to advance toward sustainable goals, showing how it’s focused on employee engagement. From the Social Sustainability Award to the Environmental Sustainability Award and the Sustainability Award for Safety, the company recognizes initiatives related to the environment, safety, and community.
While the plant in France, tied to a multi-year heat recovery project, reduces the gas utilized by washer boilers by around 60% and improves process reliability, the facility in Wisconsin, United States, is focused on minimizing water withdrawal. The “Trueque a la lata” project, based in Colombia, is designed in a way to enhance the collection and recycling of UBCs, which are then forwarded to DP Watering. Instead of paying the company for the materials, DP Watering supports “Mano Amiga,” an educational program for economically destitute students. The Transit Packaging division assists in implementing uniform glove and forearm protection for functions within its locations, reducing the possibility of future hand-related accidents.
With a total ESG risk score of 12.8, with environmental risk, social risk, and governance risk scores of 12.8, 9.1, and 1.6, respectively, Crown Holdings, Inc. (NYSE:CCK) contributes far less to environmental damage and an inequitable society. Having said that, CCK is one of the best ESG stocks to invest in.
