11 Cheap ESG Stocks to Buy According to Hedge Funds

2. Cisco Systems, Inc. (NASDAQ:CSCO)

Number of Hedge funds holding: 84

Forward P/E as of May 06, 2025: 14.93

Cisco Systems, Inc. (NASDAQ:CSCO) is a U.S.-based firm that offers information technology and networking services. Incepted in 1984, the company also offers network security and access management services. CSCO delivers its products and services directly and indirectly through system integrators, service providers, and other distributors.

If there were an award for combining technology, workforce, and broader networks perfectly to solve challenges towards sustainability, Cisco Systems, Inc. (NASDAQ:CSCO) would be the clear winner. The company has taken one clear strategy, The Plan for Possible, that guides in embedding sustainability in products, advancing clean energy access, strengthening relationships with suppliers, focusing on minimizing environmental impacts, and fostering climate resilience in society.

Like any other environmentally concerned enterprise, Cisco Systems, Inc. (NASDAQ:CSCO) has also set targets. While it hopes to achieve net-zero GHG emissions across value chains by 2040, the near-term targets revolve around reducing absolute Scope 1, Scope 2, and Scope 3 emissions, making it quite negligible. Having said that, the company is the first technology hardware and equipment company to get its 2040 goal approved under the SBTi Net-Zero Standard. In achieving this goal, the company is focused on energy-efficiency innovation, connecting clean energy, and collaborating with its networks to make the transition smoothly.

The design of energy-efficient products is a core part of its green strategy. Through its Plan for Possible initiative, Cisco Systems, Inc. (NASDAQ:CSCO) modernizes data centers, adopts energy management solutions, and builds smart energy infrastructure. Through CSCO’s Circular Design Principles, the company enhances the energy efficiency of its products, similar to that of the Cisco UCS X-Series Modular System, which has an improved cooling process in contrast to the previous UCS rack servers.

Additionally, the company has developed a Sustainability Data Foundation (SDF), which is a crucial source of sustainability-associated data for various cases. Cisco Intersight IT operations platform is another project undertaken that allows clients to dynamically adjust power for improved efficiency. Cisco Systems, Inc. (NASDAQ:CSCO) has directed US$39 million in investments from FY23 to FY25, emphasizing renewable energy and the development of fleet electrification projects. Additionally, the giant’s power purchase agreements (PPAs), particularly with the Spanish renewable energy provider IGNIS and in India for the development of wind and solar generation, is a testament to all its energy-related efforts. Thus, CSCO can be considered one of the best ESG stocks.