We recently compiled a list of the 8 Best Humane Stocks to Invest in Now. In this article, we are going to take a look at where S&P Global Inc. (NYSE:SPGI) stands against other best humane stocks to invest in now.
In recent years, the investment landscape has seen a significant shift towards socially responsible investing strategies. Among these, humane investing has gained considerable traction. Humane investing is a comprehensive socially responsible investing strategy that encompasses several key aspects. Firstly, it involves the reduction of animal products. This can range from food and fashion to pharmaceuticals and cosmetics, focusing on companies that minimize or eliminate the use of animal products. Secondly, it ensures that businesses respect human rights and address any adverse outcomes. This includes fair labor practices, anti-discrimination policies, and ethical supply chain management. Thirdly, it promotes environmental conservation, such as reducing carbon footprints, sustainable sourcing, and waste reduction. Lastly, it involves shareholder activism, where investors engage with companies to improve welfare practices.
READ ALSO: 12 Most Promising Green Stocks According to Hedge Funds and 10 Best Ethical Companies To Invest In According to Reddit.
On January 24, Morningstar reported that the landscape of sustainable investing is entering a new era of complexity, characterized by a stark divide between the United States and Europe. This shift was precipitated by a series of significant events, including President Donald Trump’s withdrawal of the United States from the Paris Agreement. The decision underscores a growing divergence in environmental, social, and governance (ESG) priorities, with Europe taking a leading role and the US moving in the opposite direction.
Europe has positioned itself as a leader in sustainable investing, with a pledge to achieve “climate neutrality” by 2050, or net-zero emissions. The European Union has also implemented ambitious mandatory ESG and sustainability reporting requirements, setting a high bar for corporate transparency and responsibility. This regulatory framework not only supports sustainable investing but also creates a fertile ground for asset managers to develop and market ESG-focused products with higher profit margins and a global reach.
Conversely, the US under the Trump administration has taken a different path. Trump’s inaugural speech signaled a pivot toward promoting fossil fuels and scaling back support for renewable energy sources. This shift is reflected in the actions of major financial institutions, such as the world’s six largest banks withdrawing from a major climate coalition, and BlackRock, the world’s largest asset manager, pulling out of a similar group. This move is seen as a significant setback by sustainably-minded investors as the financial industry plays a crucial role in financing companies and achieving net-zero emissions targets set by the Paris Agreement.
For asset managers, this two-speed world presents both challenges and opportunities. European managers, who operate in a market where sustainability is mainstream, are likely to gain a competitive advantage. They can leverage their expertise in ESG to attract asset owners, such as pension funds and sovereign wealth funds, who are increasingly allocating to ESG-focused strategies. This could lead to a preference for European managers, especially in impact investing, where they can demonstrate greater commitment and expertise.
US-based managers, on the other hand, are likely to adopt a more pragmatic approach, aligning their strategies with local market demands and avoiding vocal advocacy for ESG. This “greenhushing” strategy is necessary to navigate the regulatory and political headwinds in the US while maintaining a global presence, particularly in Europe and the Asia-Pacific region.
As the demand for ethical and sustainable investment options grows, humane investing provides a compelling pathway to drive positive change while achieving financial growth.
A group of analysts studying data on a large monitor.
Our Methodology
To compile our list of the 8 best humane stocks to invest in now, we used environmental, social, and governance (ESG) ETFs to compile a list of 25 companies. We then looked at their ESG rating from S&P Global and picked 8 companies that have a minimum ESG score of 60. We also used Insider Monkey’s Hedge Fund database as of Q3 2024 to find the number of hedge fund holders for each company. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Investors: 85
ESG Score: 73
S&P Global Inc. (NYSE:SPGI) provides essential financial intelligence, ratings, and data analytics to investors and corporations. The company’s ESG initiatives include transparency in governance, climate risk analysis, and promoting sustainable investment practices. S&P Global Inc. (NYSE:SPGI) operates through five core divisions: Market Intelligence, Ratings, Commodity Insights, Mobility, and S&P Dow Jones Indices. These divisions collectively serve a diverse range of clients, from financial institutions and governments to corporations and individual investors.
S&P Global Inc. (NYSE:SPGI) is leveraging cutting-edge technology to enhance its products and services. The company has been at the forefront of integrating Generative AI (GenAI) across its divisions to improve user experience, automate workflows, and provide deeper insights. The company has introduced advanced analytics solutions and GenAI functionality through CapIQ Pro, which allows users to build predictive models and identify patterns more efficiently. Furthermore, in Commodity Insights, the company has transitioned to cloud delivery of AI-ready data on clean-energy technology and has introduced an AI-powered chatbot, ChatAI, which has significantly enhanced customer engagement and satisfaction.
Furthermore, S&P Global Inc. (NYSE:SPGI) has announced the integration of its Sustainable One business with the energy transition products and assets within Commodity Insights. This move aims to create unique and forward-looking solutions to help clients navigate the energy transition and the financial services sector.
Overall, SPGI ranks 3rd on our list of the best humane stocks to invest in now. While we acknowledge the potential of SPGI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPGI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.