Ranked: the best companies in the FTSE 100 to invest in for sustainable impact

UK countryside

There’s good news for investors looking to make more sustainable, responsible, impactful and rewarding choices! DailyFX, a leading portal for financial market news, has conducted research to identify companies in the FTSE 100 with the best-performing environmental, social and governance (ESG) investments and dividends yields.

The timing is perfect as we emerge strongly from the pandemic, with investment data indicating increased investment across companies with strong ESG track records. Is ESG investing worth it? And what are the leading ESG companies in the FTSE 100? Let’s find out.

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Note that the figures used in this article may change. DailyFX used the percentage of the most recent dividend paid out and their 2020 revenue figures to generate the data. Stock price data was also collected through the date range of 23/04/2021 to 26/04/2021.

What is ESG?

ESG is a criterion utilising a set of standards to measure a company’s investment returns alongside its:

  • Impact on the environment
  • Relationships with employees, suppliers, stakeholders and community
  • Governance in areas like company policies, board composition, corruption and accounting methods

Is ESG investing worth it?

Investors are increasingly becoming interested in making a positive impact. Figures from the Investment Association indicate that ESG capital inflow in 2020 was much higher than in previous years. In fact, the net inflow between January and September 2020 was £7.1 billion, up 275% on the same period the previous year. Why is this happening?

Well, during the COVID-19 pandemic, investments in companies with solid ESG track records had lower volatility than those in their counterpart non-ESG companies. Lower volatility reduces risk and enhances risk-adjusted returns, which is music to investors’ ears.

Some investors are even ruling out investments based on moral values, fuelling the increased interest in ESG investing.

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What are the best companies in the FTSE 100 for sustainable impact?

DailyFX ranked the best companies in the FTSE 100 to invest in for sustainable impact with the help of S&P ESG. Based on the scores, multinational beverage company Coca-Cola ranked top, with a score of 92 out of 100. Unilever came in second with 89, while Diageo and Burberry Group tied for third with a score of 87.

However, as indicated earlier, ESG investing considers investment returns alongside sustainability. Therefore, if your priority as an investor is the dividend yield, it’s worth noting that British American Tobacco offers a 7.86% yield.

Here are the top 25 companies in the FTSE 100 to invest in for sustainable impact:

Rank

Company

Ticker

S&P ESG score

Dividend yield

Revenue

Stock price

1

Coca Cola HBC

CCH

92

2.19%

£12.35m

£2,560.27

2

Coca Cola HBC AG

CCH

92

2.19%

£12.35m

£2,560.27

3

Unilever

ULVR

89

3.51%

£59.28m

£4,204.03

4

Diageo

DGE

87

2.12%

£70.23m

£3,315.81

5

Burberry Group

BRBY

87

0.00%

£8.07m

£2,127.22

6

British American Tobacco

BATS

85

7.86%

£52.32m

£2,781.95

7

AstraZeneca

AZN

81

2.64%

£119.51m

£7,809.40

8

United Utilities Group

UU.

79

4.42%

£13.62m

£974.94

9

RELX

REL

78

2.42%

£21.68m

£1,992.98

10

Barclays

BARC

77

0.55%

£67.05m

£190.25

11

Polymetal International

POLY

77

5.70%

£11.77m

£1,640.16

12

Rolls-Royce Holdings

RR.

74

0.00%

£29.16m

£107.66

13

Informa

INF

74

0.00%

£13.32m

£586.11

14

Standard Life Aberdeen

SLA

74

5.33%

£9.18m

£283.49

15

InterContinental Hotels Group

IHG

72

0.00%

£11.54m

£5,400.33

16

Antofagasta

ANTO

71

2.19%

£16.65m

£1,973.95

17

Johnson Matthey

JMAT

69

1.57%

£7.62m

£3,391.41

18

Rio Tinto

RIO

68

5.58%

£90.88m

£6,368.28

19

Royal Dutch Shell A

RDSA

68

3.46%

£35.37m

£1,406.56

20

Standard Chartered

STAN

68

1.36%

£19.39m

£493.95

21

Taylor Wimpey

TW.

67

2.24%

£9.47m

£188.71

22

International Consolidated Airlines

IAG

65

0.00%

£38.41m

£209.84

23

Rentokil Initial

RTO

65

1.07%

£10.80m

£524.40

24

BAE Systems

BA.

64

4.74%

£26.49m

£508.86

25

Smith & Nephew

SN.

64

1.81%

£22.87m

£1,522.38

Take away

DailyFX’s insight is very helpful for investors looking to make more sustainable choices. However, carrying out your own due diligence is always ideal to determine your risk and potential reward. Also, it’s always wise to consult an independent financial adviser before you invest, especially if you’re a first-time investor.

The post Ranked: the best companies in the FTSE 100 to invest in for sustainable impact appeared first on The Motley Fool UK.

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