3 ESG Stocks You Can Buy and Hold For Decades

Raising the ESG profile of your portfolio doesn’t have to come at the cost of profitability, and the right stocks can help you with that.

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For many investors, there is much more to investing than financial gains and building a retirement nest egg. These investors also focus on the company’s operations and how it affects the environment and contributes to the societies it operates in.

This ESG investing strategy requires investors to dig deeper into a business’ operations and far-reaching impact. If you are interested in investing in decent ESG stocks without compromising profitability, three stocks should be on your radar.

A renewable energy company

Renewable energy companies like Brookfield Renewable Partners (TSX:BEP.UN) allow you to gain exposure to renewable energy assets across the globe. The company offers a richer, more comprehensive (geographically and asset-wise) exposure to renewables than most local producers might.

Brookfield Renewable has a diverse portfolio of hydro, solar, wind, and energy storage assets spread across the globe, though the largest concentration is in North America.

Brookfield is also a rewarding stock that offers decent capital appreciation potential and healthy dividends. In the last 10 years, BEP.UN has offered about 323% returns, and only about half of it came from its price growth (about 152%). The rest came from its dividends. Its yield is usually quite modest, but thanks to a 33% discount, the stock currently offers a 4.3% yield.

A railway company

A railway company might look out of place on this list as transportation businesses are always analyzed from their emissions perspective. Still, Canadian National Railway (TSX:CNR) is counted among the top ESG stocks in Canada. The company has invested heavily in a variety of community programs and also contributes towards the environment.

Its environmental impact starts with the fact that railways are at least four times as efficient as conventional vehicles/cargo trucks on the road. The company also keeps close track of its emissions and has made significant strides toward recycling its waste.

CNR stock is also a compelling addition to your portfolio for both its dividends and growth potential. It’s a well-established aristocrat that has grown its payouts for about 27 consecutive years, though it offers a very modest yield. In the last decade, the stock has grown by about 235%.

A battery metal company

Transportation is still one of the largest contributors to greenhouse gases (GHG emissions), and EVs are expected to be our salvation. This puts battery metal mining stocks like Patriot Battery Metals (ASX:PMT) up near the top of the ESG hierarchy. Battery metals are the lifeblood of the EV industry, at least until a better breakthrough technology than the current Li-ion batteries enters the market.

Patriot Battery Metals is a minerals exploration company aiming to build a strong portfolio of mining assets. It already has access to two mining assets that it owns 100%, one in the US and the other in Quebec, Canada.

PMT is a relatively new stock, but so far, it has only gone up, and by a massive margin – 433% in less than a year. If it continues growing at this or a comparable pace, you can increase the size of your nest egg while also raising your portfolio’s ESG profile by investing in this company.

Foolish takeaway

ESG stocks cover a healthy range, from blue-chip stocks belonging to the transportation sector to small-cap mining stocks. This diversity can be a boon for ESG investors as it gives them a wide range of options, making it easy to balance ESG and investment (financial) goals.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners and Canadian National Railway. The Motley Fool has a disclosure policy.

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