3 Canadian ESG Stocks for Ethical Investors

Like spending, ethical investing is a facet of “voting with your money,” ethical investors wish to divert their capital to companies with good ESG scores.

| More on:

Environmental, social, and governance (ESG) are the three domains in which an organization’s responsible and ethical business practices are evaluated. Governance mostly relates to the internal practices of a business, while the environmental and social practices of a business determine its outward impact.

Several independent bodies assign an ESG score to various publicly traded companies around the globe. If you are interested in ESG investing, you should consider the companies with the best ESG scores with the most reputable of these evaluation bodies.

A telecom company

When it comes to the three telecom giants in Canada, Telus (TSX:T) stands out from the bunch for a number of reasons, including its compelling combination of healthy dividends and capital-appreciation potential. It also has one of the best ESG ratings in the Canadian telecom sector.

The company has started and followed through with several social and environmental initiatives. This includes its shift to renewables by 2025, going net zero by 2030, and helping over 600,000 people in need by the next three years.

The company is also investing heavily in sustainable startups and has already grown into one of the largest digital health companies in Canada. If you combine all these ESG strengths of the company with the inherent resilience of the stock and its long-term growth and dividend potential, Telus stands out as a great pick for ESG investors.

A real estate service company

Colliers International Group (TSX:CIGI) is a real estate service company with an impressive international presence. It operates in 66 countries and has about $98 billion worth of assets under its direct management. The company has mediated thousands of real estate transactions and caters to both commercial and residential real estate clients.

It’s also a solid ESG investment. The company has undertaken several environmental and socially impactful projects over the years, including the project management of the country’s first mass timber, zero-carbon building.

As an investment, Colliers is a powerful pick for both its capital-appreciation potential and dividends. The stock has returned over 600% to its investors in the last 10 years through growth and dividends.

A gold royalties company

Thanks to the nature of their business, mining companies typically do not score well on environmental scales, and it’s easy to see why. But Franco-Nevada (TSX:FNV), one of the largest gold royalty companies in the world, has solid ESG scores with at least three of the most prominent ESG evaluators.

Since the company has a financial stake in various gold and other mining businesses and no operational overlap/oversight, the business model doesn’t weigh down the stock. The company also closely monitors its carbon footprint, including the scope three emissions, which few other businesses are currently doing.

Franco-Nevada has been a decent grower, and, compared to gold mining stocks, its performance has been relatively consistent over the past 10 years.

Foolish takeaway

The three companies are dominant in their respective industries and offer decent return potential to their investors. They are solid long-term holdings that also stand out as good ESG investments. By choosing these stocks, you can take the ethical/responsible investor route without compromising on profitability.

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 Colliers International Group and TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »