We recently published a list of According to Reddit, the 7 most ethical companies are the best investments. In this article, we take a look at how HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI) compares to other ethical companies to invest in according to Reddit.
Ethical investing involves selecting investments based on ethical principles such as environmental, religious or social values. Unlike socially conscious investing, which follows a specific set of guidelines, ethical investing is more individual. Investors typically avoid gambling, alcohol or firearms and carefully consider whether their investments align with their values.
Other stocks that ethical investors avoid include stocks of companies that treat employees poorly, have high gender parity, or discriminate against employees based on their race, religion, or sexual orientation. Environmentally conscious companies are also an important part of ethical investing.
Is ethical investing the future?
A 2022 report by Stamford University found that the younger generation considers ethical investing to be very important. A 2022 survey of 2,470 individual investors conducted by Rock Center for Corporate Governance at Stanford Universityfound significant differences in environmental, social and governance (ESG) preferences by age and wealth. Younger and wealthier investors are more likely to support ESG initiatives, even at the expense of returns, while older and less wealthy investors are generally opposed.
In recent years, support for ESG proposals has grown sharply. Average support among S&P 500 companies rose from 18% in 2012 to 35% in 2021, and the number of proposals adopted rose from 0 to 28. The survey found that 70% of young investors (ages 18-41) are very concerned about environmental issues, compared to just 35% of older investors (ages 58+). Similarly, 65% of young investors are very concerned about social issues, compared to 30% of older investors. When it comes to corporate governance, 64% of younger investors express significant concerns, compared to just 28% of older investors.
In addition, 86% of older investors would sacrifice little or no returns to reduce carbon emissions, while 64% of younger investors would sacrifice medium or large amounts. In addition, 91% of older investors are unwilling to sacrifice returns to improve diversity in the workplace, while 62% of younger investors are willing to do so.
The survey also found that investor attitudes toward ESG vary across fund companies. Investors in State Street and Invesco funds show almost twice as much concern about environmental issues as investors in Fidelity funds. A significant percentage of investors in Fidelity funds (40-45%) and Vanguard funds are unwilling to sacrifice returns for ESG, while a smaller percentage in American Funds and BlackRock (25-30%) share this reluctance.
Despite these differences, 83% of investors across all demographics believe fund managers should consider their views when voting on ESG issues. The results suggest that fund managers may need to distribute votes proportionally to reflect the diverse preferences of their investor base.
Our methodology
For this article, we combed through several subreddits to find out which companies are considered ethical by users. We narrowed the list down to the 7 most mentioned stocks and used each stock’s hedge fund sentiment as our decision criteria. Companies are listed in ascending order of the number of hedge fund holders in Q2 2024. Hedge fund data comes from our database of over 900 elite hedge funds.
Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (Further details can be found here).
A view from a rooftop of the skyline of a bustling city illuminated by solar panels and wind turbines.
HA Sustainable Infrastructure Capital, Inc. (NYSE:HASIE)
Number of hedge fund owners: 16
HA Sustainable Infrastructure Capital, Inc. (NYSE:HASI), formerly known as Hannon Armstrong Sustainable Infrastructure Capital, Inc., is a firm focused on climate investing. It partners with clients and provides capital to support the transition to clean energy. The firm invests in building- or facility-specific behind-the-meter (BTM) distributed energy projects designed to reduce energy consumption or costs for specific buildings or facilities. According to Reddit, it is one of the best companies to invest in.
In addition, it supports grid-connected renewable energy initiatives, including solar, solar-plus-storage and onshore wind projects aimed at generating clean energy. It also invests in various projects in the fuels, transportation and nature sectors, such as fleet decarbonization and ecological restoration efforts. The company pursues a range of investment approaches, including equity investments, joint ventures, land ownership and lending activities.
With a stake value of $58.42 million, 16 hedge funds held positions in HA Sustainable Infrastructure (NYSE:HASI) during the second quarter. As of the second quarter, Encompass Capital Advisors is the largest shareholder in the company, holding a position valued at $18.76 million.
HA Sustainable Infrastructure (NYSE:HASI) is known for its innovative approach to climate investing and its growing portfolio in sustainable infrastructure. The company is distinguished by its focus on projects that aim to reduce or offset greenhouse gas emissions. According to the company’s website, it is the first publicly traded U.S. company to report avoided emissions from each investment using its unique CarbonCount metric.
Since its IPO in 2013, the company has invested over $12 billion in assets that collectively prevent 7.4 million tons of carbon emissions, the equivalent of eliminating the emissions of over 1.6 million passenger vehicles. Additionally, these investments help save more than 7 billion gallons of water each year. In 2023 alone, the company invested $2.3 billion in climate solutions. It is one of the best ethical companies to invest in.
HA Sustainable Infrastructure’s (NYSE:HASI) recent performance is a testament to the effective execution of its mission. For the second quarter, the company reported non-GAAP earnings per share of $0.63, which beat expectations by $0.07. In addition, the company reported revenue of $94.52 million.
During the quarter, the firm’s assets under management increased 21% year-over-year to $13.0 billion, while its portfolio grew 27% to $6.2 billion. Returns on new investments made in the first half of 2024 exceeded 10.5%, and total portfolio returns were over 8.0% at the end of the quarter, reflecting the firm’s ability to generate strong returns.
As demand for clean energy increases due to advances in AI technology and the increasing adoption of electric vehicles, the company is well positioned to benefit from the transition from traditional oil markets to renewable energy markets. Its renewable energy investments currently reduce carbon emissions by approximately 8 million tons per year. This combination of effective climate action and solid financial performance suggests that the company is well positioned to continue to thrive in the evolving energy landscape.
HASI total 7th place on our list of the most ethical companies to invest in according to Reddit. While we recognize HASI’s potential as an investment, we believe AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than HASI but worth less than five times its earnings, read our report on the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.
