The World Economic Forum’s Annual Meeting took place in Davos from January 15 to 19, 2024. This meeting piqued the interest of many investors for potential ESG investments that could rally.
Global leaders gathered to discuss cooperation and solutions to challenges such as climate change, AI, and global growth. There was a strong emphasis on the urgency of resolving these issues, which could become a catalyst for these ESG investments moving forward.
Therefore, let’s examine an overview of the meeting with three ESG investments that could stand to benefit.
Global Security and AI Governance Investments
A major focus of the meeting was on global security and AI governance. For better or for worse, AI is capable of catalyzing mass societal upheaval. Specifically, AI is now partially or fully replacing many jobs that were previously done by humans.
Also, increasingly tense security situations among China, North Korea, Russia, Iran, and the U.S. were discussed. Further, cybersecurity was a large part of this discussion. An incredible $9.4 trillion is expected to be lost via cybercrime in 2024.
Armed with this information, companies developing ethical AI frameworks and governance policies could be a good fit. These include stocks such as Microsoft (NASDAQ:MSFT), and IBM (NYSE:IBM). And on the cybersecurity front, CrowdStrike (NASDAQ:CRWD), and Fortinet (NASDAQ:FTNT) could also be viable options.
Sustainable Economic Growth Initiatives
A call for a “new paradigm of prosperity” was issued by some speakers at the forum. This approach balances productivity, equity, and sustainability into a new economic growth model. More broadly, this means that it could raise the valuations of companies that are involved in emerging trends. Those include the circular economy, ethical sourcing, and social responsibility measures.
The impact of AI was a major theme of the forum, which also bled into this key theme. Participants discussed ways to reach an equitable distribution of benefits and enhance gender parity.
With these developments in mind, a few stocks that could benefit from this increased focus on sustainability include names like Unilever (NYSE:UL) and Procter & Gamble (NYSE:PG). Both brands promote sustainability as part of their modern core ethics. Also, they make strides in creating robust supply chains. They heavily emphasize recycling and using biodegradable materials whenever possible.
Climate Change Solutions and Equitable Energy Transition
Speaker Ajay Banga’s referenced an “existential climate crisis.” Further, he highlighted themes of climate change and best ways to prepare the world for an energy transition.
Investments in renewable energy projects and energy efficiency solutions will come into renewed focus. Also, it includes the development of storage solutions like battery technology and smart grid systems that some companies are successfully pioneering.
The good news for investors interested in ESG investments is no shortage of companies from which to choose. Many of the companies are developing sustainable energy generation methods. And, they are investigating best methods to prepare and preserve the output generated for a minimal environmental impact.
Two companies that fit the bill for climate change solutions and an equitable energy transition include Enphase Energy (NASDA:ENPH) and Schneider Electric (OTCMKTS:SBGSF). ENPH focuses on developing energy generation solutions using solar power and battery storage technology. SBGSF focuses on energy management and automation solutions. The latter are crucial for efficient energy use and smart grid development.
Both brands could experience tailwinds, as the WEF is known for influencing the policies of governments around the world. Thus, these are potential ESG investments to watch.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
