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7 ethical stocks to watch in 2026: sustainable trading

Interest in ethical and sustainable trading and investing has grown significantly in recent years as market participants increasingly consider environmental, social and governance (ESG) factors alongside market performance.

This guide highlights eight ethical and sustainable stocks to watch, alongside key ESG themes, sector trends and considerations.

Why traders are focusing on ethical and sustainable stocks

Growing awareness of climate change, corporate governance and social responsibility has increased interest in ESG-focused trading.

According to the Global Sustainable Investment Alliance, sustainable investment assets under management reached more than $35tn globally in 2020, reflecting increased institutional and retail participation.

Traders may focus on ethical and sustainable companies for several reasons:

Exposure to long-term structural growth trends
Alignment with ESG themes and market trends
Interest in sectors such as renewable energy, healthcare and sustainable agriculture

However, sustainable companies still carry market risk, and share prices in any sector can fall as well as rise.

Ethical vs sustainable trading: key differences explained

Although the terms are often used together, ethical and sustainable trading are subtly different.

Ethical trading

Ethical trading involves selecting or excluding companies based on moral or social considerations.

For example, some traders may avoid companies linked to:

Tobacco
Gambling
Weapons manufacturing
Fossil fuels

Sustainable trading

Sustainable trading focuses more broadly on long-term environmental and social themes.

This may include companies involved in:

Renewable energy
Sustainable agriculture
Water management
Healthcare innovation

Many traders and investors also assess ESG frameworks and corporate sustainability commitments when evaluating companies.

7 sustainable stocks to watch in 2026

The companies below are commonly associated with sustainability or ESG-related themes. These examples are for general information purposes only and should not be considered financial advice.

1. Tesla: ESG impact, growth and risks

Tesla (TSLA) is a leading electric vehicle and renewable energy company.

ESG themes: electric vehicles, renewable energy
Growth drivers: EV adoption, energy storage expansion
Risks: competition, share-price volatility, regulatory changes

2. United Natural Foods: organic and sustainable food distribution

United Natural Foods (UNFI) focuses on organic and natural food distribution.

ESG themes: sustainable food supply chains
Growth drivers: demand for organic products
Risks: margin pressure, changing consumer demand

3. Weyerhaeuser: sustainable forestry and resource management

Weyerhaeuser (WY) is a timberland company focused on sustainable forestry practices.

ESG themes: reforestation, land management
Growth drivers: housing demand, timber pricing
Risks: commodity cycles, environmental regulation

4. Hannon Armstrong Sustainable Infrastructure Capital: climate infrastructure financing

Hannon Armstrong (HASI) provides financing for renewable energy and sustainable infrastructure projects.

ESG themes: climate solutions, energy efficiency
Growth drivers: infrastructure investment, energy transition
Risks: interest rates, project financing conditions

5. Mowi ASA: sustainable aquaculture and food production

Mowi ASA (MOWI) is a major aquaculture company focused on salmon farming.

ESG themes: sustainable seafood production
Growth drivers: global protein demand
Risks: environmental regulation, supply chain disruption

6. Gilead Sciences: healthcare innovation and access

Gilead Sciences (GILD) is a biopharmaceutical company focused on treatments for infectious diseases and other conditions.

ESG themes: healthcare access, medical innovation
Growth drivers: pharmaceutical development
Risks: patent expiry, regulatory approvals

7. Ecolab: environmental solutions and growth potential

Ecolab (ECL) provides water treatment and hygiene solutions.

ESG themes: water conservation, emissions reduction
Growth drivers: industrial demand, sustainability initiatives
Risks: economic slowdown, operating costs

How to trade ethical and sustainable stocks

There are several ways traders and investors can gain exposure to ethical or sustainable themes.

Trading individual shares allows market participants to gain exposure to specific ESG themes or sectors.

Exchange traded funds (ETFs)

Exchange traded funds (ETFs) provide diversified exposure to multiple companies through a single position.

Examples include:

iShares MSCI KLD 400 Social ETF
US Vegan Climate ETF

Thematic share baskets provide exposure to groups of companies linked by a common trend, such as renewable energy.

ESG considerations and limitations

Assessing whether a company is truly ethical or sustainable can be complex.

Key considerations include:

ESG ratings can vary between providers
Sustainability claims may evolve over time
Companies may face criticism despite ESG commitments
Market performance and ethical positioning do not always align

Key takeaways

Ethical and sustainable trading continues to attract market interest
ESG themes span multiple sectors and industries
Companies differ significantly in their business models and risks
Diversification and risk management remain important

What is an example of unethical trading?

What are some good environmental stocks?

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.