Editor's Note: A previous version of this article appeared on Dec. 23, 2024.
Companies with wide moats are difficult to compete with. This advantage is especially appealing when paired with solid management of environmental, social, and governance risks.
In other words, durability and sustainability, which are also called ESG, are natural partners. ESG keeps a close eye on long-term risks that aren’t articulated by traditional finance.
All companies face some sustainability risk, not least because of the industries in which they operate. For example, an oil and gas company will be highly exposed to potential environmental problems, while a consumer technology business will be exposed to social risks like data privacy violations.
Indeed, Morningstar’s research finds that the biggest ESG risk is in energy and utilities, with the smallest in technology and real estate.
A company’s approach to sustainability demonstrates how it anticipates and addresses these long-term risks. Companies that mishandle ESG issues could incur significant economic costs that jeopardize their ability to earn long-term, maintainable profits.
Morningstar Sustainalytics measures this with the Sustainalytics ESG Risk Rating. It considers two main factors—exposure, or a company’s vulnerability to ESG risk, and management, which describes the actions taken by a company to manage a particular ESG issue—and blends them into a single score. The lower the number, the lower the risk.
In the table below, we refined our Best Companies to Own in 2025 list to highlight the ones with Morningstar ESG Risk Rating Assessments of Negligible or Low. This rating is based on the Sustainalytics ESG Risk Rating.
We didn’t include valuations for these companies. Rather, we focused on the criteria that set a company up for success in the long term. So, while not all these names can be considered a buy today, this can serve as a great watchlist.
Here are the 78 companies that made the cut, ranked by their ESG Risk Rating scores. A score of 0.00-9.99 is negligible; a score of 10.00-19.99 is low.
Best Sustainable Companies to Own
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You can explore the ESG Risk Rating of each company under Morningstar coverage in the Sustainability tab of its stock quote page on Morningstar.com.
RELX REL
UK-based RELX REL is a global provider of business information, analytics, and decision-making tools for professionals across industries. The firm generates revenue mainly by creating and selling access to curated information databases, analytics, and journals. Morningstar senior equity analyst Rob Hales assigns RELX a wide Morningstar Economic Moat Rating based on intangible assets, switching costs, and cost advantage.
Sustainalytics gives RELX an ESG Risk Management Rating of Strong. The firm’s CEO has the responsibility to provide updates to the board for the company’s ESG strategy and engages with senior managers on key ESG issues. RELX’s board-level audit committee regularly reviews ethics issues, as well as the systems and controls for preventing and detecting bribery, fraud, and corruption.
Because RELX’s revenue comes primarily from products and services in electronic formats, one of its main risks involves exposure to elevated data privacy and security risks. Noncompliance with data privacy laws and regulations, such as the EU General Data Protection Regulation, could result in litigation and regulatory fines. Furthermore, cyberattacks could lead to operational disruptions and substantial remediation costs.
Danaher DHR
Danaher DHR focuses primarily on manufacturing scientific instruments and consumables in the life science and diagnostic industries. The firm aims to accelerate core growth at acquired companies, including Cytiva (formerly GE Biopharma), by making research and development and marketing-related investments. Morningstar senior equity analyst Julie Utterback assigns Danaher earns a wide economic moat, with “intangible assets and switching costs as its moat sources.”
Sustainalytics gives Danaher an ESG Risk Management Rating of Strong, owing to the board of directors’ oversight of ESG-related issues, “suggesting that these issues are integrated into the company’s core business strategy.” Danaher also has a strong product and service safety program, which requires all employees to undergo regular training on manufacturing practices.
Danaher’s greatest ESG risk is in the area of corporate governance, though this is similar to the average exposure of companies within the laboratory equipment and services subindustry.
This subindustry is also exposed to emissions, effluents, and waste through wastewater discharge and hazardous air emissions during the manufacturing process. Danaher’s biggest ESG controversy was in this area, concerning pollution from a subsidiary’s factory that contaminated local groundwater.
Keysight Technologies KEYS
Keysight Technologies KEYS is the leader in communications testing and measurement solutions. We think it has the strongest and broadest communications testing capabilities in the market across hardware, software, and services. Its wide moat rating, according to Morningstar equity analyst William Kerwin, owes to “intangible assets in the design of test and measurement equipment and software and switching costs for its portfolio of solutions.”
Because of Keysight’s strong ESG reporting and oversight of ESG issues, Sustainalytics gives the company an ESG Risk Management Rating of Strong. Sustainalytics notes that the firm has implemented a strong whistleblower program and policy governing environmental issues and employs solid social supply chain standards.
Keysight’s greatest material ESG issue is in the area of corporate governance, though we think its exposure to this issue is still fairly aligned with other firms in its subindustry.
Sustainable Companies Can Still Have Controversies
A spot on this list doesn’t mean that a company’s sustainability efforts are flawless.
For example, though Sustainalytics has assigned Experian EXPN an overall ESG Risk Rating of Low, multiple data security incidents in the US and Experian’s international subsidiaries have resulted in a Sustainalytics Controversy Rating of Significant. The frequency of these incidents has contributed to operational and reputational risk, as shareholders and customers may lose confidence in the company’s management.
Even so, Experian holds a spot in our catalog of sustainable companies because it is on the right track to improve data privacy and cybersecurity programs. The firm has started reporting to the Sustainability Accounting Standards Board, which is a best practice, and has improved its quality management system to ensure secure data management. It also has negligible risk ratings in the areas of business ethics and product governance.
Sustainable Companies Will Continue to Be Sustainable
Remember, this list is about long-term sustainability, not valuations. For guidance in that area, you can look at the Morningstar US Sustainability Moat Focus Index.
From that perspective, not all the names in this catalog of low-ESG-risk companies with wide moat ratings can be considered a buy at the moment. Still, for investors interested in managing long-term ESG risks, they’re worth keeping a close eye on.
This article is based on the 2025 edition of Morningstar’s Best Companies to Own. Here is the full list of companies and our selection methodology.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
