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Market Update

9 Top Sustainable Stocks That Are Undervalued Now

After a rough start to the year, sustainability leaders including Adobe, Salesforce, and Disney are trading at discounts.

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Strategies focused on sustainable investing have languished this year, following the decline in technology stocks while largely missing out on the energy rally. However, there is some good news: Companies with leading sustainability practices such as Adobe (ADBE), Salesforce (CRM), and Aptiv (APTV) are now trading well below their fair value estimates.

The Morningstar US Sustainability Leaders Index--a collection of 50 U.S. large-cap stocks with the strongest environmental, social, and governance risk scores--is down 14.7% year to date as of April 18, 2022, 6 percentage points behind the Morningstar US Market Index. As large- and mega-cap tech companies are heavily represented in the sustainability leaders group, the index fell more closely in line with the Morningstar US Technology Index, which lost 16.9% during the same period.

Lauren Solberg does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.