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JPMorgan highlights cybersecurity names that could see a boost under ESG investing

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FireEye information analysts work at the company's office in Milpitas, California.
Beck Diefenbach | Reuters

Investors weighing strategies that consider a company's environmental, social and governance policies should turn their attention to cybersecurity, according JPMorgan.

This is especially true in the wake of work-from-home policies and high-profile data breaches — including the SolarWinds hack — which can cause a stock to sell-off and inflict reputational damage on the company.

The bank categorizes cybersecurity under the "social" factor of ESG investing.

When assessing the potential threat of a cyber attack, investors need to consider certain factors, including a company's geographical footprint, the firm said.

"Investors typically examine a company's policies on data protection and information security systems as a way to assess a firm's cybersecurity risks," JPMorgan wrote in a note to clients.

"However, this is incomplete without factoring in geographical and geopolitical data. Foreign territories can initiate cyberattacks on organizations" the firm said.

As companies beef up their security spending, JPMorgan highlighted several stocks that stand to benefit.

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