Morgan Stanley highlights four stocks that are rising stars in the world of ESG investing

Published Thu, Mar 9 202311:36 PM ESTUpdated Fri, Mar 10 20239:47 AM EST

Morgan Stanley's list of the biggest rising stars in the socially conscious investing space includes four U.S. stocks. The firm compiled its top picks among what it calls "rate of change" stocks within the environmental, social and governance realm, analyst Stephen Byrd said in a note to clients on Monday. A majority of the highlighted stocks from North and South America are traded in the U.S. "Rate of change" refers to a framework used to find companies that are making socially conscious advancements that can also help their respective business models. Rather than screening for those already considered leaders in the ESG space, the focus in on those that are up and coming and may have their socially conscious work overlooked. These are four top "rate of change" stocks for the Americas that are traded in the U.S. Morgan Stanley said the strong guidance for Deere 's 2023 fiscal year show it can gain momentum over at least the next three to six months. The firm also said management commentary implied the large agriculture cycle could remain strong through the 2023 fiscal year and continue through 2024, which would disprove the argument that the company is too cyclically oriented for investors to increase exposure in the near term. Deere has underperformed the S & P 500 this year, down 1.7% compared with the broad index's 2% advance. But the stock hugely outperformed last year, rising 25% while the S & P 500 dropped 19.4%. DE 5Y mountain Deere & Co. Another name listed by Morgan Stanley is Eastman Chemical . The materials company noted that all the major equipment has been installed in its molecular recycling factory in Kingsport, Tenn., which it expects to have running by mid 2023, the bank said. The company is hopeful that plant will lead to the creation of similar facilities in France and another, yet-to-be-disclosed city in the U.S., the firm's report said. Management estimates that the Kingsport plant will have a 15% rate of return for the company, while the other plants will likely be closer to 12%, Morgan Stanley said. Eastman fell 32.6% last year. The stock is up 1.4% in 2023. New Fortress Energy , on the other hand, saw its shares surge 75.7% in 2022, but has lost 22% this year. Late last month, the company reported adjusted earnings per share above the consensus estimate of analysts, while its revenue and adjusted EBITDA came in below analysts' expectations, according to FactSet. EMN NFE 1Y mountain Eastman Chemical Nu Holdings , a Brazilian digital banking company that trades on the New York Stock Exchange, also made Morgan Stanley's list. The company's shares are up 16% this year, regaining some ground after plunging 56.6% in 2022. Warren Buffett's Berkshire Hathaway invested $500 million into the bank in 2021 .That was also the year it went public through one of 2021's largest initial public offerings. — CNBC's Michael Bloom contributed to this report.