The early days of bitcoin saw first movers position themselves to take advantage of an ideology that the mainstream didn't necessarily grasp at the time. Remember that the famous story about paying Bitcoin for 2 Papa John's Pizza's (PZZA) likely still haunts the person who did it. Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered pies. Fast forward a few years, and that pizza order is worth around $560,000,000. Who knew Bitcoin would've grown to the levels it has? Well, in short, many of the early adopters did, and they positioned themselves early. 

Now, I get frustrated with stories like this, but it's important to understand that not all "early opportunities" are worth it. Had things like DeFi and digital currencies got completely abolished, we wouldn't be talking about it, and the "early adopters" would be another group of pie-in-the-sky thinkers. But there is something to say about doing research and reading between the lines looking at the long-term. It's also important to follow the money. While gamers were the real "first movers" in Bitcoin, using it to purchase in-game assets, larger investors started coming into the cryptocurrency market shortly after. Among these are names like Cameron and Tyler Winklevoss, who've also established positions in numerous digital assets and cryptocurrency exchanges. You've also got former hedge fund managers like Michael Novogratz, who envisioned the potential of digital currency. In fact, in 2017, Novogratz estimated that roughly 20% of his net worth was made up of digital assets.

What Will Be The Next "Bitcoin"?

What's the point? The right amount of diligence and understanding of the true potential of a trend can lead to a strong investment thesis that can turn into a considerable windfall in the stock market. Right now, terms like socially responsible investing and ESG are being thrown around a lot more. But what does it all mean, and could it be the next big trend in the stock market? While the latter is something that we will see as the market evolves, the former is a bit more easily defined. ESG stocks are those with underlying companies that focus on a set of different socially responsible initiatives. ESG focuses on companies that seek to adopt environmental, social, and governance improvements that reflect positively on the corporate structure and the community around the companies. 

There isn't necessarily a problem with this at all, but there isn't a clearly defined set of metrics that say a company is an ESG stock or not. Some reports said that companies, including Philip Morris (PM), could be ESG. No offense to Philip Morris, but a company focusing on offering products linked to cancer is a difficult one for me to put in the ESG basket. Needless to say, there are some aspects of Philip Morris' business model that do meet the ESG criteria. 

On the broader level, however, many investors are equating ESG with green and alternative energy stocks. These range from solar power penny stocks to large-cap hydrogen fuel cell companies. You've also got mining companies that are focusing entirely on ESG initiatives. On CNBC this week, Freeport McMoRan (FCX) discussed how it's working to decrease its carbon emissions in light of expanded copper mining efforts that the company is taking on. This plays right into another industry that ESG investors are looking at, Electric Vehicles. Obviously, companies like Tesla (TSLA), Lucid Motors (CCIV), Nio (NIO), and plenty of others are ramping up production. Copper demand is up because of the boom in EVs, among other industrial and reopening trends.

You've also got the backdrop of government funding helping to boost development in green energy. The Biden administration outlined its plan for a carbon-neutral future. According to the U.S. President's infrastructure plan, "Biden will make a $2 trillion accelerated investment, with a plan to deploy those resources over his first term, setting us on an irreversible course to meet the ambitious climate progress that science demands."

ESG Stocks To Watch Right Now

So let's focus a bit more intently on a few of the potential ESG stocks to watch right now. First, the green energy stocks are some of the most easily understood ESG names. You've got companies like Plug Power (PLUG), FuelCell Energy (FCEL), and NexGen Energy (NXE) gaining steam this year. You can also look at the solar energy stocks like ReneSol (SOL), Sunworks (SUNW), and Jinko Solar (JKS).

But what about other companies working toward a more "ESG friendly" model. I mentioned Philip Morris above. This was an example of a company you might not consider ESG making attempts to shift in that direction. With that, you might be asking, "Can't any company be somewhat ESG?" I'll leave that up for debate, and you can comment below. But the fact of the matter is that there are plenty of companies working to meet certain ESG criteria. Take, for instance, American Express (AXP). The company isn't providing green energy, but it does fit into the "G" and "S" categories. American Express' approach to corporate governance and developing human capital have made it one of the stronger ESG stocks among names within the finance industry.

Cisco Systems (CSCO) is another not-so-obvious ESG stock to watch. The company has actually put forth a commitment to meeting ESG principles. Another company that meets the criteria for social and governance, Cisco, has created an open environment built on the principles of collaboration and fostering human capital growth. Cisco has also put further effort into identifying opportunities in clean technology.

Also, think about consumer stocks. Coca-Cola (KO), 3M (MMM), and others are all putting their foot forward to adapt to the growing trend in ESG. Coke, for instance, ranks high on the list for how it handles waste and manages its carbon footprint. On the flip side, 3M has used its cash to reach its ESG goals. The company has pledged to invest $1 billion toward new water and climate initiatives. 

Should You Buy ESG Stocks Right Now?

You'll be the one to answer this question. However, ESG seems to be a buzzword that continues receiving attention. Whether or not it's the next trend to explode like bitcoin will be seen as things progress. In the meantime, as they say, the trend is your friend. It's definitely still a new trend to keep track of, and the specific definitions remain ambiguous. But as all things "buzzword" seem to be, the ESG trend will probably be a sticky topic for a while.