Shareholder return isn't the only thing on investor's minds nowadays. Carbon footprints, community enrichment, and corporate diversity are now more crucial than ever, with growing consumer awareness fueling a shift toward ESG investing. ESG investing considers a companies environmental, social, and governance policies alongside its traditional financials. ESG investing is also known as sustainable, responsible or impact investing.

Before the pandemic, the shift toward ESG investing was well underway. But, as an unprecedented natural disaster, Covid-19 also raised fears of climate change, according to research from JPMorgan.

In response, governments and major companies are putting climate change at the forefront of their agendas. This renewed focus on sustainability, especially by policies under a President-elect Joe Biden's upcoming administration, means that ESG will be a central theme in 2021.

ESG Expected to Hold Momentum in 2021

Inflows into ESG funds are up 102% year to date. Strategists at Morgan Stanley expect this momentum to carry forward into 2021. The firm expects green stocks to fare well as governments in North America, Asia, and Europe renew their focus on climate change. But, the firm notes there may be a pause as in momentum as investors anticipate "the next wave of opportunities."

Although political momentum isn't the only factor that will make ESG a vital play in 2021, demographic shifts will play a part as well. Analysts at Bank of America found that 4 out of 5 "Gen Zer's" use ESG criteria when making investment decisions. As this incoming generation grows in financial heft, it seems ESG isn't just a play for 2021 but for perhaps for the next decade.

ESG Stocks and ETF's for 2021

Morgan Stanley's top ESG stocks fall into 3 broad themes: Decarbonization, Sustainable Consumption, and Structural.

Stocks that play what Morgan Stanley calls the "global decarbonization trend," include names like energy-technology company Siemens Energy (SIEGY  ) for its exposure to renewables and gas, Covestro (COVTY  ) for being a leading producer in insulation foams for buildings and electric vehicles, AES (AES  ) for its development of renewables and storage, and Aptiv (APTV  ) for its rising focus in electric vehicles.

Sustainable Consumption names picked by analysts include agricultural equipment manufacturer Deere (DE  ) and aluminum-beverage-can producer Ball Corp (BLL  ); both companies will play a major factor in sustainable farming and post-plastic consumption.

Morgan Stanley's picks for what it called over structural plays that are expected to growth within the theme of sustainability and ESG include French asset manager Amundi (AMDUF  ), testing and inspection specialist Bureau Veritas (BVRDF  ) and data analytics company Verisk (VRSK  ).

Stocks aren't the only way to make an ESG play. ESG focused Exchange-Traded Funds (ETF) are excellent way to embrace the strategy and avoid single stock risk.

Here are some of the top performing ESG ETF's over the last 3 years: Invesco WilderHill Clean Energy (PBW  ), First Trust NASDAQ Clean Edge Green Energy (QCLN  ), iShares Global Clean Energy (ICLN  ), Invest Cleantech (PZD  ), iShares MSCI Global Impact (SDG  ), First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index (GRID  ), and iShares MSCI USA ESG Select (SUSA  ).