Dividend and Conquer

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Hi there,

It’s been a week of big meetings if you follow climate, finance, and economic news, and our FWIW writing team traveled the globe (via the interwebs, and while holding fall mugs) to bring you a few highlights.

First stop: Washington, DC, where the much-anticipated Federal Reserve meeting ended predictably with another 75-basis-point interest rate increase. Watch for rates to keep on climbing — the Fed signaled that it may bring them as high as 4.6% in 2023 in its fight against inflation. Rising rates are expected to take a toll on earnings and the economy as a whole, so expect more herky-jerky moves from the market in the months ahead. A few things to keep in mind during these times:

• Remember the key financial rules that experts continue to repeat to us, like staying invested in a diversified portfolio and focusing on your long-term investing goals.
• As you know, timing the market is extremely hard, and historical data shows you can lose out if you pull out and sit on the sidelines.
• We’ve found these past stories on inflation and recession fighting strategies really relevant these days.
• To continue to help you understand all the elements to consider when investing, we dive into dividends later in this newsletter.

Next, we travel up to the Big Apple, where Climate Week NYC has drawn a crowd of environmentalists, public officials, executives, and even actor Matt Damon (who’s hoping you forgot about that crypto ad). The event has brought a wave of sustainability announcements from the likes of Amazon, Anheuser-Busch InBev, and GSK, along with a new report from Climate Impact Partners that shows 63% of Fortune Global 500 companies have set carbon neutral, net-zero, or renewable electricity targets for 2050. For those who couldn’t make the trek to NYC, Business Insider’s Live Blog will keep the FOMO at bay.

Another big meeting across the Atlantic will have major implications for sustainability-minded investors, though we expect it has fewer celebrity cameos. In Frankfurt, the International Sustainability Standards Board (ISSB) is ironing out the details of its new climate-related and sustainability-related disclosure standards, which are expected to make it easier to compare ESG performance across companies. If you want to know more, you can find a primer on the ISSB in our guide to ESG frameworks.

News you can use

• Silicon Valley is stuck in a long drought, and we’re not referring to dry conditions. Yesterday marked 238 days without a tech IPO worth more than $50 million. That’s the longest drought in new US IPOs this century. Stock market debuts are dwindling due to the risk-averse mood in the market, limiting the number of public sustainability-focused companies most investors can invest in. According to FactSet, 1073 companies IPO’d in 2021. In the first half of 2022, it was just 92.
  
• Want your assets to be a part of the solution, not the pollution? Green robo-advisor platform Carbon Collective just launched a new ETF that contains around 200 companies with at least 50% revenue from climate solutions. It is early days and you should always do your research before investing, but what caught our eye was this comprehensive list of holdings that allows the reader to easily scan climate solution stocks and descriptions of their businesses. In this area, Morningstar’s look at ETFs with significant exposure to climate action is also a good resource.
  
• The year after median pay of top CEOs hit a record $14.7 million, shareholders rejected compensation plans for record numbers of companies, according to PwC. The number of failed votes in the S&P 500 and Russell 3000 indexes this year were 21 and 71, respectively. Analysts warned that shareholders expect any pay metrics, including those like ESG, to be clearly linked to the company’s fundamental strategy. Next year companies will have to reveal more about their decision-making process when new rules come into effect.