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Investing in Sustainable Growth: Q4 Newsletter.

In the latest newsletter from the Fundamental Growth & Core Equity team, Chief Investment Officer Mike Solecki considers the impact of economic uncertainty on prospects as central banks try to engineer a soft landing. In a soft landing scenario, equities will ultimately benefit from lower inflation and an expectation of easier monetary conditions as economic conditions worsen and recession takes hold. He notes that the team’s focus on quality also provides a defensive element for strategies in the event that a hard landing scenario unfolds.

The two main articles in the newsletter provide insights on where the team is seeking opportunities in the current environment:

Avoided Emissions: Enablers to a Net-Zero Economy Avoided emissions are emission reductions that occur outside a product’s life cycle or value chain but result from the use of that product. It gives organizations a pathway to report on more efficient products (goods and services) replacing less efficient alternatives. Avoided emissions have become important for an organization in assessing their overall environmental footprint, which enables them to identify and develop better sustainability strategies. Through our climate transition strategy, the Fundamental Growth and Core (FGC) equity team at State Street Global Advisors tries to identify companies with innovative business models that can contribute to transitioning to a low-carbon economy. Companies that disclose the avoided emissions of their products are frontrunners for decarbonization as they act as enablers for other companies to transition. The FGC team has developed a proprietary scoring mechanism to identify such innovative business models for its climate transition strategy.

Experian: Growing Beyond Traditional Bureau Business Through Innovation Credit scores play an increasingly important role in our personal lives. The use of credit scores is not limited to decision-making in consumer credit (mortgage loan, auto loans, credit cards, interest rates etc.), but also extends to decisions on eligibility for rental housing, homeowner insurance, and in the job-hiring process. Experian is the world’s leading multinational consumer credit reporting company with 44% revenue share and has been expanding the market and its business via innovative new products. The company scores well in the FGC Team’s Confidence Quotient framework and in this article we take a closer look at its potential.

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