Rewriting content for a specific age and style
Original copy
The movement of consensus EPS estimates is important to investors, because consistent upward revisions can support rising share prices. Stock buybacks can help this process, as reducing the share count boosts EPS. But during a time of uncertainty, while the Federal Reserve conducts its annual stress tests on the largest banks, buybacks (and dividend increases) may be off the table for the rest of 2023.
In a note to clients on April 18, Bedell wrote that “the earnings impact from higher cost funding, a more liquid balance sheet, and suspension of share repurchase is substantial, and is now more likely to drive an EPS decline this year, in contrast to a ~20% EPS growth outlook before the March banking crisis – and we estimate these factors have reduced longer-term EPS by 10-15% vs. prior estimates, for 2024-25.
Revised copy - Age grade 11-13, AP Style, Conversational tone
The movement of consensus EPS (earnings per share) estimates matters to people who invest their money because when those estimates keep going up, stock prices can also go up. Stock buybacks can help this happen because when there are fewer shares, the EPS goes up. However, during uncertain times, like when the Federal Reserve is doing its yearly check-ups on the biggest banks, buybacks (and increasing dividends) might not happen for the rest of 2023.
In a note sent to clients on April 18, Bedell said that the effect of higher costs, a more liquid balance sheet, and stopping share repurchases is big. It’s now more likely to cause an EPS decrease this year, unlike the around 20% EPS growth people expected before the March banking crisis. Bedell also thinks these factors have lowered the long-term EPS by 10-15% compared to previous estimates for 2024-25.
Original copy
The need for greater transparency in carbon markets
Companies buy carbon credits to offset the amount of greenhouse-gas emissions their business activity generates. Those funds go toward environmental initiatives, including reforestation projects. As companies produce emissions, those projects, in theory, are supposed to reduce their impact.
But it’s not clear if those projects do, in fact, meaningfully reduce carbon emissions. In January, The Guardian published an investigation that found 90% of the rainforest-carbon credits that Verra, one of the largest nonprofits in the industry, issued were worthless because the projects they were tied to did not meaningfully reduce carbon emissions. Verra has contested The Guardian’s report, but Verra has also announced that it will introduce a new methodology for its carbon-credit standard.
Even before the results of that investigation, scientists and technologists in the climate industry had long bemoaned the challenges of bringing quality climate initiatives to voluntary-carbon markets. Some have cited the prohibitive costs for smaller, locally based initiatives to gain verification with an organization such as Verra or Gold Standard. Others have pointed to the need to establish more rigorous vetting standards, which they believe collaboration among various groups — including companies, nonprofits, and local residents — could best help accomplish.
Revised copy - Age grade 14-18, AP Style, Casual tone
Companies buy carbon credits to make up for the greenhouse gas emissions their businesses create. The money from these credits goes to environmental projects, like planting more trees. The idea is that, as companies make emissions, these projects help reduce their impact on the environment.
But it’s not certain if these projects actually lower carbon emissions in a significant way. In January, The Guardian did an investigation that found 90% of rainforest-carbon credits from Verra, one of the biggest nonprofits in the field, were useless. That’s because the projects connected to these credits didn’t really lower carbon emissions. Verra disagrees with The Guardian’s findings, but they’re also working on a new method for their carbon-credit standard.
Even before this investigation, experts in the climate industry were already worried about the problems with getting good climate projects into voluntary carbon markets. Some say the costs are too high for smaller, local projects to be verified by organizations like Verra or Gold Standard. Others think there should be stronger standards for checking these projects, and that teamwork between companies, nonprofits, and local people could help achieve this goal.