And we can talk about some of the other things that we can get at, but there aren't great hard numbers on a lot of the people metrics. To hear it from a bond investor is always heartwarming, I think, for everybody. What's the value proposition? It's really hard to think about these things and takes a long time. And likewise, it really does matter what's going to happen in terms of that big climate risk, which again, will, we can talk more about, but that is going to be material over that longer term horizon, as is the climate opportunity, right? And as we talked about earlier, valuation is an important component of the overall strategy. At MFS, actually one of the kindest things, again, unprompted was in one of my visits to Japan, where we were seeing some clients there, I was mentioning the fact that my boys love Pokemon. But then there are the stews that take quite a long time. Anything from steel mills, into chemicals, to healthcare, food, and beverage and electronics. We Found Zack Fox's Top Secret Lemon Pepper Wing Spot, Should We Blow Up The Spot. So go ahead find yourself 'something to eat bro go open your {ridge bro this not the fridge this the internet u get what i'm saying.
Again, you can't really rest on your laurels. But that doesn't mean that they aren't important to be working on and thinking about. We want to see all companies have their scope, one, two, and three emissions disclosed.
I think the discussion format is one that's really interesting. Sometimes the ESG investors are extremely loud about what they would like to see, and probably doing more talking than listening. And one of the key things that we look at, aside from integrity and work ethic and the cultural fit, is really adaptability to change. Investors can come in all shapes and forms, so when you're at MFS, we invest with certain philosophy and certain values. That part, certainly the governance part was always pretty much present in fixed income as a whole. I find mfs like you really interesting piece. And the holistic approach comes from connectivity and being able to draw from other areas and having that more generalist view rather than... I think a lot of us talk about this idea of a very open and meritocratic culture where the best idea wins, but I think it's difficult to do in reality but so important in order to make sure that we're not stuck in our eco chamber and that we're really sourcing the best ideas and we are not just being dogmatic, relating it back to your last point. It's not been that many episodes, and we've definitely got really good feedback. I'm not sure you get much time to do it outside of four children, investment markets and now a feral dog at home, but what is the book, article or piece of literature that you have shared or recommended the most? So, it's governance. Past performance is no guarantee of future results.
Well, I love to make a difference, and really I don't manage my own money. Yeah, I think it certainly did, and in a number of different episodes. Again, I'd love your thoughts on that. And I carried that through in terms of our communication, our reporting, as well as some of the tools and tactics that we've used in the kind of corporate sphere as well. What's the number on how a company treats its people? I find mfs like you really interesting and fun. And we've seen with the consumer products companies, for example, we've seen some major announcements and target setting around their plastics, plastics use and the changes to the actual product packaging. But actually, what we do want is high cognitive diversity. So it's really a service that we provide to our clients. So that's the kind of stock where it fits very well into the strategy I manage. So for me, what I think is different, and when you think about sustainability as well, is being able to have that holistic approach. Give us a potted history. In general, again, any asset class within fixed income is being able to understand, what are the right questions for that particular issuer at that particular point in time? And I think you're right, we're trained actually to be reductionists in our thinking.
On the excitement side, you know, I think there are so many changes that we're gonna see in all these different areas that we've talked about, but the one that I think cannot be understated, is on the climate side. Their steady margins and return profile over an extended period of time is representative of the pricing power that they have, and the excess returns haven't been competed away or new entrants coming in or negative price adjustments. The other side of that is the risks and the risks associated with pricing power. You have to assemble the team in a completely different way. I think that sustainability, it's funny because the existing focused sustainability for fixed income often was part and parcel of what we do because we only really have downsides. I find mfs like you really interesting facts. SoundCloud wishes peace and safety for our community in Ukraine. So a company has to ideally increase profits enough to cover higher capital investment costs into the future and not just the higher operating costs that they see within the next one or two years. But again, does that temptation ever come in to look at some of the controversies and look the other way? And he's like, " I hear you, and maybe it is, but I really, really think you should spend some time in finance.
So, again, these are just some of the ways that the last piece on the supply chain, was some of that unstructured data. It seems very clear to me that those companies that have the ability to manage this pricing power or to manage inflation better and maintain their pricing power margins and increase that through this are going to stand out and we need to be focused on those businesses and avoiding the ones that are going to struggle. I was going to say, I think we have parallel trajectories there. In fact, for some of the highly coveted brands, the scarcity value, or at least a perception of scarcity can mean that higher pricing coupled with a perception of increased value for the product can actually lead to higher demand over time, even when pricing is increasing quite significantly.
Yeah, super interesting. But there's also an opportunity, and I say this as a fixed income person where we usually don't have a lot of upside. I remember reading somewhere, it was in a mainstream newspaper, that I think it's the Great Pacific Garbage Patch, you know, one in 40 pieces of plastic bottles belong to one specific, very large beverage company. Still related to sustainability, but then ended up coming back in this role in our sustainability team. Above everything else, those are the two most important buying criteria, and price is much lower down on the list.
The other side of that is on the supply chain. And if you do have any questions you'd like us to cover, we'd love to hear from you. One area within chemicals that comes to mind is the flavors and fragrance industry. It's just like a personal vibe u feel me. You've been very generous with your time. So there's a whole host of types of work in order to really implement the top-down, but the top-down is necessary in order to be a catalyst to get the work going.
Pilar Gomez-Bravo: Connectivity is hugely important and being able to bring knowledge from other areas to whatever the discussion is at hand is really important. But this is a very broad issue now. Well, we talked before about getting some outside voices. And again, let's just again, maybe this draws on your experience in Silicon Valley in the technology field, but again, this is now it feels like a field that's so dynamic, it's changing so fast and the science is, you know, not fully baked yet in, in my view. That's how trading desks really make money. It's not like if they just wanted to, they could become this carbon-free business just by turning a switch. So I think that's definitely helped me bring some things to the team that perhaps I wouldn't have encountered if I'd have stayed in the world of finance. I think that, again, you have to try not to miss the forest for the trees. Another major theme for me was what Barnaby brought up, and he phrased it as "excessive short-termism. " Because it's an industry where you're managing people's money, you have to be very thoughtful. I thought that was fascinating, and I don't think I'd actually heard of that kind of bottoms-up application.
They get good support in terms of training and how to install the products as quickly and as efficiently as possible, and a quick response if things ever do go wrong. And this is where there's different philosophies, I think in terms of science-based targets and net-zero, where there is still you know a lot of work to be done, frankly, in terms of you're back to that, you know, what we still need to see happen so for the whole planet, we can get to a much different place with our emissions. It's not just about pricing and ability to put up pricing. What gets you out bed in the morning? There could be new tariffs that come in place, you could have higher energy costs within that region that you are manufacturing, higher wage inflation or the ability just to source the raw materials that you need to produce the goods and services that you're providing.