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So there's a lot we can unpack here and a lot we can get into. These are products and solutions that are going into electrical systems for buildings, whether it be commercial or residential. So I think we can be fairly slow to react to some market changes, but I think it's because the firm really wants to do what's right and people are very keen here to do what's right as opposed to what's easy.
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Again, talking about change is, when do you give credit to a management team that they really are keen to be a partner in developing solutions for climate change? 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? 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. Stream i find mfs like u really interesting bro by groovy bot | Listen online for free on. I'm a big believer actually in the power of peer mentoring or peer learning.
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One of the big differences between a science-based target and a net-zero approach is the use of carbon offsets. We are going to look to close out season one of All Angles by taking a look back at some of the previous episodes and some of the key themes that have emerged for us over that period of time, and also reflect on what was missing or what we should do next as we plan ahead for season two. We talked about climate in particular, I mean, the IEA, the International Energy Agency, which makes a lot of these forecasts, I think it's estimated that like, to your point, 50% of the emissions reduction that we're going to need is going to come from technologies and solutions that are today in a prototype state. So they've gone through all these, and they're really in the, the Act phase. And so there are tremendous risks sitting right in front of us, and unbelievable opportunities. And we also very much appreciate the net-zero target setting, which again, also gets us to that 2050. I find mfs like you really interesting. Nicole Zatlyn: Sure. The markets are well-trodden to identify something that somebody else hasn't really thought about. No forecast can be guaranteed as performance is no guarantee a future result. Well, yes, definitely. You and I read a lot of books in this space, and we've definitely been influenced by people who take a very systems approach and who would advocate that actually more systems, top-down systems thinking needs to occur in the finance system in order to really understand sustainability and some of the forces at play. And that kind of spend creates tremendous opportunities.
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Or again, an experiment about how much debt we live with in the world, that it hasn't always been the case that we've had all this debt. I grew up in Canada. So it's that you're protecting against the risk of not having a great culture. From there, went into the asset management side and joined MFS about 10 years ago. So maybe a question before we get into materiality is how do you look to build sort of an analytical edge of some of those topics that can be inherently really intangible or hard to fully quantify? Ultimately, you as an active investor, get paid to help price future risk and return. Sometimes they can actually increase in value for certain products. I think a lot of the time we learn from those like us. Maybe not the absolute kindest but a kind thing that someone has done for you? It's not been that many episodes, and we've definitely got really good feedback. Sometimes management, as you would expect a lot of the times, they will have their scheduled points that they want to tell you that somebody has drafted for them. And I think even other themes that often relate back to this idea of embracing complexity, which is what makes the field really interesting to work in. I find mfs like you really interesting times. Given the complexity, given the nuance, given the fact that the subject is likely to prey on some of our worst kind of unconscious biases or behavioral traps, the power of the team and the power of the collective can really help us get to a much better outcome than any one very, very smart individual can. Yeah, super interesting.
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Nicole Zatlyn: If I could sum it up in, in one sentence, climate is the biggest risk for many of our investments. You mentioned upfront, one of your roles and one of the responsibilities, I suppose, that you have is as a leader within the fixed income department and helping grow the team, build the team, nourish the team culture that is here. So, you know, I am very excited about these changes, and the opportunities that many of the companies will have in front of them to be major players in the area, in the climate space. You make decisions very quickly in a startup. I find mfs like you really interesting facts. Above everything else, those are the two most important buying criteria, and price is much lower down on the list. The right tool for the right job, I really like that one. And it's re-identifying in these sectors that are not so obvious, those companies where you do want to bet and partner with them, to take on the journey towards again, a better E, a better S, and a better G. I'm glad you used that word, courage.
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So instead, my strength was really kind of digging into companies and using what I learned from companies and their experiences, which is what I was familiar with doing, to piece together at a systems level where I thought the system would go. But I think a lot of the times, at the end of the day, really, it is new for them as well; how to handle investment questions, how to handle the wall of eager discussions. For next season, in the absence of feedback from our listeners -- So again, please email us if you would like to hear something different -- but maybe getting some more outside experts and people from outside of MFS talking about the different approaches that they're taking, going deeper on some of the sector-based pathways on the complexity therein of applying this in real time. But certainly now, we see it all the time with companies, those that are investing ahead for the climate transition, which we are all a part of, and those that are, you know, simply not and continue to do business as usual with massive emissions and other things we'll get into. I was going to say, I think we have parallel trajectories there. You said some of your formative years were spent at Lehman Brothers, which I'm sure was a bit of a roller coaster ride. And so these dialogues are really robust. David Falco: I guess a couple of things really come to mind now. I think an argument could be made that actually the sustainability or ESG investing is a symptom not a cause, and the root cause really is kind of pervasive short-termism that is leading to these unsustainable outcomes over the medium to long term, which we're now manifesting themselves, which is really interesting. It takes being able to, with patience, explain why it's important to combine sustainability with the business aspect. What do you think we missed, and what should we maybe focus on for next season?
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How do you avoid that and avoid getting drawn into these sort of potential areas of noise or frenzy or bubbles? I might come to you for tips on that. Ever since then, we've been engaging very closely with them around some of those issues. And thank you everyone in the audience for listening. The thing that keeps me so passionate and so excited is that the market provides us with challenges every day and we have to navigate those challenges for the benefit of our clients. Or do you keep going back to the watering hole of that courage of conviction to keep looking at some of those names that yes, there may have been controversies in the past, but actually we can see that there's a direction of travel or there's potential upside if that business starts to move in the right direction on some of these factors? I ain't gon lie this spot kinda like a personal thing to me you get what 'm personal saying. We believe in long-term fundamental investing. David Falco: All of that accumulated CapEx into infrastructure assets provides a very large moat around the business, which is very, very difficult for anyone to replicate.
It's an opportunity, too. That is actually the beauty of portfolio construction is to require a minimum level of threshold to be able to make those decisions that you have to make on a more agile fashion, but understand that you have to have the nuanced approach and the flexibility. It's been such a pleasure. Pilar, just before we dive deep into sustainability and fixed income, I'd love to learn a little bit more about you, or share more with our listeners about you.