Vish Hindocha: Hello and welcome to the All Angles podcast, where we look to unpack the wonderful world of ESG investing. One conversation at a time. The views expressed are those of the speaker and are subject to change at any time.

Disclosure (Audio): The views expressed are those of the speaker and are subject to change at any time. These views are for informational purposes only and should not be relied upon as a recommendation to purchase any security nor is this solicitation or investment advice from the advisor. No forecast can be guaranteed. Past performance is no guarantee of future results.

Vish Hindocha: Today I'm joined by Pooja Daftary, who is an ESG research analyst based in our Singapore Office at MFS. We talk about lots of things. One of the things I found most fascinating was asking Pooja about how to marry systems thinking with very fundamental bottom-up analysis, and I hope you find that insightful too.

We apply that specifically to natural capital and nature's impact on companies and how investors are thinking about assessing that impact on the capital allocation decisions. Natural capital and biodiversity loss is an extremely fascinating, important, pertinent topic at the real frontier of sustainable investing, and I'm sure it's a theme that we'll be talking about much more in the years to come.

It's certainly one of the topics that is closest to my heart in terms of where my research spend goes today. I hope you enjoy the conversation. And don't forget that you can subscribe to All Angles through Spotify, Apple Podcasts, or wherever you choose to get your podcasts from.

And if you do have any questions, you'd like us to cover in this introduction, please do get in touch by emailing us at AllAngles@mfs.com, we would love to hear from you. Pooja, welcome to the show.

Pooja Daftary: Thanks, Vish. Pleasure to be here.

Vish Hindocha: For the listeners, I first met Pooja, so Pooja I knew you through reputation through some of your work, but we first met in person at the PRI in-person conference in 2018, where you were on stage and you were genuinely one of the most dynamic and engaging speakers. So, I am very excited to be here today because every time we have an interaction or I see you speak on something, I always come away slightly more informed and illuminated on an element of what we do. So, really appreciate you coming out this time to join us today.

Pooja Daftary: Absolutely. Thank you Vish.

Vish Hindocha: I want to begin this conversation where we normally begin with a little bit about you, I'd love to find out how did you get here into this role as an ESG analyst on our platform? What are some of your highlights along your journey so far?

Pooja Daftary: Gosh, it's been a long journey with MFS. I just finished 10 years and I joined the firm in 2009, during the GFC financial crisis. I joined as a research associate in the Boston office, and I remember because Ted Maloney, who is now a CIO, was my hiring manager back then so, it really was a long time ago. And yeah, I mean, I joined as really very green research associate on consumer staples, cap goods. I did three years in the Boston office working with two fairly large teams and then thought I wanted to take a break and revisit what I wanted to do with my life. I'd always aspired to get a master's degree so, I decided to go to business school.

And very soon after arriving in business school, I realized that I didn't actually want to explore all the different options out there and that MFS is really good, is great and especially the culture. The more I spoke to my classmates and heard about other firms and I felt how lucky I was with what I had at MFS. And sometimes you have to leave a place to realize how and explore a little bit to realize how lucky you are to have been there in the first place. And so, I think it was in a matter of two months or something that I just called Ted back. And I was like, okay, I think I'll come back now. I've done my exploring, but yeah, so I rejoined the firm as an analyst and this time in the Singapore office where I was covering healthcare and autos.

It was a really interesting time to be doing both of those because Asian health care had a lot of stocks that were uncovered and so, there was lots of ground to cover. So, in that three-to-four-year period that I was in Singapore, we'd been hearing more about ESG integration and ESG at the firm. Rob Wilson had been doing a fabulous job with creating really good content, socializing it with the team but I had never really considered leaving the investment analyst role to do something else. But when that opening came up, Simon Gresham, who's the CIO for Asia, brought it to my attention to say, look, this is the work that you do anyway, most of the time it's part of your thinking, thinking big picture about social and governance and environmental issues and so, would you consider this role?

And the main reason I took it, actually, there were two reasons. One was that I felt like MFS was one of the few firms that wasn't separating the ESG role from the investment role. There was a reason why they were looking for a traditional equity analyst to take on that role so that you had that investment view deeply ingrained in your ESG process. And I thought that was a very unique and differentiated way of doing ESG than what I'd been hearing about in the market. The second was, the people that I spoke to, who I knew were deeply bought into the process, endorsing it was Ted actually, Allison O'Neil, people that I'd worked with when I was very young in my early days at the firm and these were now the people of course, a lot more senior now, but who were driving the ESG strategy and ESG integration and I had implicit trust in them.

And so, I felt, I want to work with this really great group of people again, it's where I started my career, it's where I want to be now, it is clearly an important role, an important piece of work for the firm so, I might be able to add more value doing this, given that I've worked in a number of different offices with lots of different teams and I've been in the firm for a long time I understand the personalities, the culture and the ESG role does require you to wear lots of different hats.

It requires you to have some tricky conversations sometimes with different people and need to know them and how to have those conversations. And it needs you to understand what motivates investors, what makes them tick and how do you integrate something that was relatively not new in that, I think we've been doing sustainability thinking for a long time, but some of the processes were newer and to introduce those processes to the team, I think required that kind of relationship and yeah, so that was the main reason I took the role, sorry. That was a very long answer to-

Vish Hindocha: No, that's great. It's very rich. I almost want to ask what Ted's reaction was two months after you started business school and you wanted to come back, I'm sure he was thrilled. You just mentioned right towards the end that your role now, it requires one where you wear multiple hats, it's multidimensional, you have to think about lots of things. It hit me that we've dived straight in and assumed that maybe the listeners know what your role is. I wonder if you would just describe what does a typical week look like for you, Pooja right now?

Pooja Daftary: I mean, would it be really cliche if I said that there's no typical day.

Vish Hindocha: Yes.

Pooja Daftary: Well, I have to, okay. Maybe one way to answer that question is to compare it to my old role because back then, as an investor, you're covering stocks, it was going really deep into companies and you covered a set of stocks for a long time and you were that specialist in a particular stock so, you felt like you had to know everything about that company. And in the ESG role, you are enabling people that cover stocks so, I used to cover stocks to make better decisions about those stocks by taking that 30,000 foot view, stakeholder view if you will and incorporating the ESG considerations into their decision making process and what might seem to be very nebulous issues sometimes or what I hear people commonly saying, Oh, these are tail risks or tail opportunities, doing the work to demonstrate if that is actually the case, that they are not tail risks and helping people to integrate it into their evaluation and their thinking process.

And so, to that extent, it is different in that I'm much more of an enabler now than coming up with all the answers to the investment decisions myself. And so, to be an enabler means the mix of work is different. I'm not necessarily an expert in every company or issue that I'm working on. I need to be focused on the key sustainability issues for those industries and provide frameworks, provide context and maybe some starting research for the investors to take it, make it their own and then use it to really embed it in that bottoms up work that they're doing.

And so, that's why I said every day looks quite different and you wear lots of different hats because today I could be working on, say, natural capital or tomorrow it would be income inequality, or it could be an engagement with a company. And the big difference is that I used to feel like you really have to know everything about the company to engage with the company. And here you're removed from you're no longer the specialist on a stock but because you know how the investment process works and you're a specialist in ESG issues, you can help the stock specialists make better decisions. So, there is this one step of removal from not the investment process but from the investment decision-making process.

Vish Hindocha: Yeah, no. I think of you guys as free radicals in our system, you get to bump into things and transform them and help us maintain that analytical edge. I'm going to come back to thematic research, and you mentioned a couple of topics there that I'll put a pin in for now and definitely come back to, but something you said when you were thinking about, you were in your analytical role covering health care in Asia and Simon Gresham approached you and said, this is how you've always thought, and this suits your mindset. I'd love if you could describe, what has been your approach or your philosophy or your thinking when it relates to sustainability? Why does that draw you in, in that way and what's influenced that philosophy?

Pooja Daftary: I'd say a lot of, I mean, the philosophy has been learning from some really good investors along the way and having been at MFS a very long time and learning how lots of different smart people think and embedding that into my process. In terms of how sustainability had been part of my role previously and part of my investment process, I'd say that I'd always thought about companies as parts of a broader ecosystem and I'd always question, what is the license of a company to operate? How does that company generate value and what would disrupt either that license or its value creation ability?

And in order to answer that question, you do end up having to look at all its stakeholders and what the relationship and equation is with those stakeholders. So, even when I covered, I mean, I'll give you an example, when I cover Chinese pharma, one of the key issues that I was focused on was looking at how much value the Chinese pharma companies and the drug distributors would create for consumers and for patients and for doctors and for hospitals. And were they over earning on margins or were they under earning or were they doing enough R&D to justify the prices they were charging to customers.

Back then I didn't think about it as a stakeholder framework, I mean, I picked that term up later but that's exactly what I was doing. I was evaluating the various stakeholders in the value chain; I was thinking about where China as a country needed to go from a health care perspective. I was thinking about, like from a government stakeholder perspective, how much budget did they want to allocate to health care? Were they overpaying for health care? Were they getting the clinical outcomes that they needed? Were doctors being paid well? Did they have even a good quality of life? Were they overworked? And if they weren't being paid well, then did they have an incentive to try and make money through other means and other parts of the value chain, and where was that excess profit and how was it going to come out?

And so, ultimately that is, there was all of it in there. There was a social angle thinking about the health care system, thinking about product quality and safety about physicians and patients and the relationship between these entities. There was a governance piece of it thinking about risks of bribery and corruption because the pharma industry globally, not just in China, that graft has been a problem for these companies, but it's very deep rooted in the business model because, especially in EM, if the drug prices are too low, they look for other ways to make money.

And so, we essentially are doing an entire ESG analysis without giving it the ESG label. And I think that's what maybe I'm guessing, right? You'd have to ask Simon this, but if I put myself in Simon's shoes, that's probably what he was talking about when he said, look, you like to do this kind of thinking anyway, you're doing it, it's part of your process. And I must say that just in terms of my interest, I much prefer doing this analysis rather than spending hours and hours on financial statements and figuring out different valuation techniques. That wasn't really something that I was passionate about to the same extent. It was a necessary part of the job but not, I would much rather spend all my time on the first part. And I think- He’s very astute to have called that out. And I'd say I was astute to have picked up on that and taken the job.

Vish Hindocha: Definitely. It sounds much more fun what you get to do now to be honest, to me anyway, versus the very, very deep fundamental analysis, which I know is essential, but I'm sure it's not as fun as thinking about all the thematic things that you get to. So, what you are describing, when you think about, to me, what I hear is you're talking about using and leveraging a variety of mental models or things that you've picked up from very smart thinkers, as you put it, and you have a, by your description, a very systems-thinking approach to investing.

And there's a growing recognition in our industry I think that in order to be a good investor, set aside ESG for a moment like you said, let's delabel it, to be a good investor, you have to have a systems-thinking approach. And I'm curious given that you operate through that lens, is there anything that you think that either you believe or that you think about that contrary to the conventional wisdom or the prevailing wisdom of our time?

Pooja Daftary: Yeah, it's interesting, right. I think that yes, systems thinking is important, but you have to understand all the different components in that system. And I think that's where my training as a bottoms up fundamental analyst really helped me with doing the ESG work that I do now. I mean, the way it's really difficult, you're trying to predict the future for entire ecosystems or for stakeholders and it's very difficult to do, to figure out where the next disruption's going to come from in terms of regulation or what have you. And very often the way I would actually approach my work was starting with the companies, even with the big thematics, whether it was looking at what's the future of plastics or what's going to happen to governance of Chinese state-owned entities over the next 10 years.

I mean, these are really big open-ended topics, and if you're only going to come at it from a systems' view, you end up basically amalgamating the views of lots of other researchers and coming up with some consensus view. So, it's very difficult at a systems level to come up with differentiated research, unless you're a PhD specialist who's focused on that one topic for a long time. So, instead, my strength was really digging into companies and using what I learn 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.

And so, I do this for almost any thematic that I'm doing, is I will start with individual case studies of companies and I will spend a lot of time bottoms up on the companies, either companies that I think are doing something really well or doing something really badly, looking at history to see who have been historically the winners and losers and what have they done and why did they do it and why did it work and not work, and then use that information to then take a step back and apply it to a system and come up with a framework for that.

I don't think that, as an ESG generalist, where you're at any given time working on so many different topics, that you can make those predictions on system thinking, you have to have some other tool in your kit and for me, it was playing off my interest and my experience in analyzing stocks using that to create that top-down view.

Vish Hindocha: That view. Yes, it's incredibly interesting. And I think again very differentiated-

Pooja Daftary: Yeah, it would be different for different people. I imagine if you asked Rob, he might have or somebody else on the team, a very different process but this is what works for me.

Vish Hindocha: Yeah. And is reflective, as you said, of your training, your background, where your curiosity naturally goes. Let's dig now into some of those thematic ideas. I know you're doing a lot of work right now on natural capital and you maybe began about biodiversity, we can do that, or we can talk about plastics but given what you've just said, that your process really begins in thinking bottom up and coming to that thematic sectoral view. Maybe if we are okay to do natural capital, maybe you could describe what natural capital is for everyone just so we are defining our terms and then how you've gone about and approached that subject knowing that it's a continuing stream of work for you and the team?

Pooja Daftary: You mean how I am approaching it right now? Because it's such an ongoing piece of work and it's such a big area that it's a continuous work in progress.

Vish Hindocha: Yeah. So, just to level set and keep everybody on the same page in terms of what is natural capital? How do you define it?

Pooja Daftary: So, we've always thought about the environment and climate as being an important resource that we use in terms of weather regulation, providing rainfall, basically allowing life to sustain on earth through its regulation, right? Through its regulating activities. But natural capital actually encompasses climate, which is a part of natural capital, as well as all the other resources that, the planetary resources that are available to us, be it the fertility of the soil which allows us to grow food or the carbon capture ability of the forests or the ocean.

So, the carbon cycle, which regulates the emissions that we put out incrementally, these are all forms of capital that we as humans use but that capital comes from nature and therefore is natural capital. And the reason the word capital is really important, and I would say it's a relatively recent term, is that these were natural resources previously and that's what we would call them, right? Like mining, et cetera, would be natural resource companies, that's how they would be identified. But I think we've been using these resources as a free resource for a very long time, or we've underpriced them and there hasn't been enough of an appreciation that this is a form of capital. And that capital gets depleted, and it needs to be replaced or it has to be protected and we need to value it and put a financial value on it.

The same way now we're trying to put a financial value on climate and climate change and how that impacts companies. How do you put a financial value on the sustainability of the food supply chain? How do you put a financial value on carbon capture by soil and oceans or on plastic pollution in ocean marine life, which then creates micro plastics that enters a food chain, and this is entire ecosystem of capitals that allows human society to function the way that it does? And so, really the first step was trying to understand, okay, we started micro with climate although we think about climate as being a very macro topic. If you take one step back and you look at climate within a broader ecosystem, it's one piece of it.

And you're saying there are a lot of other important pieces that allow us to function the way we do today and consume goods and services the way we do, and we have to think about these capitals and how to value them and what happens to us and to our economy, if those capitals deplete. So, that was really how we approached understanding what natural capital meant from an investment perspective, I mean, from an existential perspective, it is the integrity of the biosphere of the entire earth. That it's the wealth of nature that allows life to be sustained on earth. Of course, it's hard to have that conversation in an investment context so, then we think about it in investment terms and call it natural capital and it seems to resonate more than biosphere integrity at least with our group.

Vish Hindocha: Yeah. And it gets back to your point earlier of understanding what makes people tick and essentially how they can integrate it into their process or the way that they view the world. So, you asked lots of big questions. How do food companies think about this? How do we think about the carbon capture ability of soil or the ocean? How do you think about that? Where do you go from there so, once you've framed and defined what natural capital is, how are you approaching this now? And can you describe any of the analytical frameworks that you laid out before that you were trying to help the team understand?

Pooja Daftary: Yeah. Yeah. The key thing so, we picked one industry, which was the food sector, we thought that it was one of the more material risks for the food sector. I'd say it's a risk for every sector because every sector is dependent on nature in one way or the other, but we felt the food sector was probably the most dependent and so, we started with that. And I think the starting point for us was to understand the concept of dependencies and impacts, which means, if you look at the entire food value chain, right from the agricultural companies, dairy companies, meat producers, green traders and you work downwards towards consumer staples, restaurants and supermarkets and that's the food value chain who is dependent on what sort of natural resources, how dependent are they?

So, let's start by mapping the dependencies and then understanding that the very same natural capitals that these companies are dependent on, in trying to extract them and use them to produce goods and services for the economy, these companies also have an impact on those natural capital. So, if you take the beef industry, it has the worst natural capital impact of all companies and industries in terms of, right, so, the land use, the deforestation impacts the water consumption and then trying to link that together to say, are the impacts being valued  and do we fully understand the dependencies? Because even if companies are not doing the work today to map out what their dependencies are, even if regulation does not change to force them to do so, it's very likely that their supply chains will not be sustainable over the long term to enable them to produce the goods that they make all their money from.

And so, if cows are being grown in Brazil on deforested land from the Amazon and all the various environmental impacts that's going to cause and that those impacts are not priced into the cost of beef today, then what does that mean for the sustainability of the beef value chain and the prices that consumers pay for beef today? So, it's about trying to close that loop between what are you dependent on and that same capital that you are dependent on are you depleting it? Are you negatively impacting it through pollution, through water use, through all kinds of methods and how is that impact going to affect your dependency on that product over time?

Vish Hindocha: Yeah, absolutely. One of the eye-opening statistics that you shared when you disclosed the framework, for me, was thinking about cocoa as well. So, we discussed with, and the desertification of what's happening in West Africa. So, the majority of cocoa, where it comes from but then what's happening actually to those farms and therefore the ability, as you said, the supply chain sustains. So, often I think the commentary I read is people will say, well, these things can take a long time to manifest, it requires political will, or it requires consumers to pay attention or requires regulation. I think what you are saying is it can manifest really quickly, and it can actually show up in the supply chain as a shock or a risk and doesn't necessarily require political action or public policy, is that fair?

Pooja Daftary: It does require, I'd say political action and public policy to prevent it from happening but what we wanted to do was to say, if you put aside all the regulatory action that's required and you just think about, can this company continue doing what they are doing, given their resource consumption and their environmental impact at the rate at which they're impacting the environment, can they continue doing this indefinitely? Because think about how we value stocks, right? We are thinking about the cash flow generation capability of a company.

You're thinking about putting it into some kind of discounted cash flow analysis or they're looking at what's the terminal value of this company and these cash flows. So, when you put a terminal value on something, you are assuming that a company can generate this value into perpetuity. However, if you don't understand the resources that the company is dependent on, and how the availability of that resource, the cost of that resource and a license to use that resource might change, then how can you try and model sustainability of cash flows? So, that is really the purpose of this analysis.

Vish Hindocha: And recognizing that there are so many open questions still, thinking about that last point that you made a little bit more, how do you think about what companies can do to actually remediate some of these issues? I'm sure you, and again, I know you have lots of meetings with these companies, I'm sure some of them will throw their hands up and say, well, it's out of my control, I can't necessarily control my supply chain. Are there things that companies can do, and can we, as investors hold them accountable, engage with them over some of the measures that they can do to be nature neutral, if not nature positive?

Pooja Daftary: It's very difficult because I mean, if you try to look at a food supply chain, for example, you say, where does the pressure come from? If consumers aren't willing to pay higher prices and you can let's say you know that you need to move to more sustainable agricultural practices, regenerative agriculture, all that's going to come at a higher cost. And it requires the value chain to disrupt itself proactively before let's say a regulator comes in or there's some soil system collapse or some natural disaster that puts that resource at risk. You want the companies to proactively be thinking about how to disrupt themselves.

But there's a problem with the incentive structure because to do that, they would have to disrupt near-term profits in order to sustain longer-term profitability. And as investors in the markets always focused on what's going to happen to earnings one and two years out, nobody wants to see margin compression from higher costs. So, it's very difficult, I do feel for the businesses and feel for them as well. How do they, you're asking them to fix a problem that hurts the entire industry at potentially cost of profits, at least in the near-term.

But I think what we did realize doing this work was that the pressure points have to come from various different sources. So, there has to be some price passed on to consumers and then the rest of the value chain has to also accept some of the cost increases that it can't be done by one sector in that value chain on its own. The other thing we realized also was when you first form, when you share the pain, it's a lot easier to stomach. The second thing we realized was actually that, although it does seem like companies have limited influence, if you look at some of our largest exposures today, let's say consumer staples, for example, companies like Danone and Nestle and other large dairy companies, they probably consume a disproportionate amount of supply globally of certain commodities.

And so, for many of the large commodity companies, these big global multinational consumer staples companies, they might be 30% of their volume. And so, if you get a few of the companies to take that first step to start changing the supply chain, engaging with suppliers, changing practices, the rest of the industry has to follow because yeah, they can move the needle and they're trying to, and a lot of them are trying to. And so, the engagement I think is where I think a lot of it boils down to, engaging with supply chain partners, trying to understand like our company is, just trying to control damage, are they taking a systems-thinking approach? And are they looking at the next 20 years of their future and saying, what do we need to do to be sustainable? Are they making those investments now?

What are they doing in terms of stewardship? Are they investing in their suppliers? Are they advising them? Are they giving them favorable terms? Are they including KPIs in their supplier selection process that are sustainability related? So, we came up actually with an engagement tool to try and assess how various companies map their supply chain, how do they engage with their suppliers? How do they remediate when they find that suppliers aren't doing what they're being asked to do? So, it's a really multi-pronged approach where we have to look at it from so many different angles.

Vish Hindocha: Sounds like a fascinating practical application of something that's incredibly complex and interconnected. Pooja, you've been very gracious to go deep, I mean, this is an area where my heart goes naturally, I'm sure you and I can spend all day talking about natural capital but I genuinely look forward to seeing how the work unfolds with the team and seeing the work that you're doing with the different sector teams some of which you've just mentioned as well as the individual analysts on how we engage and better understand this problem.

Maybe just to change gears very slightly as we move towards the end, I always like to ask some fun fact questions, a little bit more about you again. So, outside of MFS and thinking about the state of the planet and our ability to sustain life on earth, what do you devote your time to? What do you get up to when you're not working MFS?

Pooja Daftary: Well, you are asking me at a very unique time when I've just become a new mom. So, I do end up devoting most of my time to really figure out this new human being in my life, my daughter Maya, who's an absolute joy. And she has given my work actually a lot more purpose. The other day I was talking to Fran Jahn-Madell who is our new head of stewardship in Asia. And we were talking about gender diversity in corporate boards. And I could hear my baby outside screaming and I was really feeling badly and Fran was like, "don't worry, we're doing this for them, we're doing this for the next generation." No? So, again, I linked that back to my work, didn't I? For fun, I'd say the biggest part of my time right now is spent trying to make my dog like my baby.

Vish Hindocha: Okay.

Pooja Daftary: She is his arch nemesis. Yeah, my husband and I, we're in Singapore, we do love to travel. So, travel is a big part of our lives. Unfortunately now with COVID it's less so, and so we spend a lot of time cooking, going on long walks, spending time with our dog, our baby and friends and I don't have some crazy fun facts. I don't walk the line.

Vish Hindocha: A lot of people want to know how do you get your dog to like your new baby? I think that could be a whole podcast on itself. Okay. So Pooja, next question. What's the kindest thing that anyone has done for you?

Pooja Daftary: Oh, gosh. I feel like my whole life has been filled with the kindness of other people, which has enabled me to be where I am today. So, many things it's very difficult to know-

Vish Hindocha: And maybe not just the pick one, maybe not the top one, but just anything that spring to mind.

Pooja Daftary: Yeah, no, I would say, I mean, just tying it back to MFS, there have been so many people been so kind to me over the years. I mean, right from, I remember when I fell sick as a research associate in Boston and I couldn't get doctor's appointments because they wanted to go to Mass General, everything was backed up and there were PMs and so many people putting in calls to their doctor friends and trying to get me appointments. One of my colleagues, people were cooking food and sending it to my house because they knew that I was alone in Boston. Those were really heartwarming things that happened. And beyond that, it was consistently offering a lot of support when I wanted to apply to business school, there were so many different people that volunteered their time to help me edit essays and write recommendations.

You know, so, it's just set into motion, stream of life changing events, built on the kindness of other people. So, when you ask me such a loaded question, it's difficult to give you a very succinct answer.

Vish Hindocha: I'm sure you've offended lots of people by missing them out of that long list of kindnesses but thank you, thank you for sharing it. What is the book article or thing that you would have shared or recommended the most?

Pooja Daftary: Yes, it's a book by an HBS professor who sadly passed away, Clayton Christensen, and it's called, How Will You Measure Your Life? It was given to me as a wedding gift and I read it and I loved it. And it's about figuring out what is the purpose of your life? It's that critical question about purpose to say at the end, really the end of the journey, what are you going to use to measure your life? And if you've already figured that out, then can you live your life by those principles? And it's a book I've gifted to a lot of friends and family. Yeah. So, that is the one book, yeah.

Vish Hindocha: That's wonderful. Thank you for sharing. I will add that to the list and just to close up here again, you've been so generous for the time so, thank you so much. What is the one message that you think is really important to give to all of our listeners?

Pooja Daftary: About investing or life or..?

Vish Hindocha: About, well, whatever you want it to be about, investing or about what you do.

Pooja Daftary: I'd say that it's a big lesson for me really is that it's very easy to find risks and find what companies are not doing well and why systems are not working the way they ought to and why regulation is failing. It's actually much harder to find what is going to change for the better but that is where the opportunity lies. The investment opportunity does not lie in figuring out the next big black swan event, but it lies in finding companies, entities, people, systems that are consistently making improvements, that are trying to be better, that are taking the right risks, making the right investments, thinking about stakeholders. And it's about those incremental changes that ultimately add up to something really positive that creates a lot of value for society.

And I'd say, that's one thing that I have to keep reminding myself to focus on because that is a world that we want to live in, and that's what we should focus on. And so, that is a challenge of this job is, it is one where we think about ESG, when people use the terminology ESG, what they're not appending after that term is the word risks, ESG risks, but they're just saying ESG. So, but really what it is thinking about is, where are the opportunities for change? And yes, there are risks but all those risks also present an opportunity. So, to find those opportunities and act on them not just for investing but for life as well.

Vish Hindocha: That's great. Pooja, thank you so much, really appreciate your time today.

Pooja Daftary: Thanks, Vish.

Vish Hindocha: Thanks to joining for today's episode. I hope you're left with a better idea of how natural capital is impacting companies and how investors are thinking about that impact as part of their investment process.

Now, remember, you can subscribe to All Angles through Spotify, Apple Podcasts, or wherever you get your podcast from. And we would absolutely love to hear from you if you have any questions or topics that you would like us to cover. Please do get in touch by emailing us at AllAngles@MFS.com. Thanks again for listening.

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