MSCI Inc. (MSCI) Earnings Call Transcript & Summary

Good afternoon. Please welcome, Head of ESG and Climate from MSCI, Eric Moen; Managing Director and Co-Head of Sustainable Investment and ESG from Lazard Asset Management, Nikita Singhal; and Head of Strategic Initiatives and ESG from RBC Capital Markets, Lindsay Patrick.

Good afternoon, and thank you for joining us for the final keynote session of RBC Capital Markets Financial Institutions Conference. It's great to have everybody back in full force. Before we start, I would like to acknowledge that today is International Women's Day. And I wanted to congratulate everybody and thank all the women in the room who contribute to an equal workforce and do so much to advance the quality for our sector that we work with. We do work in a great sector. When you look across the financial institution sector, there's been a lot of progress with regards to gender diversity and some stats that I pulled off today that I wanted to share with all of you. The financial sector outperformed all other sectors on gender representation. So 55% -- 56% female in banks, 43% for diversified financials and 55% for insurance companies versus globally, female representation in business is about 38%. In the financial sector, in particular, it's been noted that there's a multiplier effect. So for every woman that makes it up to the C-suite, there have been 5 or more joining in senior leadership. So I think that's something -- a lot of progress in the sector that we are able to celebrate. We are the sector that is most transparent on the gender pay gap. We'll talk a little bit about ESG data and the data that you collect and you all use in making decisions. 32% of financial institutions report their gender pay gap versus 22% for global companies overall. And then the actions that this particular research report highlighted that we can all take to advance gender equality are on parental leaves, flexible work options and career development programs. So hopefully, that gives you a little bit of food for thought as we celebrate this International Women's Day. I would personally like to recognize so many of the women from RBC who helped put this event together. So first of all, the women in our financial institutions group within RBC Capital Markets, I think it's our most diverse global sector, thank you for your hard work in pulling this together; our client marketing and brand team, who would have welcomed you and got you all organized, again, another group within RBC that is largely women; our communications team; as well as the sustainable finance group who works very closely with me. So moving on. And I think that's a great dig to get into why we're here today is to talk about the future of ESG and sustainable investing. We've done this now for 4 years, and the theme and the message has been different every year. And it really highlights, I think, the important role that the financial sector has to play. And it's our stakeholders that expect us to play this role; our shareholders, as many of you would have gotten questions on ESG, I think as you went through your meetings over the course of the past 2 days; our clients are looking for ESG, what we're doing on ESG as well as a variety of products and solutions; importantly, I think our employees are also asking the financial sector to do more in this card -- in this regard; and then very clearly, the regulators. On the shareholders, I think it's important to note that we're heading into proxy season. We expect another record number of shareholder proposals coming through when you look around the world and interestingly, not just record in terms of ESG but also anti-ESG shareholder proposals coming up and some that are in direct conflict from each other. So it's going to be really interesting to see how that unfolds over the AGM season this year. And then from a regulatory perspective, hot off the press in Toronto where I'm from, the Canadian securities regulator just published new climate risk management guidelines, setting out requirements for banks and insurance companies to report Scope 1, Scope 2 and Scope 3 emissions, including finance, facilitated and insured emissions. So we're managing to a very wide and broad stakeholder base. And I couldn't be more delighted to be joined by 2 experts who can really help us navigate this as an increasingly complex, it's an increasingly nuanced environment around ESG for our sector. So thank you very much for joining us. First is Eric Moen. Eric is Head of ESG and Climate for MSCI. He manages the global effort -- MSCI's global effort to provide data, research and tools to investors to help investors integrate ESG and climate across the entire investment process. Eric, you oversee, I understand, the day-to-day operations of both ESG and Climate for MSCI, driving collaboration with your product teams and also as a member of the executive committee. So please join me in welcoming Eric.

Thank you, Lindsay. Appreciate it. Glad to be here.

I'm also joined by Nikita Singhal, who is Co-Head of Sustainable Investment and ESG at Lazard Asset Management. Nikita oversees the firm's sustainable investment and ESG integration strategy and works with analysts and portfolio managers to enhance the investment management process and develop new strategies and products. Nikita sits on the firm's stewardship committee, leads client engagement as well as thought leadership on ESG topics. Please join me in welcoming Nikita to our session.

So we are going to start with, let's -- what we'll say is the elephant in the room, around ESG. There is a very -- I think we all need to acknowledge that there is a very different conversation this year than there was last year around ESG. I've called it the misrepresentation, but there is a current backlash going on as it pertains to sustainable investing and sustainable finance. Nikita, I'm going to send this one over to you. Why is ESG being politicized? And how are you managing through this environment?

Thank you, and good afternoon, everyone. I would start by saying, I actually think this is a very healthy reckoning that this space is going through. I think we have to acknowledge that many people will suggest that ESG has been in place for decades, some even taking it back to the 1700s and the Methodist faith-based investing that has been around for centuries. But I think that's an unfair comparison. So ESG is very different from its forefathers when we're talking about faith-based investing or socially responsible investing, which was largely about excluding certain businesses or activities from your portfolios because it didn't align with your personal values, so excluding alcohol, tobacco, in some cases, weapons. And as we went through different social and political movements even in the U.S., this kind of investing practice started to evolve. You saw this with the reaction to the apartheid movement in South Africa. You saw this with the Vietnam war, and you see this in various states from Christianity to Islam across the world. So let's separate what that is from ESG. In its latest iteration, we define ESG as a process of discovering and pricing E, S and G risks and opportunities for our investments. It's not about having a personal view on what is good or bad for the world, and this is why we like to say ESG is not a product. It's a process. It's part of good investment discipline, and it's not about suggesting that your morals are somehow superior to somebody else's personal views or values or political views about something. So I think it is a lot of the conflation between what ESG is and isn't, which is why we're in this space. The one last thing I'll comment on is I would liken ESG to kind of where we were in financial markets before the SEC existed. That's how nascent this space is in this current definition that I just shared with you. Imagine 70 years ago, when we -- if you worked on Wall Street, there was no [indiscernible]. There was no FASB. You didn't have definitions. If you said EBIT and I said EBIT, we'd probably come up with 2 very different numbers. There weren't standardized accounting frameworks or benchmarks. There wasn't a Miller-Modigliani framework for optimal capital structure. These things are going to take time as this space matures and evolves. And so we -- it's quite -- I sympathize with people who criticize ESG, but we have to acknowledge that it's really going through its teenage growth spurt.

Terrific. I think that's a great analogy being the parent of 3 teenagers right now. Eric, what about you? How is that -- how are you and how are MSCI managing through this complex environment?

Yes. I think that, Nikita, your comments are very perceptive and accurate, and I would agree with those. I think we view it as that the political noise is quite separated from the investment reality of what our clients are faced with, which is the investment reality is that environmental, social, governance data and models, along with climate data and models, makes fiduciary sense to take into account in your investment process. And what we look to provide our clients, and our clients are actively engaged with, is understanding their investments and their portfolio companies and their portfolios from the perspective of what are the environmental, social, governance risks and opportunities that a particular company is faced with? And how are they managing those risks and opportunities? And understanding that can lead to better investment outcomes and from a risk/return perspective. So ESG integration is quite different, as Nikita said, from, say, exclusionary investment, where I think that's where a little bit of the political noise is conflating that ESG might be excluding entire industries versus ESG integration saying there are leaders and laggards from an ESG perspective, how companies are managing their ESG risk within the industry. And so you might have companies that are faring better in oil and gas and worse in oil and gas, but it doesn't mean you should exclude the entire sector. So I think that's really at the -- as we view it, as our clients are not lessening their interest or their need to understand the ESG risk or climate risk, in particular, in their portfolios because of the political noise, but it adds noise versus the reality.

Sure. And at the end of the day, I think as you both highlight, it's about financial value creation. And it's a process and an input and a tool that can be used more broadly to create value. You both talked about ESG risks and opportunities. A new risk that's come up is the risk of greenwashing. And particularly, I think, for the financial sector, the risk of greenwashing from the media, from stakeholders, et cetera, is very high right now. What advice do you have for financial sector participants to manage some of those greenwashing risks?

I think at the heart of it is not overpromising what our different functional areas can achieve. As investors at Lazard Asset Management, what we're most focused on is fulfilling our duties as fiduciaries. And what that means is that we have the discipline to consistently price risks and opportunities into our portfolios. Increasingly, many of these risks and opportunities are coming from sustainability trends that we're observing in the world. We're not taking a view to say being -- coal is bad or a certain business activity is good, and therefore, we're going to allocate more capital there. I think that's dangerous. That's not our job as investors. We're protecting the capital and helping grow the capital of our end clients. But what we can say is that we are noticing significant disruptions in industries related to the energy transition, related to healthier living habits that consumers are picking or just related to an increased consciousness about protecting worker rights. And these -- that may seem like individual values start to shape normative values in different parts of the world differently, which is why it needs to be contextualized. But they start to create catalysts that then get priced into the market. So as investors, what we're focused on is, is there a regulation that we're seeing in the marketplace with anything as simple as building emissions that might impact the market share of LED lighting companies that we own in our portfolios or something as large as the Inflation Reduction Act, arguably the largest piece of climate legislation in the world, that is significantly going to transform CapEx, R&D and real capital allocation in industries across portfolios that we own? Are there observations in consumer behavior such as a shift towards lesser plastic packaging that is starting to impact the EV/EBITDA or P/E multiples of packaging companies that we own in Europe and in the U.S.? Are there shifts in electric vehicles, renewable energy, LED lighting? And I don't just mean in terms of pure-play companies like a Tesla or a Vestas, but I mean the entire supply chain. And actually, the knock-on effects that impact is more -- that impact because of the supply chain is more than 25% of the MSCI ACWI index today. As pure-play companies, you maybe have 3% to 5%. So everything I'm saying here, it's regardless of whether we call it ESG or something else. It's certainly not about being woke in any way. It is about being disciplined investors and recognizing there are some structural trends that we now need to pay attention to if we want to continue to be good, disciplined investors.

Eric, how do you think...

Well, I agree with -- particularly with the comment around not overstating or enlarging what you're actually doing, which is, I think, one of the big financial service company that has gotten into hot water, I won't name to offend anyone, but where the issue is potentially overstating how they are using ESG integration in the investment process and across assets. And so the practicing what you preach or if you are looking at this data and information to help in the investment process, where you are practicing that is important. And if there's asset classes that you're not able to get the data, and we know that, that's the challenge within ESG and Climate, we've started -- if we go back historically, having -- it's -- this is in a field that it's been harder to get companies to disclose data and to find information on. And this is where MSCI has looked to not only look at disclosures but a range of data that we collect to help calibrate our models. But just like on the other side of the equation, when you have asset managers or firms that are looking to integrate this, there might be categories that you just cannot get this information on beyond equities and fixed income, which I think in the future, you will get more information around. So being honest about -- being transparent around where you're using this content and where you're not is important. And that's just, I think, pretty basic sense.

Yes. And I think probably an evolution that we've seen over the past 12 months has been less around aspirational goals, if you will, commitments to net zero and more about real, authentic transparency of here's where we are in the journey, here are the next steps that we're taking, and here is our path forward. And I think that's actually really, as you mentioned, Nikita, quite refreshing to see. I want to spend a little bit of time because -- and we've talked a little bit about corporate evolution on ESG. But all of us are in the business of climate and ESG, if you will, providing products, solutions, advice, research into our clients. So starting with you, Eric, tell us a little bit about -- more about your client franchise, why they care about ESG factors and climate specifically. And what tools, solutions are you delivering that are helping them on that journey?

Yes. And MSCI, I would say, beginning around 12, 15 years ago, focused heavily on ESG from a key -- a set of data that we can provide our clients to help in the investment process. And our mission is to help clients build better portfolios and provide mission-critical tools in the investment process to build better portfolios. ESG and climate information is about helping our clients build better portfolios. So we've invested heavily in the last decade-plus in collecting a wide range of data around environmental, social and governance factors and more recently focused specifically around climate because it is such an important risk factor in the investment process that, number one, as a company, it's 1 of our 4 main business focuses. We have Analytics, Index, ESG and Climate and then Private Assets. It's -- we've considered it for a good decade-plus that this is critical information that our clients -- and our clients are the institutional financial investors. And in the financial markets, they're the major asset managers, pension plans, banks, insurance companies, the full spectrum. So it's in our mission statement to collect the best data, make models where this data is not provided by companies themselves through disclosures. So we make estimates where -- and we've seen improved disclosure over time. But still, there's a long way to go. So it's really around providing our clients with the data, models and tools to understand insight into risk and return profiles of companies and portfolios in the investment process. And that's first and foremost. Now from a corporate perspective, as I'm sure everyone in the room, from that corporate perspective, there is the goal of setting net zero targets as we've transitioned to an economy that is net emissions neutral. We've given our own net zero pledge to go net zero before 2040, and we've had our targets approved by the Science Based Target initiative. So that -- we definitely -- and we participate in many different bodies and organizations that will help move the industry forward. So I think that's just a little bit of our background.

Yes. So your clients want data. They want analytics. They want research. And interesting, where there isn't data, they're looking to you for estimates to help them get there.

That's a very well -- a good way to put it, Lindsay. Thank you.

Nikita, what do your clients want from you?

Yes. Maybe to also just make this -- mix it up a little bit, I would say actually, more is not always better. We are -- in this space, I find there is a deluge of data. And I feel often, I can sympathize with companies that are being sent like thousands of surveys to fill out with all kinds of ESG data, and you're spending a ton of money. And who's benefiting from this? It's the value chain of auditors and consultants and all of that. Is it helping us make better investment decisions? Not necessarily. I really like 2 academic papers for someone who really wants to dig into this. One is Four Things No One Tells You About ESG Data by Professor George Serafeim, where he talks about how ESG data has 4 challenges: consistency, comparability, being able to benchmark it to different -- I don't mean traditional benchmarks, but are you comparing diversity statistics for a sector or a region? Are you comparing governance standards of Japan to the U.S.? And how do you think about absolute versus relative comparison on these metrics? But the fourth reason actually is probably the most important, and that's where we need to make the most -- we need to have the most debate amongst investors and corporates and providers -- data providers and analytics providers like an MSCI is materiality, what actually matters. So the second paper is by Professor Bob Eccles at Oxford called Fewer Better but Fewer, where he essentially suggests that at the end of the day, it's 1 or 2 ESG things that may impact the financial materiality of a stock. So let's not go crazy and try and find 150 metrics on ESG. Let's think about the business drivers of any company and then think about, are there -- is there an environmental issue or a social issue that is impacting those business drivers? If you can translate an E, S or G issue into a line item, well, particularly E and S, it's hard to decompose governance risk or opportunity, but E and S, if you can break that into an impact on a company's organic revenue growth projection or your margin expectations because competition is going to change or CapEx plans and R&D expenses, maybe it's an industry that's being so disrupted because of something like the energy transition that you think cash flows are just going to be a lot more volatile and hard to predict. So you're going to raise your cost of capital, and that impacts your discount rate. So I think the more conversations we have about that, that will help us solve a lot of the data challenges that we have today.

If I can make just a quick follow-up comment to that is that I -- MSCI would completely agree with that approach. And in fact, our ESG Ratings model from its inception in the early 2000s was focused on financial materiality of E, S and G issues. And so what that means is what we -- our model looks to assess is industry by industry. We take in -- given the industry and say, what are the -- from our model, what are the 4 to really maximum of 8 key issues that would have a material bearing on the competitiveness of the companies within that industry and measure those in a quantifiable way over time, so comparability and over time, which we do so, which I think that the less is more is very much an agreement on that point.

And I think an opportunity, too, for us to lead that conversation, to not wait for it. Certainly, it's embedded in the SASB and now the ISSB sustainability standards but also from a corporate perspective. And we really encourage our clients lead with investors on what you think are the most material factors and how you're managing them and how they're approaching to them because don't wait for the -- to fit into the box that's being provided. Try to create your own box and lead your own approach to ESG, and that's increasingly what we're hearing investors want to see.

If it's helpful, I just want to give 2 really quick examples. If you're -- a few years ago, we were having a conversation with a mining company. And they were talking about, "Oh my God, like I just -- I don't know if anyone is going to invest in us anymore because mining is bad for ESG or ESG is bad for mining," however you want to put it. And I think, firstly, as hopefully you've heard today, ESG is not about assigning good or bad values to a company. It's about trying to deconstruct the risks and opportunities that, that business is facing. And the conversation that we then had with this mining company was to say, "Yes, there are a lot of operational challenges inherently with being a mining business. You are going to be present in communities. You are going to have not-in-my-backyard situations. You're going to have environmental challenges because you have to deal with mining -- extracting in large areas that results in biodiversity loss." But on the other end, in terms of your core product, that is going to be the largest supplier of what the energy transition is going to happen over the next few years. And as this company started to realize, well, the materiality is as much in the product benefits as in the operational risks, then they could take hold of their narrative when it came to talking about ESG. And the second example I'll give you is as a financial services company like Lazard, we get asked by all of our stakeholders, what's your carbon footprint? Are you tracking Scope 1, Scope 2, Scope 3? And one of the ways I like to think about it, and I don't play a corporate ESG role, I'm an investor on the asset management side, but we have a lot of conversations with our Corporate Head of Sustainability, the most material aspect of a financial services business is its human capital. And so the biggest risk we face is the diversity of our workforce. And I mean, diversity of all shapes and forms, I don't just mean gender or race, but intellectual diversity and cognitive diversity so we can avoid the biases that inherently can play into portfolio management. And when it comes to carbon footprint, what we are worried about is the underlying climate risks and opportunities that our portfolios are facing. In fact, CDP did a study saying that for most financial services firms, it's several hundred times larger as a footprint than your own footprint. So yes, it's important. We track the footprint of the buildings that we all work in and the transportation we take to meet our clients. But as financial services players, the underlying carbon risk of the portfolios or if you're in the sell side and doing advisory work, the portfolio -- I mean, the advisory work-related carbon risk, is much more material.

Yes. And I think that's why the financial sector is actually in the spotlight right now, rightly and wrongly, as sort of an agent of the economy. And there's a tool to engage with companies, as you mentioned, across a variety of different sectors from a lending, from an advisory, from a service perspective. I'm glad you brought up George Serafeim, Nikita. George is actually speaking at our ESG conference later on in the month. So if you want to hear from him directly, please do talk to your RBC Capital Markets adviser, and we'll send you a link to our event. I'm going to move on to the regulatory focus on ESG because you now cannot talk about it without talking about the enhanced focus from regulators around the world and the fact that regulators are taking different approaches, depending on where you are. We had the big news out of Canada today. How are both of you navigating this sort of very dynamic regulatory environment is question number one. And question number two is potentially a little bit more sassy. Is the regulatory attention helping? Go ahead, Eric.

Okay. Maybe I'll start this time. And so it's interesting because the ESG Ratings content overall data set and now climate, the ESG data set evolved largely in the last decade-plus without necessarily regulatory regimes pushing that. And MSCI has worked to deliver this content to our clients to help make better portfolio management decisions and build better portfolios. Now the -- no doubt, in the last 3, 4 years, the regulatory regimes have become much more complex. We have -- our clients are globally based. They're in -- the 3 core regions of our client base are Europe, the Americas and Asia. And clearly, the -- like ESG integration initially being driven out in Europe, we see the most regulatory activity taking place in Europe. And our clients are faced with having to respond and report on those regulatory regimes, so SFDR reporting in Europe, EU taxonomy in Europe, MiFID II in Europe, being the focus of our clients. And we're navigating by -- 10 years ago, we did not have a regulatory affairs team that sought to engage with regulators and keep up with the daily announcement that's taking place. We do now, and that's a necessary condition to help our clients navigate this. And oftentimes, there's -- in some cases, they're very clear. In other cases, there's some interpretation to be had. Overall, to answer your question around, it is from the provider of solutions. If we're able to provide those solutions to help our clients navigate the regulatory environments, then that's good for us. And we so far have been able to do so. But there is increasingly -- we'd like to see more harmony in climate disclosure. We did -- our annual Trends to Watch paper noted that of the 3 major pushes on regulations for climate disclosure, there were some overlaps. But there were some also distinct categories which you'd like to see harmonized in the end. So it's -- bottom line, it's the complexity that we're navigating through resources and talking to clients on a daily basis and looking to provide solutions.

Great.

Yes, I completely agree. I think regulation can bring more discipline to the markets and I think especially regulation when it comes to data disclosure, accounting principles on how do we actually account for these in a way that's consistent data across markets, benchmarking standards and product labeling standards. I think those are all helpful. My concerns, I think, are sometimes, if we're taking the teenage analogy that now needs parents, are you being too prescriptive in the rules in a way that we're stitching a suit that's too tight to fit? And in being too prescriptive and not creating regulation that can be iterated upon, especially in some markets like with SFDR, I would argue, what's happening is that people are finding workarounds. And it ends up being just a tick-the-box kind of exercise. And it's then exacerbating the very issue that we were trying to avoid, which in the case of Europe is the greenwashing issue.

Really, I have so much to talk to you about, and I'm running out of time. But I imagine a lot of people have questions in the room. There has also been a movement towards what I would call collective action and bringing the financial sector together in terms of pledges we're making, ambitions we're signing together, whether it be coming out of GFANZ would be the big one out of COP26, some of the initiatives under UN PRI. What should financial institutions be aware of as they think about what collective coalitions they should join and pledges they should make?

Yes. I do worry about this a lot, and I have a tussle in my head because I think -- I don't believe that we should be advocating for our personal beliefs or institutions that are collections of so many different individual values. So I don't think that's right. As a research-focused investment shop, the way we pick which organizations to join is to really think about, is this collaborative organization going to help us with our understanding of financially material ESG issues? Is it going to deepen our understanding? Is it going to help us collaborate with like-minded investors so we can share best practices, we can push for more consistent, comparable disclosure from companies? As fiduciaries, we remain very -- we steer very clear from any kind of virtue signaling. I mean, I think between someone in the audience, you may care deeply about mitigating climate change. And I, having grown up in Thailand and India, just some context, might care deeply about socioeconomic development in emerging markets. Those 2 issues are often inherently at odds with each other. And I don't think I'm in the place to suggest that one is more important than the other. So it's less about that, but I think that there is a place for many collaborative organizations so that we can share that best practice and push that in the marketplace.

Interesting perspective, for sure. We view these collective action organizations in that, yes, you do need to be selective in terms of which ones you're going to focus on because there's a large body. But there are some very important ones that are moving the industry forward in the framework that Nikita mentioned, which is helping to set the direction of disclosure standards, helping to move forward as an industry to get better data, better disclosures, better frameworks. And so for instance, GFANZ, coming out of the COP26 conference, we do feel is an important industry collective to help identify what are some of the best metrics to use in climate risk analysis. What are -- what should service providers like ourselves be -- what should the goals be to help move forward to a net zero economy that we've put together as a goal of these climate conferences? So the GFANZ is an important one. We've always been involved with the Principles for Responsible Investment in the sense that it's allowing or encouraging the use of information and data that can be used in the investment process. So we're very much aligned with those organizations that are working together to move forward the industry to help bring better tools, data and objectives to the financial service industry. And this -- you have to be selective in that.

Yes. The 2 I was just going to mention that -- again, that are in line with the principles that I shared or the philosophy that I shared is CDP, which is really -- they've moved the needle. That's one nonprofit organization that said, we're going to go out and get every major company, initially carbon-intensive and now thousands of companies, publicly and some private, to disclose their carbon data consistently. And now they're doing that with other forms, including water and biodiversity. And then ISSB, and it's -- particularly its forefather, SASB, the Sustainability Accounting Standards Board, that really, I think, helped this industry grow from infancy to teenagehood. Underlining what's important is the financial materiality, and they came up with that famous now materiality map that has material issues across 77 subsectors. And ISSB is now taking their work forward and trying to set more global kind of norms around what's financially material.

Yes. We're getting there so that ESG data will be like financial data. I often say when I was an analyst in investment banking 25 years ago, I would never use the financial data on my Bloomberg screen. It was always wrong. You had to go to the financial statements themselves, similar with sort of where you are with ESG data. Now you have to go directly to a service provider of the company. But there will become a time where it's ubiquitous and known hopefully as financial statements. We have 2 last quick ones that I want to wrap up with. From what I've seen in my career in sustainability, a key success factor is leadership. You need leadership to -- that understand the critical issues and that can bring people together to integrate ESG. As leaders in this field and trailblazers in this field, what is one thing that you've accomplished in your career that you're most proud of? Eric?

Okay. While I've been involved on the ESG and Climate team at MSCI for now 12-plus years, longer at the company, and I -- the one thing I would say I'm proud of is that when I joined, we were very small, and the industry was very small. And I think parallel to what we see today, despite a healthy amount of skepticism and a general question of the value, the -- over time, we've been able to prove the value of using this content to help make better investment decisions without resulting in any kind of bombast or egotism. It's been the mission of helping our clients, and that 12-year journey has been incredibly rewarding to where we get now. And I do firmly believe that skepticism and questioning is not a bad thing for the industry. So -- but you need to calibrate that, that's not going to deter you from your long-term mission.

Great. Nikita?

Yes. I think it's been -- probably most proud about always being an investor first. I think that I very early on, because when I worked at the World Bank, recognized that financial -- long-term financial success of any enterprise is inextricably linked with its stakeholders and their long-term success. And so when I'm -- anything that has propelled me in my various jobs after that has been this realization that incorporating stakeholder considerations, whether it's your community and the environment or your employees or the supply chain or your customers and their health and safety and affordability, is always going to determine long-term financial success. And having that investor-focused lens, I think, has always helped me kind of stay on track in an industry that has lots of shiny objects being thrown at you every year.

Yes. And for me, it was the privilege of starting the Sustainable Finance Group more than 4 years ago at RBC Capital Markets and within the investment bank. I'm going to wrap up with one last question. We've talked to you all about the business of ESG. But actually, the consumer part of ESG is equally important. We're all consumers. We have to change our purchasing habits to get to a sustainable, more inclusive economy. What is one sustainable product that you like that will entertain our audience for today? Who's going first? Nikita.

Yes. I'm sorry. I see a lot of men in the room. I don't know if they sell men's products. So today is International Women's Day. Go buy something for your partners or women in your life. It's called Aday, and it's a really great brand. I'm not in any way associated with them, but they are trying to increase the repeat value of clothes because an average consumer in the developed world at least wears a piece of clothing 7 times and throws it away. And they're making more sustainable clothing that then -- and it also is more resilient so you can wear it many more times.

Terrific. Eric?

Mine is simple in that I'm a avid cyclist, but I've gotten into electric bicycles. And now I can't go back, which is I cross over the Brooklyn Bridge in my electric bicycle to work. And that's pretty invigorating way to go, very quick, too. SUPER73, if anyone wants to know the brand.

And mine would be my Rothy's shoes, which is for men and women. And they make bags and wallets made out of recycled plastic.

We're not sponsoring any of these brands.

We're not sponsoring any of these brands. This is just purely sharing responsible consumption ideas. Nikita, Eric, terrific panel. Thank you for sharing your insights with our Financial Institutions Conference today.

Thank you. Have a good day.