Q&A with Scott Mather, Managing Director, Chief Investment Officer, and Meredith Block, Vice President, Research Analyst for ESG, PIMCO
The Food and Agriculture Organization (FAO) of the United Nations (UN) estimates that one-third of the food that’s produced for human consumption globally is lost or wasted.
For Scott Mather, Managing Director and Chief Investment Officer of investment management firm PIMCO, it’s the value of that food loss and waste — about $1 trillion – that sticks in his mind, a very tangible indicator of the inefficiency of the global food value chain.
Mather and his colleague, Meredith Block, Vice President, Research Analyst, highlight the complexity of food insecurity and hunger, and how the challenges that food banks face intersect with other global challenges – chiefly, climate change. This intersection is at the heart of PYXERA Global’s Reimagining Green(er) Solutions to Hunger Challenge in which cross-corporate teams of employees come together to contribute in powerful ways to the “greening” of food banks.
Partnering with The Global FoodBanking Network, PIMCO is the lead sponsor of the challenge. In this interview, Mather and Block respond to questions about the issue, PIMCO’s experience with it, and the benefits of collaboration to address global challenges.
What is the nature of food insecurity and hunger in the COVID-19 era?
Mather: The problem was growing before COVID-19, but it seems like the pandemic put it into overdrive. You see some of the estimates that nearly one billion people globally faced severe food insecurity in 2020. It’s a staggering number and, in many ways, it seems impossible to deal with, but if 30 percent of food globally – a staggering 1.3 billion tons – is lost or wasted, that’s multiples of what’s needed to make sure a billion people are fed.
Let’s imagine hunger wasn’t a problem and food insecurity could be alleviated – think how much larger economic growth could be for the world. In so many ways, sustainability is about doing the right thing, but it’s also about making growth bigger, more inclusive, and more resilient than it would be otherwise. Food insecurity creates so many other problems – problems with education and economic opportunity, for example. These are all overlapping issues.
Block: When I think about food insecurity – that one in nine people in the world faces chronic hunger – and the extensive effort and resources that go into producing, transporting, and selling food, I think we can say that what we have is a highly inefficient process. It’s a real shame, because in the current state of the world, with the amount of food we do produce, no one should go hungry.
What are the challenges food banks have had as a result of the pandemic?
Block: Our partners have told us that the need and demand for the services of food banks have skyrocketed. There has been a loss of income globally for so many people, so that’s placed a lot of people in the food insecure category. But in addition, quarantine and COVID-19-related illnesses and other dynamics have led to a labor shortage across the supply chain. Ultimately, there’s more demand for the services that food banks offer, but potentially less food that can get there. Food banks we heard from shared that some of this is due to labor issues and how much food has had to be left on the field because workers are sick or they don’t have access to the right personal protective equipment (PPE).
Mather: Even in developed rich countries, it seems like the demand has exploded for similar reasons. We’re all seeing food inflation, so we can all relate to the fact that there are a lot of problems in the supply chain.
How and why did PIMCO become involved in the issue of hunger and food insecurity?
Mather: For many years, [United Nations Sustainable Development Goal (SDG) #2 – Hunger] has been one of our key philanthropic focus areas. It’s been a focus of our volunteer efforts – our employees volunteer thousands of hours every year to help food banks in their local communities. It’s also one of two global focus areas of our Foundation, in which our senior leadership is deeply involved. We take an all-in approach to our partnership with The Global FoodBanking Network, from grant funding to the volunteer initiatives, and thought leadership and advocacy work we provide to help achieve the goal of Zero Hunger. Just last year, we committed $10 million to GFN over the next five years to improve food access for an additional 3.28 million people and to distribute nearly 18 million kilograms of sustainably sourced food.
We take an all-in approach to our partnership with The Global FoodBanking Network, from grant funding to the volunteer initiatives, and thought leadership and advocacy work we provide to help achieve the goal of Zero Hunger. Just last year, we committed $10 million to GFN over the next five years to improve food access for an additional 3.28 million people and to distribute nearly 18 million kilograms of sustainably sourced food.
Why did PIMCO become involved in the Reimagining Green(er) Solutions to Hunger challenge?
Mather: We have always considered how food insecurity and hunger intersects with other issues. For example, if you’ve got agriculture broadly contributing about 10 percent of global greenhouse gas (GHG) emissions and you’re losing a third of that, you could say well, roughly, food loss and waste contribute around 3.5 percent of global GHG emissions, so that’s another aspect of food loss and waste and the importance of greening it. If you can eliminate waste, it’s definitely going to reduce GHG emissions and all the waste that’s associated with it. Participating in this challenge is an opportunity for us to address the intersectionality of these two important issues.
Block: The firm is always exploring everything it can possibly do within its purview to slow the onset of climate change and this issue is at the intersection of reducing food insecurity and reducing GHG emissions. That motivates a lot of my colleagues to get involved. It’s a really self-aware and brilliant approach for any financial services firm to understand that we’re all working towards this similar goal of wanting a really strong global economy. If you don’t look after those who have the least and look at pockets where food insecurity has led to political destabilization, it all escalates.
How does the challenge align with Purpose at PIMCO?
Mather: It lines up with the three terms we use to define our Purpose at PIMCO efforts: giving, acting, and advocacy. We’re giving our financial resources and employee time. We’re acting by taking a step forward, doing something that hasn’t been done before, and trying to think about how to do something new that’s impactful. For advocacy, the power will be in telling our employees and clients what we’re doing and showing them that there will be opportunities to participate in the future and to have an impact.
Block: The challenge is perfectly aligned with our environmental, social, and governance (ESG) portfolio. We approach both our research of the companies we invest in, and our engagement with those companies, with a sense of trying to prepare them for a future that values sustainability much more than it’s valued now. If I think about that in the context of this challenge – thinking about food insecurity in the context of its environmental impact and vice-versa – it just seems very, very well aligned.
What excites you about PIMCO’s participation in this challenge?
Mather: For me, it’s the marriage of these two areas that we all care about – food insecurity and climate change – and bringing my expertise to address these problems. When I first heard about the challenge, I thought, I don’t necessarily know all that much about the issues, but the one thing I do is talk to lots of companies – I talk to CFOs and people in the c-suite – so I thought I could help recruit partners to join us in this activity.
Block: My job as an ESG analyst is highly intersectional. From the perspective of my team, we approach everything we do from that perspective, where if you’re solving an environmental issue, you need to do it with social considerations, and vice-versa. This is just a really great opportunity to bring all sorts of systems-level thinking together to see how we can be much more integrated and intersectional in our approach to solving some of these issues.
Are there specific components of the food banking process that your challenge team focuses on?
Block: The heart of the challenge is to try and “green” food bank operations, so we are really trying to focus on eliminating inefficiencies. Right now, we’re trying to see how we can reduce the need for middlemen and warehousing and find a way to shorten the time between producers and beneficiaries. Hopefully, we’ll also see where tangential industries that you don’t often think about when it comes to food banking could potentially be leveraged. For example, could the pharmaceutical industry supply chain and its need for cold-chain solutions teach us something? Or could other logistics companies share insights or resources?
We’re very lucky that our challenge team includes members that have a lot of experience in technology and application development, so this idea that you could use some kind of real-time geospatial solution to link those who have something to give and those who are trying to distribute the food is really compelling.
The heart of the challenge is to try and “green” food bank operations, so we are really trying to focus on eliminating inefficiencies. Right now, we’re trying to see how we can reduce the need for middlemen and warehousing and find a way to shorten the time between producers and beneficiaries. Hopefully, we’ll also see where tangential industries that you don’t often think about when it comes to food banking could potentially be leveraged.
What are some of the benefits of collaborating with other companies to address systemic issues like food insecurity and hunger?
Mather: This way of partnering and the teamwork aspect of it is critical. We’ve all experienced the power of teamwork within our organization throughout our careers, but to do it between organizations is also very powerful. I think partnership makes the work fun and exciting for individuals who get exposure to different people from different corporate cultures, backgrounds, and experiences. People like working together as a team in that way. I applaud PYXERA Global because that collaboration is what motivated a lot of people to participate. It’s easy to see the benefits.
Block: I just love hearing all the thoughts of my teammates. They all have such great ideas and so much enthusiasm, it’s been really encouraging. We have a diversity of backgrounds in both professional experience and geographic locations and it’s been really fascinating to hear everyone else’s perspective about the problem, how they’re approaching it, and experiences they’ve had in the past that they think they can leverage.
It’s interesting how people who would otherwise be fierce competitors end up becoming collaborators to try and come up with solutions to these issues. That’s another great thing about this challenge. We’re working with our peers and it’s great to collaborate deeply on this challenge. Everyone can put solving the problem above all else.
What do you think the team will take away from this challenge into the future?
Block: Hopefully, seeing what can be done within their own sphere of influence to work on this issue. I speak with companies every day and the more I speak about this topic, it’s opened my mind to thinking about how companies and their business models could be leveraged to work on this issue, given that the needs are so great.
What advice would you give to other companies thinking about getting involved in a challenge like this?
Mather: Just do it. Employees love to contribute to these initiatives. They love to work with colleagues from different companies, backgrounds, and fields of expertise. Some companies that we talk to haven’t ever done anything like this, but I’m quite sure that if they do they’ll be looking to do more because they’ll realize the impact that they have and that it motivates employees to give more and think more creatively.