Interview: Stefania Di Bartolomeo on Sustainable Investing and Reporting.

What are the most common challenges that asset managers and advisors face when they need to prepare portfolio ESG reports?

There are very few tools and platforms available to them where they can insert a customized portfolio, have a look through the securities, and all the corresponded sustainable metrics. Physis simplifies their life by providing an easy-to-use platform with detailed ESG and impact data. 

How does Physis Investment help investors to understand, track and measure the impact of their money?

Physis is a platform built for investors that believe financial metrics are not enough to understand the impact of their investments. Physis is a discovery platform, simply search for a company, fund, or customized portfolio. Since the day of your first investment, you can measure the amount of water used or recycled, women in management positions, plastic recycled, and much more for all the invested companies. We help measure impact, track the investment’s sustainable and financial performance, and understand how your money is making a difference in protecting the planet. 

What long-term solutions does Physis Investment provide?

Physis builds a narrative behind financial metrics. If, until now, investors would only know and measure financial metrics, thanks to Physis, they can understand the impact of their money on the planet. Once you can measure it, you can act on it and reallocate your portfolios towards sustainable and financially performing investments. This positive loop helps money flow to innovative companies that, with their businesses, contribute to a more fair, green, and equal world.

How does Physis Investment speed up and make the impact investment process more transparent?

Physis has a unique data system that collects information from over 10000 companies worldwide, analyzes data quality by peer comparison, and for a period of 6 years. The Physis system is built on machine learning, algorithms, and deep industry knowledge. We carry the heavy work on our shoulders to make it easy for investors to access an incredible amount of quality data. Our system is secure and fast, in a matter of seconds, it provides deep analysis and transparency into the sustainable information of any investment. This allows investors to access the information needed to allocate their money towards impact activities and companies that are better aligned with their goals, both financially and of impact on the planet. 

What inspired you to launch Physis Investment?

The idea for Physis came to me while I was a fund manager working with a client who was inquiring about a fund investment strategy. The client asked a simple yet powerful question: How do you prove you are positively impacting the planet with my money? And after a few seconds, she added: Do you have data to show me?

At this moment, I realized I could provide plenty of analysis, company assessments, policies, and documents to help inform investment decisions. Still, at the end of the day, the technical material would not help the client if it was not displayed in a way they could easily understand.

With large datasets and ambiguous ESG information, there was no way the client could engage more deeply with their investments and answer some of the questions that keep us all up at night: Am I making a positive impact? Am I investing my money to uplift the people, places, and things I care deeply about?

These are the questions that Physis answers by leveraging data to track, measure, and promote sustainable investing.

What are the benefits of an ESG and sustainable analysis?

Considering extra-financial information in any portfolio analysis has proven to be a competitive advantage that improves investors’ efficiency, innovation, and growth while generating positive value. ESG information is important to compare a company’s sustainable performance at a thematic level and across peers. Sustainable data maps a wide array of risks and opportunities associated with portfolios. It helps to estimate long-term performance and potential opportunities more accurately. And, of course, sustainable data monitors environmental and social impact, offering a comprehensive investment experience. 

How does Physis Investment encourage innovation?

Innovation is at the heart of how we operate every day at Physis and the vision we have for the future of financial services. We envision and we act on it:

• a world where people can work from anywhere, so we moved our office to the metaverse. 

• a workplace where people can work on tasks, not by hours, so we do not track hours and have a very flexible schedule.

• investors are hyperconnected with their phones, so we have built a system to monitor every aspect of their portfolios anytime and with any device. 

• investors are tired of eating fish that has eaten plastic in the ocean and do not want to invest in companies that pollute, so we have built a platform that allows them to monitor this and much more information. 

These are just a few examples of what we believe innovation is and how we contribute to it. 

How can companies improve their ESG Performance?

You can’t improve what you do not measure. So, companies should all start to measure the impact of their business activities on society and the planet. This is the first and most needed step. Perhaps, the regulators here can help. Indeed, the SEC is moving in this direction and has recently proposed making mandatories for companies to report at least CO2 emissions. By measuring, companies then became aware. Once they know their impact, companies can act on it and keep improving their footprint on the planet. 

What are the most effective criteria to evaluate a Sustainable Investment?

No one answer fits all. It really depends on the investors’ goals and the investment strategy of the portfolios. Every investor may perceive and want to achieve different sustainable goals. For example, one can be more oriented toward social goals like women’s empowerment, one more towards natural resource management goals, like fighting water scarcity. However, the process of assessing the sustainability of portfolios should lie on three pillars: holding analysis, portfolio manager’s skills, and the asset management ethical history. 

What strategies does Physis Investment adopt to assist clients in identifying, benchmarking, and monitoring ESG and business conduct risks?

Physis provides among many, two tools that easily help sustainable-minded investors:

Physis’ Lookup function: With the Physis platform, you can input the ISIN or ticker of any security in your portfolio, and receive a detailed sustainability analysis of any portfolio. Our platform displays the sustainable products and services of each company in your portfolio, the UN SDG alignment of your portfolio, and impact data including metrics such as: women employed, waste recycled, or emissions generated, all from the day of your first investment, and so much more. Our tool also allows investors to compare their portfolio to a benchmark where you can use any sustainability metric side-by-side with the benchmark of your choice.

Physis’ Security Screening function: Our security screening tool makes asset allocation easy. Screen down an investment universe of funds, companies, or countries into a list of securities matching your exact sustainable and financial requests! 

What are your vision and your biggest goal for 2022?

Physis is a young, Boston-based startup, always looking to provide innovative solutions. In the next months, in the USA, we will launch three different versions of the platform to better capture the diverse needs of investors, from small RIAs to large asset managers that aim to create and understand the impact of their portfolios. But thanks to European regulatory tailwinds about sustainable investing and reporting, an increased number of European investors are inquiring about the Physis platform. We have seen exponential growth in the EU, and we are excited to create a new division there.

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