In this latest installment of our executive spotlight series, we delve into the world of ESG investing with a rising tech company that’s transforming the landscape. Our spotlight is on Stefania Di Bartolomeo, founder and CEO of Physis Investment, a Boston-based company using advanced technologies to bring transparency and simplicity to sustainable investing. The company’s commitment to creating impact and fostering transparency shines through as its founder shares insights on her journey and visionary approach to ESG investing.

Stefania, could you recount the story behind the founding of Physis?

Physis was conceived with a mission to bring transparency into the investment industry and to illustrate the impact of investments in an accessible way. The idea was sparked during my tenure as a fund manager when a client asked how to prove the positive impact their money was making on the planet, and whether there was data to back it up. Amid a deluge of complex ESG data, I realized that investors were struggling to uncover answers to their pressing concerns. Physis was designed to answer these questions, utilizing data to track, measure, and amplify sustainable investing.

How is Physis leveraging technology, including AI and Machine Learning, to optimize ESG investing?

The backbone of Physis is a blend of advanced algorithms and extensive industry expertise. We’ve made it a priority to ensure that investors can effortlessly access a vast archive of high-quality data. In addition, we’re developing an intriguing project utilizing generative AI to improve user experience, facilitating a fun and handy way for investors to swiftly discover and compare information.

How do you anticipate the political climate and backlash against ‘wokeness’ affecting the ESG investing industry?

It has no significant impact. There’s escalating awareness and a palpable urgency to tackle environmental issues, making investment in environmentally focused companies an integral step towards nurturing a green economy that is beneficial for all. By investing in sustainable businesses with strong ESG attributes, we collectively contribute to curbing pollution, conserving resources, and mitigating climate change effects. It’s all good for a company’s bottom line and helps investment returns.

What advantages does ESG-focused investing offer?

Integrating non-financial data into portfolio analysis offers a competitive edge, enhancing investor efficiency, innovation, client growth, and value creation. ESG data allows investors to compare a company’s sustainability performance with others in the industry, mapping risks and opportunities associated with portfolios. Sustainability data monitors environmental and social impact, providing a holistic investment experience.

Considering the growing number of rating agencies and criteria in the market that rank companies on ESG efforts, how does Physis set itself apart?

Many “sustainable data providers” focus on ESG scores, creating an ambiguous and complex landscape. Physis, however, tracks the actual impact data of portfolios from the inception of investment. This approach broadens the portfolio narrative to tangible and understandable metrics.

In an era of prevalent greenwashing, how does Physis employ technology to ensure transparency and integrity in investments?

Physis combats greenwashing by providing research beyond mere scores, offering raw data for 14,000 companies and 335,000 funds reflecting the operational impact across 287 indicators. Further, our proprietary algorithmic quality check safeguards us against inaccurately reported data by evaluating skewing or outlying data points across our 15-year data repository.

How is Physis adjusting to the changing regulatory landscape around ESG investing in the US and Europe, and how does technology aid in this adaptation?

In response to the evolving regulations in the US and EU, our team stays abreast of the latest expectations of both regulatory bodies and develops solutions to match. With over 170 million data points, Physis delivers unparalleled sustainable data by coupling our in-house AI and data harvesting with strategic redistribution partnerships. We are using the power of data and AI to help companies and investors navigate the complex global regulatory landscape.

Could you offer an example of a successful investment that was influenced by Physis’ tech-enabled ESG due diligence process?

While respecting user privacy and not having direct access to portfolios created through us, we can share some impressive statistics from the last four months:

  • Over 12,000 securities researched using Physis tools, providing invaluable insights for investment decisions.
  • More than 2,800 investment universe screenings conducted with Physis, helping investors identify the most promising opportunities that align with their criteria.
  • Over 1,000 portfolio exports facilitated by Physis, streamlining reporting and decision-making processes.

These figures underscore the tangible impact of our platform in enabling research, screening, and portfolio management. We remain committed to equipping investors with robust tools and data, propelling them closer to their sustainable investment goals.

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