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  • Writer's pictureGustavo Bernal Torres

Short-Selling Does Not Count As A Carbon Offset

Hedge funds need to assess the real impact of climate change on portfolios.

  • The argument that has been made is that investors should be able to net out their “long” holdings in higher carbon-emitting companies with short positions in such businesses to reduce the estimate of the overall carbon footprint of their portfolios.

  • While there is some merit to this view, it risks conflating two very different approaches to assessing climate change within investment portfolios: known in jargon as “financial materiality” and “double materiality”.



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