Gustavo 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”.
Source: https://www.ft.com/content/65ec280b-e9b0-40f3-9e6f-b0b65827aab6