LONDON ¨C Tens of trillions of global investment dollars are pouring into companies touting robust environmental, social and governance (ESG) credentials. Now short-sellers spy an opportunity.
Such hedge funds, often cast as villains of the piece because they bet against share prices, scent a profit from company valuations they believe are unduly inflated by ESG promises or which they say ignore risks that threaten to undermine the company¡¯s prospects.
The fact short-sellers, who look to exploit information gaps, are targeting the ESG sphere underlines the complexities facing investors in accurately gauging companies¡¯ sustainability credentials. Teenage climate activist Greta Thunberg last week spoke of CEOs masking inaction with ¡°creative PR.¡±
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