Villains or visionaries? Hedge funds short companies they say 'greenwash'

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Tens of trillions of global investment dollars are pouring into companies toutin...

LONDON - Tens of trillions of global investment dollars are pouring into companies touting robust environmental, social and governance credentials. Now short-sellers spy an opportunity.

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”. Some short-sellers, including Carson Block of Muddy Waters, Josh Strauss of Appleseed Capital and Chad Slater of Morphic Asset Management, argue share prices can be bolstered by corporate misrepresentation about sustainability, or so-called “greenwashing”.

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