“Hedge funds keen to get a piece of the $40 trillion ESG market are voicing growing frustration over what they say is an absence of clear regulations for one of their most popular investment strategies.
Firms including Man Group Plc and BlueBay Asset Management LLP say disclosure rules for environmental, social and governance investing still don’t explain how hedge funds should account for short selling. As a result, many are now turning to their lawyers to help them avoid the kinds of legal risks that might arise if they misstate their ESG positions.”
[COMMENTARY]Short selling has always been controversial. However, given proper rules — such as only being able to short a stock after a price uptick — it’s been part of stock market practices for millennia. It seems the new European Sustainable Finance Disclosure Regulation doesn’t adequately cover rules for short-sellers.
Hedge Funds Balk at ‘Really Problematic’ Rules Steering ESG, by Lisa Pham, March 18, 2022, Bloomberg, UK.