Information Gaps: Climate Change and Fact Short-Sellers

information gaps: 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, according to The Japan Times. Teenage climate activist Greta Thunberg last week spoke of CEOs masking inaction with creative PR. Against a backdrop of growing public and political concerns about climate change and economic inequality, companies are under increasing pressure to show they are taking greater responsibility for how they generate their profits. Now short-sellers spy an opportunity. Investments defined as sustainable account for more than a quarter of all assets under management globally, according to the Global Sustainable Investment Alliance. 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. About 31 trillion has been invested, buoyed by analyst reports that show companies with strong ESG narratives outperform their peers. (news.financializer.com). As reported in the news.