CFM's views on Shorts and Derivatives

30 May 2022

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In response to the discussion paper recently issued by the
IIGCC about the integration of shorts and derivatives in
carbon footprint accounting, we suggest going back to the
three different transmission mechanisms investors can use to
exert influence on corporate behaviour: providing cash to
fund operations, decreasing or increasing cost of capital, and
engaging.

Besides the physical ownership of shares, we show
that other instruments typically deployed by hedge funds
offer a real capacity to influence, using a different mix of
channels, and shouldn’t be disregarded. Hedge funds can and
should in fact also be steered towards playing a meaningful
role, based on their specific approach to investing, in the
global push towards net zero.

Read the full report here.

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