No short answer: hedge funds hesitate on Europe’s ESG rules

SFDR sustainability calculations leave firms uncertain how short positions should be disclosed

Hedge funds keen to get a slice of the action in sustainable investing have been doing so using one of their favourite tools – short-selling. But new European Union disclosure rules on sustainability have left them guessing how they should reflect that strategy.

On February 4, the three European supervisory agencies (ESAs) published a draft version of secondary legislation fleshing out the details fund managers need to disclose about the impact of their investments on sustainability-related