Tamara Close

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Tamara Close is the Founder of Close Group Consulting, and former Head of ESG Integration for KKS Advisors and has over 20 years of combined experience in the global capital markets and ESG strategy.

Tamara Close

May 25 2022

Can short selling be used as a carbon offset?

Illuminem Voices

Environmental Sustainability · Carbon Market

There has been a great deal of debate in the last few months on whether short positions can act as offsets to the carbon emissions of long positions in a portfolio, through the netting of carbon exposures. As investors increasingly make net zero carbon emissions commitments and increasingly aim for real world impact in their portfolios (for E and S issues), how short positions are accounted for is a critical issue. This paper addresses the subject of whether a short position in a carbon emitting company can be perceived as a carbon offset for a long position in another carbon emitting company within the same portfolio.