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October 26, 2020 | less than a minute read

ESG in name only? The shorts are watching!

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Jason Manketo

Partner

Get in touch

Jason Manketo

Partner

As investment opportunities branded with the ESG tag continue to attract increased capital flows, the importance of conducting proper due diligence and scrutinising the underlying fundamentals of companies that badge themselves as sustainable is becoming ever more essential.

Boards of directors and executive management should also be particularly wary of overstating the 'green' credentials of the companies they oversee, as an increasing number of investors look for opportunities to assert claims for false, misleading or exaggerated statements made to the market.

“People are looking for any kind of sustainable angle and want to jump on the bandwagon when they see the potential for these new technologies to really be game changers...”.... Nathan Anderson, founder of Hindenburg, says the ESG sector is particularly fertile ground for companies that overstate what they do. “When people feel good about giving away their money or investing their money, they’re less likely to scrutinise where it’s going,” he said.