Net Zero will be “impossible” for investors using long-only strategies, according to the head of responsible investing at US hedge fund giant AQR Capital Management.
Speaking yesterday on the topic of short selling and decarbonisation at the Sustainable Investment Forum North America 2021, the $137bn asset manager’s Principal and Head of Responsible Investment, Christopher Palazzolo, told delegates that “Net Zero is really just impossible today through a long only portfolio”.
Palazzolo said that the fund has been able to cut emissions by around 50% in its low-carbon, long only portfolios - through which it runs around $20bn - “with not too much difficulty”. But he added that it becomes “increasingly difficult” to meet investor demands for continual emission reductions beyond that point out towards Net Zero using long only approaches.
Pointing to recent research by AQR, Palazzolo said that cutting emissions in a long only strategy beyond 5…