Global PSSL issues first ever ESG standard on short activism

Global Principles for Sustainable Securities Lending (Global PSSL) today launched a ground-breaking voluntary ESG Standard on Short Activism. It is available online here.

The standard was formally launched by Dr Stech (Founder and CEO, Global PSSL and a Senior Academic at University of Exeter Law School) during Global PSSL’s Virtual Impact Roundtable titled “Introducing a voluntary ESG standard: Short Activism”. It has been produced over the past six months in collaboration with prominent short activists.

Today’s roundtable, moderated by Billy Nauman of The Financial Times, featured a personal keynote address from Davide Mare (The World Bank) titled “Introducing ESG Criteria in Developing Countries Banking Sectors”. The impact roundtable which followed included the co-creators of the new market standard: Carson Block (Muddy Waters Capital LLC), Gabriel Grego (Quintessential Capital Management), and Anne Stevenson-Yang (J Capital Research).

Global PSSL, as a voluntary high-level code, comprises nine principles that align participants with their ESG ambitions. Dr Stech first spoke of his desire to create these Principles at a London conference back in 2018. The initiative gained further momentum when Stech worked with Block, Grego, Hempton and, Stevenson-Yang during 2020/21 to implement Principle 5 dedicated to short selling. A key phrase from this principle, “[this principle encourages] market participants to discover poor governance and environmental and social mismanagement” has been welcomed by pension funds, institutional investors, sovereign wealth funds and banks.

Stech said, “I am delighted to introduce this market standard as a part of a holistic and unifying Global PSSL. This initiative will advance a socially-responsible and beneficial application of short activism. As noted earlier, in our response to the Canadian Securities Administrators, Global PSSL is the appropriate organisation to take an impartial view on short activism and broader securities lending and borrowing. Global PSSL will issue a mechanism by which issuers may also reflect upon the ESG statements in the campaigns that conform with the Global PSSL standard.

Anne Stevenson-Yang emphasised that “High quality research and due diligence play crucial roles in successful short activism. I am delighted to be teaming up with Global PSSL to work on an initiative that balances outstanding research with practical application.”

Gabriel Grego added “It is very encouraging to see a young initiative, such as Global PSSL, tackle the big issues with such focus and maturity. I look forward to working with Dr Stech to advance sustainable finance and help Global PSSL become a gold standard for securities lending and borrowing”

Carson Block said, “Short selling is a venture involving high risk to the individual. But, by its very nature, short activism exposes bad governance, scams, and fraud. It’s reassuring to see someone like Radek co-creates a voluntary framework for short activists to prove their ESG credentials.”

John Hempton (Bronte Capital) was interviewed earlier by Dr Stech and a snapshot was shared during the panel: At the end of the recording Hempton said: “There’ll be a time, in the next few years, when the malfeasance that’s going on right now will be exposed, and what I’m saying won’t sound so radical.” Stech replied “the new normal”.

Global PSSL has received significant funding from the Economic and Social Research Council (ESRC), part of UK Research and Innovation, through Stech’s Sustainable Finance –  Law –  Stakeholders (SFLS) Network. The material from the roundtable will be analysed and shared with the broader stakeholders soon.

For more details, please contact Dr Stech: and/or Ela Slota, Secretary at