Named funds. Named positions. Documented P&L. From individual ESG stock shorts to Orsted’s $9 billion collapse to the largest institutional mandate transfers in a decade. Every claim sourced.
By Navnoor Bawa | YouTube: The Mathematical Trader
When BlackRock exited the Net Zero Asset Managers initiative in January 2025, citing legal inquiries from various public officials including state attorneys general, a structural divide in global finance that had been building for three years finally became unmistakable. US asset managers were retreating from ESG commitments under political fire. European and Asian asset managers were doubling down, compelled by pension fund clients with legal obligations to the Paris Agreement. The result was a capital reallocation event measured in the hundreds of billions of dollars — and three distinct categories of hedge fund trade that were, in retrospect, obvious once you understood the mechanics: short the individual ESG-rated stocks whose valuations were mandate-driven rather than fundamental; short the clean energy sectors built for a world of zero rates that now faced a decade of higher ones; and position against the US mega-managers bleeding European institutional AUM to rivals with stronger stewardship records.
This article documents each category in the exact way the trades were executed — with fund names, position names, P&L figures, and primary sources for every claim.
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Part I: The ESG Premium Short — Blue Orca, Anaconda, and the Valuation Unwind
The first and most direct trade was identifying companies whose valuations were artificially inflated by mandatory ESG capital flows rather than by fundamentals, then shorting them.
The thesis, in Soren Aandahl’s own words: Aandahl, the founder and CIO of Texas-based Blue Orca Capital, told Bloomberg in September 2023 that bloated prices could be found “all over ESG” — not because he had set out to target the sector, but because the “great shorts just happen to be in the ESG space.” The reason, he said directly: “so much capital chasing ESG assets” but “so few good ideas.” Climate stimulus was, in his words, feeding “an asset bubble in this space” and sustaining “completely terrible companies.”
Blue Orca’s live positions at time of interview (September 2023):
Enviva Inc. (EVA): A biomass fuel producer carrying an MSCI ESG rating of “A.” Down nearly 90% in 2023 after operational failures emerged. The ESG label had provided valuation support that the underlying business could not.
Li-Cycle Holdings (LICY): A battery recycling SPAC. Down approximately 20% as lithium and cobalt prices collapsed, destroying the unit economics that justified the ESG-inflated multiple.
Anaconda Invest’s live positions (January 2022, Financial Times):
Renaud Saleur, founder of Geneva-based Anaconda Invest and a former trader at Soros Fund Management’s Quantum fund, told the FT in January 2022 that “the end game this year will be to short the Ark-type of stocks in solar and hydrogen.” His live positions, disclosed in that same interview, were:
ITM Power (hydrogen electrolyzer manufacturer, LSE)
McPhy Energy (French hydrogen company, Euronext Paris)
Enphase Energy (ENPH) (US solar inverter manufacturer, Nasdaq)
Anaconda’s fund, Vulcain Kaki Absolute Return, returned 31% net after fees in 2023 (per Anaconda company communications) — the year those positions paid out most fully.
Odey Asset Management’s investor note on Nel ASA:
James Hanbury, a partner at Odey managing approximately $1.3 billion, sent an investor note — seen by the FT — on Norwegian hydrogen group Nel ASA. In it, he wrote that “there is no obvious valuation support with Nel”, describing the company as “lossmaking, cash consumptive” with a failure to “win material contracts or partnerships,” adding that its “medium-term capex needs are not fully funded.” Helikon Investments, Odey, and WorldQuant all held disclosed short positions against Nel, which had risen from NKr5 to NKr35 before falling back to NKr11 — a near-70% collapse from its peak that rewarded funds that had shorted at the high.
The aggregate P&L from Ortex data:
Short sellers of GCL Technology (Hong Kong: 3800) made a combined $111 million through September 21, 2023. Australia-based Plato Investment Management (Head of Long-Short: David Allen, who screens 100+ ESG “red flag” metrics before placing a bet) was among the participants.
Short sellers of Enphase Energy (ENPH) and SolarEdge Technologies (SEDG) combined made approximately $1.5 billion through September 21, 2023. SolarEdge subsequently issued a shock profit warning in Q3 2023, guiding revenue down as much as $200 million and swinging GAAP operating income to a projected loss — vindicating every short that was on before that warning.
Part II: Short the Wind Industry — Argonaut Capital’s “Monumental Misallocation of Capital”
Barry Norris, founder and CIO of London-based Argonaut Capital Partners, ran the most systematically documented short book in the renewable energy sector and was the most outspoken fund manager in the press about his reasoning.
Vestas Wind Systems — the pivot from long to short:
Argonaut had previously been long on Vestas and Siemens Gamesa. In a contemporaneous blog post and Trustnet interview from November 2017, Norris described how he sold out of both positions and “built up significant short positions” after Siemens Gamesa issued a profit warning in July 2017 related to its Indian market exposure — which had accounted for up to a quarter of the group’s profits. He then interrogated Vestas, noting it derived about 30% of its revenues from Germany, where wind auction changes would cause a significant drop in installations. Norris describes the logic directly: “Our lucrative wind turbine investment pivot is a stark example that alpha generation does not require access to proprietary data.”
He subsequently rebuilt short positions in Vestas and other green-energy names as valuations re-inflated during the ESG era, explaining in an FT article: “In a bear market, a company doesn’t trade at 60 times earnings just because it does something morally good.” He had also shorted Tesla and Rivian, calling the latter a “ridiculous valuation” that lacked first-mover advantage.
The hydrogen short — with the physics explained:
In a September 2023 Bloomberg interview, Norris called hydrogen a “complete waste of time” for investors. He disclosed he had built “a few shorts in hydrogen” without naming the companies, and laid out the engineering constraint: “If you’ve got this big capex to build the electrolyzers and they’re operating on wind and solar, you will find that capacity utilization is equivalent to wind and solar capacity utilization, which is at best 30%-to-40%.” His conclusion: “It will never be cost competitive if they’re powered by wind and solar. And what’s the point if they’re not powered by wind and solar?”
This was not an ideological trade. It was a physical constraint argument: the capital cost of an electrolyzer requires high capacity utilization to pay back, but intermittent power sources structurally prevent that utilization. The IRA had catalyzed a 58% increase in low-carbon hydrogen project announcements since its signing — creating exactly the kind of hype-inflated valuations that the physics couldn’t ultimately support.
By September 2023, Norris publicly described in a Trustnet interview that a full third of his short book was in “stocks that have been over-hyped in this energy transition, add no economic value at all and only exist because of government coercion and zero interest rates.” He also told the Merryn Talks Money podcast (Spotify, Nov 2023) — an on-the-record investor conversation — that his fund had been “making money by shorting renewable energy firms.”
Part III: The Orsted Short — The Most Precisely Documented Single Trade
Per Lekander, CEO of London-based Clean Energy Transition LLP ($3.1 billion AUM, 30+ years in energy investing), made the clearest single-name short call in the ESG space with documentary evidence.
In August 2025, Orsted announced a DKK 60 billion (~$9.4 billion) rights offering — the largest European energy sector equity raise since Enel in 2009. Orsted’s shares fell a record 29% on the announcement, wiping approximately $6.5 billion from its market cap.
Lekander responded publicly. In a Bloomberg interview published August 13, 2025, he described the rights issue as “an invitation to short” the stock. His reasoning: the absence of a set offer price, the near-certain discount required to clear the offering, and unresolved operational concerns. He projected the stock would decline further toward DKK 150.
This was the climax of a multi-year deterioration:
Q3 2023: Orsted canceled its Ocean Wind 1 and 2 projects off New Jersey, taking DKK 28.4 billion (~€3.8 billion) in impairments.
Day 1 of Trump’s second term (January 20, 2025): An executive order suspended new federal offshore wind leasing and halted existing permits. Orsted’s Revolution Wind project subsequently received a stop-work order, which it contested in court.
August 2025: The rights offering announcement. The DKK 60 billion raise was eventually completed at approximately a 67% discount, confirming the dilution risk that made the short attractive.
Meanwhile, Anaconda’s Renaud Saleur confirmed a related pivot: his LinkedIn feed shows him announcing in 2023 that Anaconda had covered its Orsted and Vestas shorts and gone long on wind cable manufacturer NKT, offshore wind installation vessel operators Cadeler and DEME — a tactical rotation from short to long on sector recovery names, executed at the bottom of the offshore wind selloff.
Part IV: Mandate Flow Arbitrage — The Slowest and Largest Alpha Source
The most structurally significant trade was not in individual green stocks. It was in the asset management industry itself: long European asset managers gaining mandate share, structurally underweight US mega-managers losing it.
The diagnostic was public and leading: ShareAction’s Voting Matters data showed BlackRock’s support for environmental and social shareholder resolutions fell from roughly 40% in 2021 to just 7% in 2023, then further to 4% in the 2024 proxy season. (BlackRock’s own BIS reporting, which uses a broader proposal universe, put the 2021 figure at 47% across 172 proposals — same directional trajectory, different denominator.) Vanguard’s support effectively went to zero. This data was available months before each mandate withdrawal announcement — giving funds tracking stewardship divergence a reliable leading indicator.
The mandate exits (each individually documented):
PFZW (Netherlands, ~€250bn AUM): The fund pulled approximately €29 billion in total mandates from BlackRock and LGIM, citing misalignment with its ESG-anchored “Investment Policy 2030.” BlackRock’s mandate alone was worth €14.5 billion (~$17 billion). LGIM’s was approximately €15 billion. The assets were redistributed to Robeco, Man Numeric, Acadian, Lazard, M&G, Schroders, UBS, and PGGM.
PME Pensioenfonds (Netherlands, €59bn AUM): Terminated a €5bn (~$5.9bn) BlackRock mandate in December 2025. PME cited that BlackRock no longer acted in its “best interests on issues such as climate risk.” New managers: UBS Global Asset Management and MN.
The People’s Pension (UK, ~£33bn AUM): Pulled £28bn (~$35bn) from State Street in February 2025 over ESG stewardship misalignment. The mandate was awarded to Amundi (£20bn in passive equities) and Invesco (£8bn in fixed income).
NYC Pension Funds: In November 2025, New York City Comptroller Brad Lander recommended that three of the city’s largest pension funds drop their combined $42.3bn BlackRock mandate over “inadequate” climate plans — as confirmed by Bloomberg (November 26, 2025). The recommendation cited BlackRock’s failure to press portfolio companies to decarbonize. The final transfer decision rests with each fund’s trustees.
The total documented capital in motion from ESG mandate exits exceeded $100 billion across confirmed transactions (the sum of the four named withdrawals above alone surpasses it). The beneficiary pool — Robeco, Amundi, Schroders, UBS Asset Management — was entirely identifiable in advance from each pension fund’s published Investment Policy and manager roster.
Part V: The Flow Data — What the Numbers Confirm
The macro-level data closes the loop on trade sizing and directionality.
US ESG funds: According to Morningstar’s annual US Sustainable Funds Landscape report, US sustainable funds experienced their first annual net outflows in over a decade in 2023, totaling $13.3 billion. In 2024, that figure grew to $19.6 billion — the worst consecutive two-year outflow on record. By contrast, conventional US funds received approximately $740 billion in net new money in 2024 over the same period.
BlackRock’s iShares ESG Aware MSCI USA ETF (ESGU) alone lost $9.3 billion in 2023 and continued bleeding into 2024 — its sixth consecutive quarter of outflows as of Q2 2024.
European ESG funds: Europe saw nearly $11 billion of inflows in Q1 2024 alone — more than double the prior quarter. By Q4 2024, European sustainable fund inflows more than doubled quarter-over-quarter to $18.5 billion — precisely as US outflows were accelerating.
This was not noise. It was a clean, structural bifurcation in capital flows across a shared global market — the exact condition under which identified regulatory divergence generates durable, directional alpha.
Part VI: The Political and Legal Architecture
The political backdrop explains why these trades were available at all.
In the legal arena: 11 Republican-led US states filed suit against BlackRock, Vanguard, and State Street, alleging they had pressured coal companies to cut production in pursuit of climate goals. In February 2026, Vanguard settled for $29.5 million without admitting wrongdoing, and committed — among other things — to avoid future participation in climate alliances like NZAM. Texas Attorney General Ken Paxton described the settlement as protecting against “any attempt to push a woke agenda that puts American energy at risk.”
NZAM had suspended its own operations in January 2025 after a series of exits by its largest members. It relaunched on February 25, 2026 with 253 members — down from approximately 325–330 at the time of suspension — with the 2050 net-zero deadline removed from the commitment statement. Only 12 US asset managers signed the revised commitment, down from 44 US signatories before the pause.
The European side of the ledger looked completely different. As NZAM Steering Committee Chair Rebecca Mikula-Wright confirmed to the FT, asset owner pressure from European pension funds was “definitely a very big factor” keeping non-US managers in the coalition. Within weeks of the relaunch, more than 50 pension funds with a combined $3.7 trillion under management had signed an open letter urging asset managers to stay in NZAM.
The Execution Pattern: What Made These Trades Work
Across every trade described above, the alpha source was the same: a regulatory or political constraint forcing capital into or out of assets in ways decoupled from investment merit.
ESG-rated stocks were propped up by mandate-driven buying. When mandates relaxed, the floor collapsed.
Clean energy was priced for a zero-rate world in a high-rate regime. The duration mismatch was known; only the timing of the resolution was uncertain.
US mega-managers were collecting European institutional AUM while adopting positions that guaranteed those mandates would eventually be reviewed. The lead indicator — stewardship voting data — was public, annual, and 12–18 months ahead of the mandate action.
Hydrogen companies were priced for scale economics that their power sources structurally could not deliver. A first-principles engineering analysis — not insider information — was all that was required.
None of these required a view on whether climate change was real. They required only an understanding of how constrained capital flows create mispricings, and how fast those mispricings would unwind when the constraints changed.
US sustainable funds have now recorded 12 consecutive quarters of outflows. The spread between BlackRock’s sub-5% ESG resolution support and European managers’ near-100% is the spread between two mandates that cannot coexist in the same global pension fund portfolio forever. Every quarter that divergence widens, the next mandate transfer becomes more predictable.
The trade is still open.
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Corrections from Original Version
The following factual errors were identified and corrected in this version:
1. Vestas/Siemens Gamesa pivot date (Part II) — Critical correction. The original text dated Norris’s wind turbine pivot to “mid-2022.” The cited Trustnet source (article 773589) and Argonaut’s own published blog post (November 2017) are both explicitly from 2017 and describe a Siemens Gamesa India profit warning from July 2017. The quotes are authentic; the year in the original was wrong. This has been corrected to “July 2017.” Norris subsequently rebuilt green-energy short positions as valuations re-inflated through the ESG era — a separate trade documented in his later 2022–2023 interviews.
2. BlackRock ESG voting figure (Part IV) — Significant correction. The original stated BlackRock’s support fell to “4% in 2023.” Per ESG Dive and ShareAction/ESG Investor data, BlackRock supported approximately 7% of environmental and social proposals in the 2023 proxy season; 4% is the figure for the 2024 proxy season. The sequence is: ~47% (2021) → ~7% (2023) → 4% (2024). This has been corrected.
3. NZAM membership figures (Part VI) — Minor correction. The original stated NZAM had “331 members” before the pause and “254” at relaunch. Per Ballotpedia and Net Zero Investor, the pre-pause count was approximately 325–330 and the relaunch count was 253. Corrected accordingly.
4. People’s Pension figure — Confirmed correct. One verification report questioned the £28bn (~$35bn) figure, suggesting it should be “more than $25bn.” This is wrong. PA Future, IPE, Net Zero Investor, and Wikipedia all confirm £28bn (~$35bn). The original figure stands.
5. State count in ESG lawsuit (Part VI) — Significant correction. The original stated “13 Republican-led US states” filed suit. ESG Dive, ESG Today, PLANADVISER, and the Montana AG’s own press release all confirm Texas plus 10 other states = 11 states total. Corrected accordingly.
6. BlackRock voting figure — source mismatch corrected. The article attributed “roughly 47% in 2021” to ShareAction’s Voting Matters data. The 47% is BlackRock’s own BIS figure (81 of 172 proposals across BlackRock’s full universe). ShareAction’s Voting Matters 2021 report put BlackRock’s figure at ~40% across its curated universe. Both are real numbers from different proposal sets. Since the article cites ShareAction, the figure has been corrected to ~40%, with a parenthetical noting BlackRock’s own broader BIS figure of 47% for transparency.
7. State count — 11 confirmed, “13” rejected. A verifier reversed course citing the NAAG’s case page. This was rejected. The actual complaint, Bloomberg, ESG Today, PLANADVISER, ESG Dive’s settlement analysis (”11 suing states”), and the Axinn antitrust law firm brief all confirm 11 states (Texas + 10 others). The correction to 11 stands.
All sources are direct hyperlinks verified as of March 2026.
Primary Sources
FT Moral Money — NZAM Relaunch & Vanguard Settlement, Feb 2026 | Bloomberg/WealthManagement — Short Sellers Attack ESG Stocks | FT/NYLedger — Hedge Fund Short-Sellers Take Aim at Green Stocks | BNN Bloomberg — Barry Norris Hydrogen Interview, Sept 2023 | Argonaut Blog — Vestas and the 180 Degrees Investment Pivot, Nov 2017 | Trustnet — Argonaut Wind Pivot Interview, Nov 2017 | Trustnet — Argonaut: Energy Transition Is Misallocation of Capital | Merryn Talks Money — Norris Short Book Making Money, Nov 2023 | Hedgeweek — Per Lekander “Invitation to Short” Orsted, Aug 2025 | Bloomberg — Orsted $9bn Rights Issue, Aug 2025 | Orsted.com — Rights Issue Page | Euronews — Orsted Rights Issue Deep Discount | ESG Today — PFZW BlackRock/LGIM Exit | Bloomberg — PFZW Pulls €14.5bn from BlackRock | Green Central Banking — PFZW + People’s Pension Exits | PA Future — People’s Pension Pulls £28bn from State Street | IPE — People’s Pension £28bn to Amundi/Invesco | ESG Today — PME BlackRock €5bn Exit, Dec 2025 | Bloomberg — PME BlackRock Exit | ESG Dive — NZAM/BlackRock Exit | Ballotpedia — NZAM Relaunch 253 Members, 12 US Signatories | Net Zero Investor — NZAM Relaunch Coverage | ESG Today — NZAM Relaunch | ESG News — NZAM Relaunch, $3.7T Asset Owner Letter | ESG Dive — BlackRock ESG Voting 4% (2024) | ESG Investor — BlackRock ShareAction 2023 | ShareAction Voting Matters 2022 | CNBC — BlackRock BIS 47% Figure, 2021 | Morningstar — US Sustainable Funds 2023 Outflows | Morningstar — US Sustainable Funds 2024 Outflows | Morningstar — ESGU Q2 2024 Sixth Consecutive Outflow Quarter | ESG Today — Q4 2024 Europe/US Flow Divergence | Morningstar — Q1 2024 Europe Inflows vs US Outflows | Investment International — 2024 Conventional vs ESG Flows | Orsted — Ocean Wind Cancellation & Impairment, Oct 2023 | ESG Dive — 2023 Morningstar Report (BlackRock ESGU) | Argonaut Capital Blog
Cover photograph: Kidfly182, CC BY 4.0, via Wikimedia Commons.
Cover photograph: Kidfly182, CC BY 4.0, via Wikimedia Commons.