Are Stranded Assets an Unexploded Bomb?

Many assets will be uneconomic in a low carbon world, but sectors as diverse as commercial property and tobacco may be seriously unprepared for the financial impact

Cherry Reynard 21 October, 2021 | 10:30
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man in a boat stranded on a rock

Around two-thirds of the world’s GDP is now under a net zero target, with COP26 potentially ushering in even more ambitious carbon goals. To achieve existing goals, finds a recent study from University College London, 90% of coal reserves must stay in the ground, along with nearly 60% of oil and gas reserves.

This will once again raise investor disquiet over “stranded assets” for oil and gas companies. For the International Energy Agency, these are “investments which have already been made but which, at some time prior to the end of their economic life, are no longer able to earn an economic return”.

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About Author

Cherry Reynard  is a financial journalist writing for Morningstar.co.uk.

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