Stranded assets: a real risk

Year Published

2020

Contributing Organizations

Transforma

Type of Resource

Research/Insights Report

Languages

Spanish

Relevant Topics

Core Topic

Climate & Transition Finance

Target Audience

Asset Managers

Asset Owners

Advisors & Consultants

Banks

Governments & Policymakers

Relevant Geography

Latin America and the Caribbean

Resource Description

This document explains the concept of stranded assets, as investments that may lose value or become obsolete due to climate change and the transition to a low-carbon economy. It focuses on the implications for investors and financial institutions.

Why This Matters

Understanding and addressing stranded asset risks helps investors avoid losses and redirect capital toward sustainable opportunities, supporting alignment with global climate goals and the Paris Agreement.

Key Insights

Identifies key drivers of asset stranding, including regulatory, market, technological, and reputational changes
Highlights certain sectors such as fossil fuels, mining, and heavy industry
Emphasizes the financial risks for investors and the importance of climate risk assessment and scenario analysis
Recommends portfolio diversification and integration of climate factors into investment strategies

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