Stranded Assets
Stranded assets are investments or resources that lose their value prematurely due to the transition to a low-carbon economy, including fossil fuel reserves, carbon-intensive infrastructure, and high-emission buildings.
What is Stranded Assets?
The concept of stranded assets emerged from the recognition that if the world meets its Paris Agreement targets, a significant portion of known fossil fuel reserves cannot be burned. This extends beyond fossil fuels to include carbon-intensive industrial assets, buildings that fail to meet tightening energy efficiency standards, and infrastructure dependent on high-carbon supply chains. For investors, stranded asset risk means potential write-downs of portfolio value.
Practical Examples
A commercial property rated EPC F becomes unlettable under MEES regulations, stranding the landlord’s investment until the building is retrofitted.
An oil company writes down $5 billion in Arctic exploration assets as long-term demand projections decline under net zero scenarios.
How Climatise Helps
Climatise helps organisations identify carbon-intensive assets within their portfolio, supporting assessment of stranded asset risk from regulatory and market changes.
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