Glossary
Climate and transition
What is stranded asset?
An asset written down before the end of its economic life.
The endpoint of transition risk. The loss is rarely a single event; it is a refinancing that never happens at a price anyone will accept.
A worked example
A coal mine carried at $500m with 20 years of reserves is written down to $150m when its main customer commits to closing its coal plants within eight years. The coal is still in the ground. Nobody wants to pay for it.
Where it catches you in the game
- Challenge runs put stranded books on your desk and ask what you do with them.
Related terms
Learn it by using it
Definitions stick once they've cost you money. Take a seat, make three calls a year and watch what stranded asset does to your returns.