Stranded asset

Stranded assets (including ‘strandable assets’) are those assets or investments (both active or firmly planned) which, at some time prior to the end of their economic life, are no longer able to earn an economic return as a result of changes in regulation, market forces, technological innovation, or environmental factors (including climate change and the transition to a lowcarbon economy). These typically include assets that have suffered (or are expected to suffer) from unanticipated or premature write-downs, devaluations, or conversion to liabilities; as well as assets with significant locked-in GHG emissions over their operating lifetime. The term ‘stranded assets’ focuses on what has already occurred at the date of the disclosures and might already be reflected in the financial statements (in which case these can be crossreferenced), while the term ‘strandable assets’ refers to a forward-looking assessment that takes into account a given future scenario.