Oxford
OVERVIEW

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Stranded assets are assets that have suffered from unanticipated or premature write-downs, devaluations, or conversion to liabilities and they can be caused by a variety of risks. Increasingly risk factors related to the environment are stranding assets and this trend is accelerating, potentially representing a discontinuity able to profoundly alter asset values across a wide range of sectors.

Yet environment-related risks that could strand assets are poorly understood and regularly mispriced, resulting in an over-exposure to such risks throughout our financial and economic systems. Some of these risk factors include:

Environmental challenges (e.g. climate change, natural capital degradation)
Changing resource landscapes (e.g. shale gas abundance, phosphate scarcity)
New government regulations (e.g. carbon pricing, air pollution regulation)
Falling clean technology costs (e.g. solar PV, onshore wind, electric vehicles)
Evolving social norms (e.g. fossil fuel divestment campaign) and consumer behaviour (e.g. certification schemes)
Litigation (e.g. carbon liability) and changing statutory interpretations (e.g. fiduciary duty, disclosure requirements)

The Stranded Assets Programme at the University of Oxford's Smith School of Enterprise and the Environment was established in 2012 to understand these risks in different sectors and systemically.

We research the materiality of environment-related risks over time, how different risks might be interrelated, and the potential impacts of stranded assets on investors, businesses, regulators, and policymakers. We also work with partners to develop strategies to manage the consequences of environment-related risks and stranded assets.

The programme is based in a world leading university with a global reach and reputation. We are the only academic institution conducting work in a significant and coordinated way on stranded assets. We work with leading practitioners from across the investment chain (e.g. actuaries, asset owners, asset managers, accountants, investment consultants, lawyers), with firms and their management, and with experts from a wide range of related subject areas (e.g. finance, economics, management, geography, anthropology, climate science, law, area studies) within the University of Oxford and beyond.

We have created the Stranded Assets Research Network, which brings together researchers, research institutions, and practitioners working on these and related issues internationally to share expertise. We have also created the Stranded Assets Forums, which are a series of private workshops to explore the issues involved. The Global Stranded Assets Advisory Council that guides the programme contains many of the key individuals and organisations involved in developing the emergent stranded assets agenda. The Council also has a role in helping to informally co-ordinate and share information on stranded assets work internationally.

The Programme is led by Ben Caldecott and its work is guided by the Global Stranded Assets Advisory Council chaired by Professor Gordon Clark, Director of the Smith School.