Stranded assets & transition finance
Since our inception we have conducted pioneering research on stranded assets and continue to undertake significant research on the topic.
A core part of this work is researching environment-related risks that can strand assets across different sectors, geographies, and asset classes; how such risks are emerging; how they might be interrelated or correlated; their materiality (in terms of scale, impact, timing, and likelihood); who will be affected; and what affected groups can do to pre-emptively manage these risks.
Growing from and related to this, is work on transition finance, which is the provision and use of financial products and services to support counterparties, such as companies, sovereigns, and individuals, realise alignment with environmental and social sustainability (Caldecott, 2020).
Counterparties successfully transitioning towards sustainability is one critically important way to avoid future stranded assets. We are exploring how counterparties can do this, the role of finance and financial services in enabling transitions, and the reforms needed in policy and regulation to support a more rapid transition.
Research topics include:
- Financial products and services to support the transition, including sustainability-linked instruments
- Implications of stranded assets on corporate strategy
- Reforming the financial system and the role of central banks and supervisors
- The future of different sectors particularly exposed to stranded assets
- Stewardship and engagement as a tool to support the transition, including engagement in asset classes beyond listed equities, measuring engagement performance, and place-based engagement
- Firm-level ESG performance and its relationship with macro-economic performance
- Changing risk preferences across the financial system as a result of the energy transition
- Analysing performance of (un)sustainable investments in different asset classes using novel datasets
Projects, programmes, and special initiatives
- Transition Plan Taskforce (TPT)
- Energy Transition Risk and the Cost of Capital Project (ETRC)
- Climate Stress Tests and Scenarios Project (CSTS)
- UK Centre for Greening Finance & Investment (CGFI)
Dr Ben Caldecott
José Luis Reséndiz
- Dr Jacob Schumacher | Senior Research Associate
- Anthony Limburg | Research Assistant
- Ira Poensgen | Research Assistant