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Financial Analyses of Stranded Assets & the Carbon Bubble

Studies are showing that fossil fuel companies are overvalued because they are dependent on stranded assets -- fossil fuel reserves that will become unburnable. In other words we have a "carbon bubble" that will burst, leaving to a substantial loss of investment value

“Investing in fossil fuel today seems like investing in the whaling industry in the mid 1800s—old technology, still dominant but clearly not the future.” John Streur, president of Portfolio 21.

"The trustees of the University of Dayton are acting as true leaders both from their faith and their financial responsibility in guiding the University. Fossil fuel companies have a valuation that assumes every single drop of oil, everything they have in the ground, will be taken out. More and more people are understanding the financial risk underlying fossil fuels in the stock market and taking the appropriate action. It's not only values, but valuation risk associated with owning fossil fuel companies." Thomas Van Dyck, a senior vice president and financial adviser for the RBC SRI Wealth Management Group


After Bubbles in Dotcoms and Housing, Here’s the Carbon Bubble. Wall Street Journal, 16 May 2013.

Beyond Fossil Fuels – The Investment Case for Fossil Fuel Divestment.  Impax Asset Management.

Bloomberg Carbon Risk Valuation Tool. November 2013.
With stranded assets becoming an increasing concern among investors, Bloomberg has developed a tool that helps illustrate the potential impact of stranding on a company’s earnings and share price.

Canada's Carbon Liabilities: The Implications of Stranded Fossil Fuel Assets for Financial Markets and Pension Funds. Canadian Centre for Policy Alternatives. May 2013.

Carbon Avoidance? Accounting for the Emissions Hidden in Reserves. Association of Chartered Certified Accountants and the Carbon Tracker Initiative.

The Carbon Bubble. The Actuary. September 2013.

Carbon Risks and Opportunities in the S&P 500. Investor Responsibility Research Center Institute for Corporate Responsibility/Trucost. 2009.

Carbon Supply Cost Curves: Evaluating Financial Risk to Oil Capital Expenditures. Carbon Tracker Initiative, June 2014.

Climate Risk: From Obscure to Mainstream. Ceres 2014.

Climate threatens retirement savings
Climate News Network. 10 Dec 2013.

Coal and Carbon: Stranded Assets: Assessing the Risk. HSBC 2012.

Cool Response: The SEC and Corporate Climate Change Reporting-SEC Climate Guidance & S&P 500 Reporting: 2010-2013. Ceres. Feb 2014.

The Financial Case for Divestment of Fossil Fuel Companies by Endowment Fiduciaries. Bevis Longstreth, former SEC Commissioner. 2 November 2013.

Fund managers who ignore climate risk breaching ‘fiduciary duty.’ RTCC. 16 January 2014.

Fund managers worth $14 trillion say climate change influences investments. RTCC. 5 August 2013.

Global Oil Demand Growth – The End Is Nigh. Citi Group, 2013.

Investor Concerns About Fossil Fuels Are Growing.
21 November 2013. Forbes.

Oil and Carbon Revisited: Value at Risk from 'Unburnable' Reserves. HSBC 2013.

Pension Funds that Ignore Climate Change are Failing to Protect Savers. Guardian. 29 October 2013.

The Price of Doing Too Little Too Late. Profundo and Sustainable Finance Lab/Green European Fund, March 2014.

Stranded Assets. FTSE.

Stranded Assets and the Fossil Fuel Divestment Campaign: What Does Divestment Mean for the Valuation of Fossil Fuel Assets? Smith School of Enterprise and the Environment, Oxford University. October 2013.

Stranded Carbon Assets. Generation Foundation.

Systems Not Silos: Investor Perspectives on the Energy System. Meteos.October 2013.

Unburnable Carbon: Are the World's Financial Markets Carrying a Carbon Bubble? London School of Economics and the Carbon Tracker Initiative.

Unburnable Carbon 2013: Wasted Capital and Stranded Assets. Grantham Research Institute and the Carbon Tracker Initiative.

Unburnable fuel: Either governments are not serious about climate change or fossil-fuel firms are overvalued. Economist. 4 May 2013.

What a Carbon-Constrained Future Could Mean for Oil Companies' Creditworthiness. Standard & Poor's and the Carbon Tracker Initiative. 2013.

by Barnhill, David L. last modified Dec 03, 2015 12:49 PM expired
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