Most recently, a report from The Carbon Tracker with a forward by Lord Stern of the Grantham Research Institute on Climate Change (London School of Economics), argued that serious risks are accumulating for investors in
high carbon assets, such as coal mining companies and the oil and gas industry.
«Investments with more carbon translate to higher risk, not just from potential carbon fees or pricing, but also from shifts in technology that can leave
high carbon assets stranded,» said Erik Solheim, Head of UN Environment.
Not exact matches
Next, divest where appropriate from
high - cost,
high -
carbon assets and reinvest in new instruments like «green bonds» or equity indexes that exclude companies with
carbon exposure.
It would have to reduce the risks of
high -
carbon assets while simultaneously scaling up capital for the low -
carbon transition.
It also allows for a smoother reallocation of investment away from
high -
carbon towards low -
carbon technologies and infrastructure, avoiding the risk of stranded
assets and economic disruption.
It says investors that currently have
high exposure to
high -
carbon assets are at risk of possessing «stranded
assets» — a term used to describe financially worthless investment stocks.
Developing and implementing these strategies ensures alignment with the long - term goals of the Paris Agreement, in a way that fosters increased prosperity for citizens, reduces the risk of locking - in unsustainable and
high - emission infrastructure, and will help to avoid stranded
high -
carbon assets.
Through pioneering analysis into the «
carbon bubble» and «stranded
assets»,
Carbon Tracker investigates the financial risks faced by
high -
carbon investments in the face of a rapid energy transition.
By avoiding investment in
high -
carbon assets that become obsolete, and by prioritising sustainable alternatives, we build capacity and resilience, particularly for more vulnerable people — while lowering
carbon emissions.
One of the most frequent arguments against sustainable investing is that it won't yield as much money as investing in fossil fuel
assets,
high -
carbon companies or weapons manufacturers.
The Alberta government could see to it that the energy producers refined the stuff into synthetic crude oil on site but this is a
high - cost,
high -
carbon asset already at some risk of becoming «stranded.»
«Given the amount of money you're spending on
high - cost,
high carbon projects... given your demand restraints due to
carbon asset risks, we think a more prudent use of capital is to return more money to shareholders through dividends and share buybacks.»
Companies in
carbon - heavy industries such as energy and mining face the
highest pressure, as investors fear being stuck holding stranded
assets: companies who fail to plan for the future and whose valuations will likely plummet as a result.
Investment - grade climate change and clean energy policy is required to shift private sector investment from
high -
carbon to low -
carbon assets.