"Stranded assets: what next? How investors can manage increasing fossil fuel risks", 16 Apr 2015

Stranded assets are those that lose value or turn into liabilities before the end of their expected  economic life. In the context of fossil fuels, this means those that will not be burned...We believe the risks of this occurring are growing. ..Burning fossil fuels releases greenhouse gas emissions, leading to dangerous levels of climate change...As well as climate regulation, stranding can be caused  by reactionary regulator drivers that tackle issues  like health and safety and pollution. For instance, oil spills and explosions leading to loss of life can lead  to some oil sectors becoming temporarily, or permanently, non-viable...[I]nvestors should decide how to manage asset stranding risks, taking into account both their climate  commitment and fiduciary duty. Divestment is one option, whether 100%, partial divestment by revenues  or sectors, looking further along the value chain to fossil fuel consumers or by screening out worst-offenders...Holding onto stocks allows investors to engage with companies and encourage best practice, although there are reputational as well as economic risks to staying invested.