Stranded assets and the fossil fuel divestment campaign: What does divestment mean for the valuation of fossil fuel assets?

Ansar, Atif, Caldecott, Ben and Tilbury, James (2013) Stranded assets and the fossil fuel divestment campaign: What does divestment mean for the valuation of fossil fuel assets? Technical Report. Smith School of Enterprise and the Environment.

Abstract

‘Stranded assets’, where assets suffer from unanticipated or premature write-offs, downward revaluations or
are converted to liabilities, can be caused by a range of environment-related risks. This report investigates the
fossil fuel divestment campaign, an extant social phenomenon that could be one such risk. We test whether
the divestment campaign could affect fossil fuel assets and if so, how, to what extent, and over which time
horizons.

Divestment is a socially motivated activity of private wealth owners, either individuals or groups, such as
university endowments, public pension funds, or their appointed asset managers.1 Owners can decide to
withhold their capital—for example, by selling stock market-listed shares, private equities or debt—firms
seen to be engaged in a reprehensible activity. Tobacco, munitions, corporations in apartheid South Africa,
provision of adult services, and gaming have all been subject to divestment campaigns in the 20th century.
Building on recent empirical efforts, we complete two tasks in this report. First, we articulate a theoretical
framework that can evaluate and predict, albeit imperfectly, the direct and indirect impacts of a divestment
campaign.

Second, we explore the case of the recently launched fossil fuel divestment campaign. We have documented
the fossil fuel divestment movement and its evolution, and traced the direct and indirect impacts it might
generate. In order to forecast the potential impact of the fossil fuel campaign, we have investigated previous
divestment campaigns such as tobacco and South African apartheid.

Item Type: Monograph (Technical Report)
Subject(s): Project management
Date Deposited: 24 Jan 2014 09:59
Last Modified: 09 Dec 2015 15:53
URI: http://eureka.sbs.ox.ac.uk/id/eprint/4950

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