Private investors in wealthy nations face the largest risks from stranded fossil fuel assets
In short: Researchers who mapped the ownership of 43,439 oil and gas production sites found that the financial risk of stranded assets is disproportionately borne by private investors in advanced economies. The study estimated that global stranded assets—defined as the present value of future profits lost due to climate policy—could exceed US$1 trillion.
The study traced equity risk through a network of 1.8 million companies to identify ultimate owners. It revealed that more than 15% of global risk is transferred to OECD-based investors, including significant exposure via pension funds and financial markets.
This highlights how wealthy nations are deeply tied to the fossil fuel economy as both supporters and primary victims of transition risks. However, the study is based on calculations of present value under plausible policy changes rather than realized losses.
Why it matters: Wealthy nations hold a disproportionate share of the financial risks associated with the global transition away from fossil fuels.
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