Towards a sociology of stranded assets

The phenomenon of 'stranded assets' has gained prominence in light of accelerating climate change.The concept refers to 'assets that have suffered from unanticipated or premature write-downs, devaluations or conversions to liabilities' (Caldecott, Howarth, and McSharry 2013, 7).Assets such as those linked to emission-intensive industries might strand due to climate policy action.Alternatively, physical risks related to global warming such as rising sea levels might strand assets such as coastal property.This commentary critically assesses the concept of stranded assets that has been predominantly studied in finance, accounting, and environmental economics.While these accounts have made important contributions to understanding the potential causes for assets to strand and how actors might react to the threat of asset stranding (e.g.Caldecott et al. 2021;Semieniuk et al. 2022; van der Ploeg and Rezai 2020; Wake 2020), their models suggest that actors' decisions can be derived from the supposedly inherent properties of these assets.There is, however, no inherent nature of an asset that determines asset-owners' decision-making.Instead, I argue that it is the actors' interpretation of the future and the associated future asset value that guides decisionmaking, which is a deeply social, cultural, and political process; a research problem necessitating a sociological lens.This commentary will introduce a sociological conceptualization of agency in order to understand the various decision-related factors leading to asset stranding and outline both the theoretical and empirical implications for prospective research.The existing body of literature investigating the relationship between climate-related risks and asset devaluation has focused predominantly on emission-intensive industries that perpetuate the negative effects of global warming.Prevalent scholarship therefore focused on environmentally unsustainable assets such as fossil fuel industries that strand as a result of climate-related transition risks (cf., Caldecott et al. 2021, 420) such as climate policy action (cf., Semieniuk et al. 2022; van der Ploeg and Rezai 2020; Wake 2020), consumer pressure, and (green) technological transitions (Mercure et al. 2018).A more recent account suggests extending research on stranded assets beyond 'unburnable carbon' (Caldecott et al. 2021, 418) to consider 'risks related to physical climate change, biodiversity loss, and litigation related to environmental factors'so-called physical risks (ibid).The stranding of assets in relation to both physical and transition risks is argued to result in major losses for investors (Colgan, Green, and Hale 2021;Semieniuk et al. 2022).Within these accounts societal actors are exclusively defined through the asset-ownership status and the policy preferences that are assumed to be associated with that status (Colgan, Green, and Hale 2021).Colgan, Green, and Hale (2021, 586) differentiate between asset ownership of 'climateforcing' assets (CFA) such as fossil fuel plants and 'climate-vulnerable' assets (CVA) such as coastal property.