stranded assets
STRAN-did ASS-ets
/ˈstrændɪd ˈæsɛts/
Assets that have suffered from unanticipated or premature write-downs, devaluations, or conversion to liabilities.
In the energy sector, this refers to oil and coal reserves that can never be burned if we are to meet climate goals, making them worthless.
The story behind the word. To 'strand' something is to leave it on the shore (the 'strand'), like a whale or a ship. 'Assets' comes from the French 'assez', meaning 'enough'. Stranded assets are 'enough' value that has been left high and dry by the tide of history.
Word relationships
- obsolete assets: Obsolete assets are just old; stranded assets are specifically those devalued by external shifts like policy or technology.
Commonly confused with
- sunk costs: Sunk costs are money already spent that can't be recovered; stranded assets are things you own that have lost their future value.
Collocations
- risk of stranded assets
- fossil fuel stranded assets
- potential stranded assets
Example sentences
- "Investors are worried that coal mines will become stranded assets as the world shifts to renewables." Financial Risk
- "The risk of stranded assets is a major concern for the banking sector's stability." Economic Theory
Memory hook
Think of an oil rig 'STRANDED' on a beach because no one wants its oil anymore. Left high and dry.
When not to use
Don't use it for a broken car. Use it for investments or resources that lose value because the world has moved on from them.
Fun facts
- The concept of stranded assets was popularized by the Carbon Tracker Initiative to warn investors about the 'carbon bubble'.
Related words
Explore more words
Depreciation, asset, decarbonization, insolvent, sequestration, solvency
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