UK Economy Heading for $141 Billion Loss Caused by Stranded Fossil Fuel Assets, With Pension Funds on Track to Lose $19 Billion

• Global economic exposure to fossil fuel asset stranding risk amounts to $2.28 trillion by 2040
• The UK’s share of this exposure is $141 billion (£113 billion), which equates to around $3,279 (£2,595) per working adult
• $19 billion (£15.2 billion) worth of UK pension funds’ fossil fuel assets is at risk of stranding by 2040, which represents a 13% share of the UK’s total economic loss exposure
• The UK financial system is itself disproportionately exposed to the stranding risk, ranking 9th globally for losses per capita – more exposed than the United States, Italy, and France

6th March 2025 [London, UK] – The UK economy is disproportionately exposed to stranded fossil fuel assets, with potential losses for UK pension savers reaching tens of billions of pounds by 2040, according to a new report from the UK Sustainable Investment and Finance Association (UKSIF) in collaboration with Transition Risk Exeter (Trex).

Their analysis traces the complex web of financial ownership of fossil fuel assets and tracks the exposure of end beneficiaries – such as individual investors, pension funds and governments – to the risk of these assets becoming ‘stranded’. This refers to oil, gas and coal reserves, along with associated infrastructure and investments, that lose economic viability before their expected operational lifetimes as a result of climate policies, technological changes, or shifting market conditions.

Based on current green transition policies, mid-term action plans to cut emissions, and long-term net zero targets, the report finds that global economic exposure to fossil fuel asset stranding risk amounts to $2.28 trillion by 2040 – of which the UK’s exposure is calculated at $141 billion.  In comparison to the cost of climate inaction, this is still a much smaller loss to bear. In a warming scenario between 2.5°C and 2.9°C, climate-intensified natural disasters may lead to $12.5 trillion in economic losses by 2050.

Click here to read the full press release: UKSIF Stranded Fossil Fuel Assets Press Release

Click here to read the full report: UKSIF Stranded Assets Report