Climate change 'stranded assets' could slash countries' credit ratings: Fitch

Reuters

Published Feb 15, 2021 11:30AM ET

LONDON (Reuters) - The cost of so-called 'stranded assets' as the world moves away from fossil fuels could cause substantial falls in exporters' sovereign credit ratings in the coming decades, a new report from Fitch said on Monday.

The global push to limit climate change is expected to cut demand for coal, oil and gas, and the infrastructure required to get them out of the ground, turning them into 'stranded assets' that will never be fully utilised.

"A simulation on FitchRatings' Sovereign Rating Model (SRM) suggests the fairly direct effects could lead to a fall in the SRM output by around one rating notch by 2040 and two to three notches by 2050 for a major oil exporter," Fitch's report said.