Transitioning to net Zero: Assessing the impacts on asset impairment, write-downs and the going concern of oil and gas companies operating in the UK

Abdo, Hafez; Angwin, Duncan; Owusu, Freeman Brobbey; Othman, Hakim Ben

Abstract

In June 2019, the UK government legislated a net zero target by 2050. This will directly impact the UK oil and gas industry. This study reports perceptions of key oil and gas professionals regarding the impact of transitioning to net zero on impairment, values, write-downs, and going concern in the UK oil and gas industry, as well as required net-zero-related disclosures. Data were collected through 22 interviews, two written responses to our interview questions, and disclosures made by oil and gas companies in their annual reports. We use conservatism and stakeholder theory to inform our results. Our findings confirm there will be serious impacts of the transition to net zero on impairments, asset write-downs, and on the value and going concern of several oil and gas companies. However, these impacts will not fall equally across the industry, and it is likely therefore that stakeholders will be affected differently. Our results contribute, first, to the debate on the impacts of the transition to net zero on key accounting measures of oil and gas companies; second, we identify risks associated with the transition to net zero for these companies and their stakeholders, and we classify the at-risk oil and gas companies operating in the UK; third, we present a collection of disclosure items deemed necessary by our interviewees. Our specified disclosure items may complement those of the Task Force on Climate-related Financial Disclosures (TCFD) and the Transition Plan Taskforce (TPT).

Citation

Abdo, H., Angwin, D., Owusu, F. B., & Othman, H. B. (2025). Transitioning to net Zero: Assessing the impacts on asset impairment, write-downs and the going concern of oil and gas companies operating in the UK. Global Environmental Change, 92, Article 103004. https://doi.org/10.1016/j.gloenvcha.2025.103004

• Journal Article Type: Article
• Acceptance Date: Apr 21, 2025
• Online Publication Date: Apr 28, 2025
• Publication Date: 2025-07
• Deposit Date: Apr 23, 2025
• Publicly Available Date: Apr 29, 2026
• Journal: Global Environmental Change
• Print ISSN: 0959-3780
• Electronic ISSN: 1872-9495
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 92
• Article Number: 103004
• DOI: https://doi.org/10.1016/j.gloenvcha.2025.103004
• Keywords: going concern, impairment, oil and gas, net zero, write-down
• Public URL: https://nottingham-repository.worktribe.com/output/48093633
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S095937802500041X
• Additional Information: This article is maintained by: Elsevier; Article Title: Transitioning to net Zero: Assessing the impacts on asset impairment, write-downs and the going concern of oil and gas companies operating in the UK; Journal Title: Global Environmental Change; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.gloenvcha.2025.103004; Content Type: article; Copyright: © 2025 The Author(s). Published by Elsevier Ltd.