Institutional investors responsible for $10.4 trillion worth of assets unveiled on Wednesday a net-zero standard that sets minimum expectations for what oil and gas companies must include in their plans to become net-zero businesses.
The Institutional Investors Group on Climate Change (IIGCC) published today the ‘Net Zero Standard for Oil and Gas’ initiative, which stresses the need for targets for absolute and intensity emission reduction, as well as aligning capital expenditure and production with a net-zero target.
The standard “acknowledges ‘winding-down’ as a legitimate strategy, as well as diversifying energy offerings or working through a company’s value chain to re-shape demand,” said the group of more than 20 leading global investors, which has engaged with most of the leading European oil firms to inform a set of expectations for the oil and gas industry.
“Following the publication of the standard, IIGCC and lead investors will now move forward with a pilot programme to trial implementation with a core group of leading oil and gas companies, including BP, Eni, Repsol, Shell and Total, and plan for wider roll out across the sector,” IIGCC said in a statement.
“We’re delighted to be part of this effort, which supports our aim to be recognised as an industry leader for the transparency of our reporting,” BP said.
BP, Eni, Repsol, Shell, TotalEnergies, and Equinor have all pledged over the past 18 months to become net-zero energy businesses.
Investors, however, need to “be able to meaningfully compare different company strategies whilst recognising that there is no one size fits all approach to reaching net zero,” said Adam Matthews, Chief Responsible Investment Officer at the Church of England Pensions Board, and Chair of the Net Zero Oil & Gas Standard Dialogue.
The Oil and Gas Sector Net Zero Standard is aimed at doing that.
“It will encourage the consistency of reporting that we need to make this comparison, and it also identifies the strategies that oil and gas companies might include in their net zero transition plans,” Matthews added.