* Investor group launches unprecedented initiative
* Group manages assets worth more then $10 trillion
* BP, Shell and Eni among companies piloting the scheme
(Adds Shell response)
By Ron Bousso and Simon Jessop
LONDON, Sept 15 (Reuters) - Investors managing more than $10
trillion on Wednesday published an ambitious blueprint for
energy companies seeking to tackle climate change, including
sharp cuts to greenhouse gas emissions and a winding down of oil
and gas production.
The unprecedented initiative - dubbed the Net Zero Standard
for Oil and Gas - details 10 required standards to help money
managers compare companies' strategies and understand whether
they are aligned with United Nations-backed efforts to reduce
global carbon emissions to net zero by 2050.
Oil and gas companies such as BP and Royal Dutch
Shell have published targets and strategies aimed at
battling climate change, but the huge variation in scope,
definitions and ambition makes analysis and comparison
exceedingly difficult for investors.
At the same time, pressure has grown on portfolio managers
and banks to ensure that their investments chime with the 2015
Paris accords to limit global warming to no more than 2 degrees
Celsius above pre-industrial levels.
With the next round of global climate talks taking place in
November, concern is growing that too many plans are flaky and
unlikely to provide material help by reducing absolute emissions
at the rate needed to limit global warming.
"We need to have a level playing field now on disclosure
because it's not possible to compare and contrast across the
sector," said Adam Matthews, who is head of responsible
investment at the Church of England Pensions Board and chaired
the investor-company process to develop the new initiative.
Other investors to back the plan include Amundi,
Europe's biggest asset manager, along with Britain's Legal &
General Investment Management, HSBC Global Asset Management
and state-backed Canadian investor Caisse des Depots
among others.
Given the fossil fuel industry is responsible for the lion's
share of global emissions, the investor group said it is
introducing a minimum set of standards to ensure that energy
companies' plans are "credible".
NET ZERO TARGETS
Among these is a requirement to reach net zero carbon
emissions by 2050, meeting emissions-reduction targets along the
way while aligning capital expenditure and production plans with
the net zero target.
The standards also demand commitments to disclose and
independently verify strategies.
Shell, Italian company Eni and Norway's Equinor
have all set targets to become net zero emissions by
2050, meaning that any emissions they produce will be offset by
carbon capture technologies or other solutions, such as
reforestation.
Other companies, including BP and TotalEnergies,
aim to reduce emissions from part of their operations to net
zero by 2025.
The investor group behind the new plan acknowledges that
winding down oil and gas production "can be a very legitimate
strategy", Matthews said.
Although it has not set a deadline for companies to adhere
to the standards, investors are willing to vote against
transition plans and the appointment of certain directors if
they feel company boards are not doing enough, Matthews said.
The new standard will be piloted by leading energy companies
including BP, Shell, Eni, Repsol and TotalEnergies
ahead of wider adoption by the sector, the investor group said.
Shell said in a statement that it was pleased to take part
in the pilot and that "establishing a standard approach that
allows investors to fairly assess companies' progress would be a
valuable development."
This group said its plan had been developed by the
Institutional Investors Group on Climate Change with support
from the Transition Pathway Initiative and in consultation with
Climate Action 100+, non-governmental organisations with
specific expertise in the sector as well as oil and gas
companies themselves.
For a factbox on Big Oil's climate targets, click
(Reporting by Ron Bousso and Simon Jessop; editing by David
Goodman)
