Climate-focused investor initiative Climate Action 100+ announced today that it will release a new benchmark, aiming to provide comprehensive analysis on which companies are leading the transition to net-zero emissions. The ‘Climate Action 100+ Net-Zero Company Benchmark’ is expected to be launched in 2021.

Climate Action 100+ is an investor initiative, with over 500 investors representing more than $47 trillion in assets, that targets the world’s largest corporate greenhouse gas emitters to promote taking necessary action on climate change.

According to the organization, the new benchmark has been designed to clarify investor expectations, and will be used to evaluate company action and ambition demonstrated in tackling climate change. Addressing a need to standardise what constitutes a ‘net-zero aligned’ business strategy and how to measure alignment with a 1.5°C transition pathway, the benchmark initiative will provide guidance for companies to identify the path that is needed to address this issue in their respective sectors and regions.

Mindy Lubber, Ceres CEO and President and Climate Action 100+ Steering Committee member, said:

“The Climate Action 100+ Net-Zero Company Benchmark is a critical investor engagement tool to make further progress at speed and scale with the world’s largest corporate emitters on climate change. It will send a strong message to corporate boards and management that companies across sectors have already begun to make the shift to a net-zero emissions business, and it is time for the rest to follow. Investors are ready to engage the initiative’s focus companies to raise their climate ambition in order to accelerate the global transition to a net-zero emissions economy.”

Along with the launch of the benchmark, the organization also announced that it is sending a letter to the CEOs and Chairs of the Board of 161 companies, representing up to 80% of global industrial greenhouse gas emissions, calling on the businesses to put in place net-zero business strategies and define targets to support delivery. The letters inform CEOs that companies will be assessed on progress made in becoming net-zero businesses.

The letter calls for companies that have not yet done so, to come forward with net-zero business strategies, while making clear that the strategies aim to achieve net-zero emissions by 2050 or sooner, covering emissions across the full value chain, inclusive of scope 3 emissions covering end use of products. The companies are urged to define related targets and goals to deliver emission reductions in line with the science on limiting global warming to 1.5°C.

Fiona Reynolds, CEO of the Principles for Responsible Investment (PRI) and Climate Action 100+ Steering Committee member, said:

“Investors and their beneficiaries are becoming increasingly vocal and demanding more tangible climate action on the part of companies, especially those that are high emitters of greenhouse gases. Central to achieving climate goals is the setting of clear targets on how companies plan to move to net-zero as well as ensuring that they are transparent and held accountable for actions taken.”