The Climate Action 100+ initiative of hundreds of investors is pushing the CEOs and boards of companies to set net-zero greenhouse gas emissions targets and has pledged to track the companies' progress and hold them accountable through engagement and a shareholder resolution process.

Started in 2017, Climate Action 100+ is managed by sustainability advocate Ceres and includes 518 investors representing over $47 trillion in assets, including BlackRock Inc.

The investors initially wanted companies to assess and report on their climate risks and strategies in line with the Paris Agreement on climate change. Oil and gas companies, utilities and power producers collectively make up 43% of the 161 companies targeted by Climate Action 100+. Other sectors targeted include food and beverage, transportation, and chemical.

But now that the initiative has made some initial strides and 50 companies, including energy and metals and mining companies, have indicated they will aim to achieve net-zero emissions by 2050 or sooner, Climate Action 100+ is looking to push more companies to make a net-zero pledge and set interim targets that can be measured. The initiative has also pledged to benchmark companies on their climate pledges and related performance and issue a report on the initiative's findings in the Spring of 2021.

In the Sept. 14 letter, the Climate Action 100+ Steering Committee asked companies to respond by Oct. 20 with three key commitments.

First, companies should pledge, or reconfirm their pledge, to set net-zero targets across all material greenhouse gas emissions including upstream and downstream, and set medium-targets consistent with a global reduction in emissions of 45% by 2030 relative to 2010 levels, the letter said. Second, companies should "work toward" providing disclosures consistent with the Climate Action 100+ benchmark indicators. Third, companies should commit to work with investors to develop net-zero transition action plans to help each sector and the overall value chain achieve net-zero emissions.

Key indicators that the group will consider in its benchmark report include whether the company has set a net-zero target and related short-, medium- and long-term goals; developed a robust decarbonization strategy; and analyzed whether its capital investment in carbon-intensive assets or business lines are consistent with the goals of the Paris agreement.

Other metrics will scrutinize the companies' climate-related lobbying and board oversight strategies, and look at whether companies are reporting in line with the recommendations of the Task Force on Climate-related Financial Disclosures. Another metric will examine if a company has considered how its decisions and actions will impact communities, employees and other stakeholders.

"The outcomes of the (benchmark) analysis and responses of CEOs will also inform investor engagement strategies through Climate Action 100+, particularly for unresponsive or poorly performing companies," the initiative said in a press release. "Where relevant, this will include shareholder activity for the 2021 annual general meeting season."