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A group representing major institutional investors has unveiled a net-zero standard for carbon emissions that sets "minimum expectations" for oil and gas companies to develop "credible" energy transition plans. The standard emphasizes the need for comprehensive targets for reducing emissions intensity and absolute emissions, as well as the need for companies to align their capital spending and production plans with those targets. The initiative is backed by a group of about 20 major institutional investors with combined assets under management worth more than $10 trillion. They belong to the Institutional Investors Group on Climate Change (IIGCC), which developed the standard in consultation with major oil and gas companies including BP, Royal Dutch Shell and TotalEnergies. These companies will now move forward with a trial to test implementation of the standard, which is intended to lead to a wider rollout across the industry. The IIGCC standard states in clear terms that net zero must include Scope 3 emissions caused by the use of a company's products, in addition to the Scope 1 and 2 emissions attributable to its own operations. However, it also recognizes that there are "a number of potential ways to reach net zero." Those could include diversification into power generation or petrochemicals, as well as carbon capture, offsets and a gradual retreat from oil and gas production.

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