Climate Action 100+ will assess target companies against their historical decarbonisation as part of a swathe of additions and alterations to its widely-used assessment framework announced today.

The initiative’s Net Zero Company Benchmark assesses 166 firms against a series of indicators on topics including targets, capex, lobbying and governance, as well as providing assessments of the alignment of company actions with the Paris Agreement.

The changes follow an industry consultation on the benchmark which ended in November and are intended to support investor members as CA100+ moves into its second phase.

The most significant shift is the addition of an 11th indicator, which assesses target companies on their performance on historical emissions reductions.

Firms will be assessed against six metrics, including decreases in emissions intensity over one and three years, as well as decreases relative to sectoral 1.5C pathways. They will also be required to disclose details on factors driving emissions decreases.

Assessments on the Just Transition are also being moved out of their “beta” stage, meaning company evaluations will now be published. There have been minor changes to the metrics under this indicator, with companies now required to disclose quantifiable KPIs used to track progress towards achieving Just Transition targets.

One metric that remains largely unchanged relates to whether decarbonisation projects are developed in consultation with, and with the consent of, affected communities. In the updated framework, there is still no reference to indigenous groups or Free, Prior and Informed Consent.

Jasna Selih, senior stewardship specialist for CA100+, said that while there was no explicit mention of indigenous groups, they were among the “key stakeholder groups” affected by decarbonisation efforts, and that companies would be assessed on whether these groups and others were consulted during the development of Just Transition plans.

She also highlighted the metric that assesses whether affected communities are consulted on and consent to new projects associated with decarbonisation efforts.

The other major change is that all companies on the CA100+ target list will now be assessed on their disclosures on board climate competencies, and how the latter are assessed and improved. Originally a beta assessment limited to Australian firms, this will now be made public and expanded to all focus companies in response to “strong investor demand” in the consultation.

Offset focus

In other areas, the indicator dealing with decarbonisation strategies now requires disclosures on the use of offsets, negative emissions and abatement, while assessments on climate policy engagement now require Paris-aligned lobbying commitments to explicitly commit to a 1.5C goal.

Indicators on TCFD reporting and company targets remain largely unchanged, with minor alterations to timeframes and methodologies.

Separate assessments provided by InfluenceMap of company actions on climate policy engagement have also received a significant enhancement.

CA100+ companies will now receive a ranking of A+ to F based on climate policy engagement carried out by themselves and their industry associations. They will now also be assessed on the quality of policy engagement disclosures, as well as whether these align with companies’ actions.

Selih noted that a key guiding principle in enhancing the benchmark framework was to “ensure as much continuity as possible to allow for year-on-year comparability”, while also adapting it to the evolving landscape and investor requirements.

“The new elements added to the benchmark are based on stakeholder priorities expressed in last year’s public consultation,” she added. “We have also sought to ensure that they are harmonised with other net-zero standards and methodologies.”

CA100+ will carry out the new assessments in April and May, with publication expected in September or October.

François Humbert, lead engagement manager at Generali Asset Management and chair of CA100+’s global steering committee, said results from previous benchmark assessments showed the initiative had inspired an increase in net-zero commitments and climate-related financial disclosures.

“It is now imperative that focus companies move beyond disclosure to action, developing and implementing credible, Paris-aligned transition plans backed by sufficient investment, enabling an orderly transition from a financial and social point of view,” he added.