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 and 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.
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.