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Illustration: Sarah Grillo/Axios

The relationship between a company’s climate disclosure and its potential future performance is becoming easier to see.

Why it matters: The SEC is readying new rules around mandatory risk and climate commitment disclosures, which will likely help investors compare companies on an equal footing.

State of play: More than 90% of S&P 500 companies have sustainability reports on their website, Wes Bricker, PwC co-leader of US Trust Solutions, tells Axios.

  • But voluntary reports often lag and are disconnected from required financial reports — making it hard for investors to see the impact of climate goals and issues on capital expenditure and operations, he adds.

Between the lines: Very few companies have tallied up full costs, says Bricker.

  • That’s because there are so many factors at play, such as whether an existing business model can absorb the cost of carbon, he adds.
  • Yes, but: Through reporting, companies can show how their sustainability investments meet business performance, he says.

One example: Companies that build resilience against climate hazards will have competitive advantages that will drive shareholder return, Harry Bowcott, senior partner at McKinsey, said on Monday during Climate Week NYC.

  • “Investor, regulator and customer assessment of resilience will impact valuations, capital raises, balance sheet risks, brand strength, supplier footprints as well as customer willingness to pay,” says Bowcott.

The big picture: Efforts to fight climate change and transition to a green and circular economy will mean at least $4 trillion to $5 trillion in annual global investments (financed mostly by the private sector) — "a COVID event every year for the next 30 years," Dickon Pinner, senior partner at McKinsey, also said on Monday.

  • "It's a complete restructure of the [global] economy — a massive, massive deal."

Go deeper

New Zealand passes "world-first" climate change disclosure law for banks

Commerce and consumer affairs minister David Clark and Prime Minister Jacinda Ardern at Parliament in Wellington, New Zealand, in 2018. Photo: Mark Tantrum/Getty Images

New Zealand passed a "world-first" law requiring financial institutions to disclose and act on climate change impacts concerning their businesses, officials announced Thursday.

Why it matters: About 200 of the "largest financial market participants in New Zealand" will have to "disclose clear, comparable and consistent information about the risks, and opportunities, climate change presents to their business," per a statement from commerce and consumer affairs minister David Clark.

What to know about COP26 in Glasgow

A banner advertising the upcoming COP26 climate talks in Glasgow, U.K., on Oct. 20. Photo: Ian Forsyth/Bloomberg via Getty Images

More than 100 world leaders — as well as thousands of diplomats and business leaders — are set to converge on Glasgow, Scotland, starting Oct. 31 to try to set new emissions reduction goals at the COP26 climate summit.

Why it matters: It's an annual meeting, but this year's assembly is viewed as crucial, since climate scientists warn that time is running out to secure necessary greenhouse gas emissions cuts to avoid potentially devastating climate change impacts during the next several decades.

Fossil fuel executives to testify at "landmark" hearing focused on climate disinformation

An oil flare at a BP plant in Whiting, Indiana. Photo: Luke Sharrett/Bloomberg via Getty Images

The House Committee on Oversight and Government Reform announced on Friday it will hold a "landmark" hearing next week with fossil fuel executives focused on the industry's role in spreading climate disinformation.

Why it matters: This is the first time oil company CEOs, and the head of their main trade group, will testify under oath about their knowledge of the link between burning fossil fuels and climate change, per Axios' Andrew Freedman.

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