There is a significant gap between the way companies identify climate-related risks and opportunities and how they are preparing to tackle them.

That’s according to a new report released today by CDP and the Climate Disclosure Standards Board (CDSB), which is based on research from 1,681 companies across 14 countries and 11 different sectors.

It says only a tenth of businesses currently provide incentives for board members to manage climate-related risks and opportunities, despite more than 80% overseeing climate change issues at the board level.

The report shows companies from China, as well as the global healthcare and financial sectors, are lagging behind in governance, risk management, metrics and targets but says this could change for China as new mandatory reporting policies come into force this year.

Companies in France, the UK and Germany are leading the way, with the majority acknowledging climate change poses financial risks for their business.

Around 83% of companies recognise the physical dangers of climate change and 88% believing dealing with new regulations as a result is likely to be their main concern.

The CDP and CDSB say disclosure is improving but now needs to be embedded into corporate strategy at all levels, with firms setting real emission reductions and renewable energy targets.

Jane Stevensen, Task Force Engagement Director at CDP, said: “2018 is the year when companies need to step up climate action as we approach a tipping point.

“Fundamental to this is driving board level engagement with climate risk throughout the organisation.”