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New research shows clear gap between companies' awareness of climate risks and actions for tackling them

Ready or not: are companies prepared for the TCFD recommendations?

  • Though a significant majority of companies report board oversight of climate-related matters, only 1 in 10 currently provide incentives for board members to manage climate-related risks and opportunities. Taking responsibility for climate action is not yet linked to boards’ or the management teams’ remunerations;
  • Companies in France, the UK and Germany are leading the way in disclosing information across three out of the four thematic areas highlighted by the TCFD (Governance, Risk Management, Metrics and Targets);
  • Companies from China, the healthcare and financial sectors are lagging behind in the four areas of disclosure identified by the TCFD, though China remains a disclosure market to watch out for in 2018 as new mandatory reporting policies come into force;
  • New regulations are improving corporate climate disclosures and widening the gap between leaders and laggards;
  • Organisations following the TCFD are encouraged to conduct an analysis of how they will perform under different scenarios, including a 2°C or lower world.

A new report released today by CDP and CDSB shows that there is a gap between the way companies identify climate-related risks and opportunities and how they are preparing to tackle them.

The research into 1,681 companies across 14 countries and 11 sectors disclosing to CDP looks at the four areas of disclosure identified by the Task Force on Climate-related Financial Disclosures (TCFD) – governance, strategy, risk management and metrics and targets – and highlights whether companies in specific sectors and countries are best prepared to disclose information under those themes.

The vast majority of companies acknowledge that climate change poses financial risks for their business with 83% of companies recognising the physical risks, and 88% identifying policy changes/new regulations as the main risks of transitioning to a low-carbon economy.

But when it comes to turning awareness into action, there is still a disconnect in many sectors and countries. For instance, more than 8 in 10 companies oversee climate change at the board level, but only 1 in 10 provides incentives for the management of climate change issues.

Jane Stevensen, Task Force Engagement Director at CDP, said: “Overall, we see there is a surface level of preparedness from companies globally to have board level oversight of climate risk and opportunity. Key drivers are investor action, company reputation and consumer reaction to climate risk. What we are not seeing is increased governance translating into climate change mitigation. 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 organization.”

Simon Messenger, Managing Director, Climate Disclosure Standards Board said: “This analysis shows that the financial implications of climate change are now firmly on companies’ doorsteps and should be integrated in company-wide processes. It is now the time to set up clear strategies to tackle companies’ exposure to climate risks and seize new economic opportunities. It is also clear that the management of environmental issues can no longer be the sole responsibility of sustainability teams: it needs to be a priority area for companies’ boards to ensure it is truly embedded into their strategic priorities. We are more than ever at a crunch point between systemically embedding a market failure or embracing a major opportunity to innovate and grow.”

One of the key recommendations from the FSB TCFD is for organisations to describe the resilience of their strategy to different climate-related scenarios, including a 2°C or lower scenario. Compliance with this recommendation will form part of the next CDP reporting cycle, and this report therefore focuses on the other key recommendations.

Nine months on from the launch of the TCFD recommendations, there has been significant regulatory, investor and corporate activity and interest in developing the landscape for disclosure across many geographies. The challenge now is to move that disclosure on and embed it into corporate strategy and culture from board to the front line and set real emission reduction and renewable energy targets.

Notes to editor

This report includes an analysis of companies’ disclosures in 14 countries. Below are some highlights from a few selected countries. For the full analysis, read the report here.


  • Lowest percentage of companies disclosing GHG emissions across Scope 1, 2, and 3
  • Lowest proportion (24%) identifying reputation and/or changing consumer behavior as a risk driver
  • Expected progress in adoption of carbon pricing (28% anticipate using it by 2019)


  • Second highest proportion of companies providing incentives to the board for the management of climate change issues (25%)
  • Highest proportion of companies providing low carbon products or services that enable avoided emissions (78%)
  • 67% of companies identify reputation and/or changing consumer behavior as a risk
  • 74% of companies report a decrease in emissions arising from emissions reduction activities


  • Highest proportion of companies providing incentives to the board for the management of climate change issues (29%)
  • Only 88% of companies disclose Scope 1 emissions
  • Only 35% of companies will be using carbon pricing by 2019

North America (US + Canada)

  • US has lowest proportion using (15%) and preparing to use (9%) carbon pricing
  • US has lowest proportion with board oversight (66%)
  • Canada has the lowest proportion providing incentives to the board for the management of climate change issues (2%)
  • Canada has the second lowest proportion providing low carbon products or services that enable avoided emissions (54%)


  • Highest proportion of companies with board oversight of climate change (96%)
  • Highest proportions of companies disclosing Scope 1 and 2 emissions (>97%)
  • Only 17% of financials companies disclose Scope 3 emissions from investments
  • Only 35% of companies will be using carbon pricing by 2019

For more information, or exclusive interviews with CDP, please contact:

Rojin Kiadeh, Senior Communications Executive, CDP email:

+44 (0) 203 818 3973

Tess Harris, Investor Communications Manager, CDP email:

+44 (0) 203 818 3973

For interviews with CDSB, please contact:

Denise Puca, Communications Manager, CDSB

Tel: +44(0)7825409060