It has been eight months since the launch of global reporting guidelines aimed at helping companies and investors better prepare for climate change and the low carbon transition. The general consensus is that these crucial recommendations are gaining important traction. After all, since the release of the Taskforce on Climate-related Financial Disclosure (TCFD) guidelines, there has been a marked uptick in corporate and investor interest in both the proposed reporting best practices and the wider physical and economic climate impacts they address.

The TCFD guidelines already have won backing from hundreds of major corporates and investors, while the European Commission earlier this month unleashed a sweeping set of proposals aimed at further mainstreaming green finance, including proposals to try to standardize climate disclosure. The U.K., meanwhile, is looking at whether to make climate risk disclosure and the TCFD guidelines a mandatory requirement for businesses.

Yet, much like teenagers drawing up detailed, color-coded GCSE revision timetables ahead of crucial exams, there remains a significant gap between intent and concerted action on climate risk among corporates.

CDP and the Climate Disclosure Standards Board (CDSB) will release new research showing a "clear" disconnect between companies' awareness of climate risks and the actions needed to seriously confront and tackle them.

Looking at almost 1,700 companies across 14 countries and 11 sectors which disclose climate-related information to CDP, the report looks at the four main areas covered by the TCFD — governance, strategy, risk management and metrics and targets — and highlights whether companies are adequately prepared for the recommended level of disclosure.

The vast majority of companies acknowledge that climate change poses financial risks to their business.

Initial effort and intent exists in spades, certainly. The vast majority of companies, it found, acknowledge that climate change poses financial risks to their business, with 83 percent recognizing physical risks and 88 percent identifying risks from policy changes and new regulations associated with the low carbon transition.

However, at the same time taking responsibility for climate action is rarely linked to boards' or management teams' wages, remuneration packages, bonuses or performance assessment. Moreover, while more than eight in 10 companies oversee climate change issues at boardroom level, only one in 10 provides incentives for board members to effectively manage climate-related risks and opportunities, the report showed.

Jane Stevensen, task force engagement director at CDP, said the findings demonstrated that when it comes to turning climate risk awareness into concerted action to actually address those risks, there was still a wide gap across many sectors and countries.

"Overall, we see there is a surface level of preparedness from companies globally to have board-level oversight of climate risk and opportunity," she said, pointing to key drivers such as investor pressure, reputational factors and consumer reaction to climate risks. "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."

The best performers tended to be found at European countries, with the U.K., France and Germany boasting the most effective disclosure. In contrast, companies from China and across the healthcare and financial sectors were found to be lagging behind when it came to enhanced disclosure.

The U.K. had the highest proportion of companies with board oversight of climate change at 96 percent, as well as the highest proportion of firms — around 97 percent — disclosing their Scope 1 and 2 emissions.

Germany has the highest number of companies actually providing incentives to the board for management relating to climate change issues — although the proportion is still a fairly low 29 percent, closely followed by France at 25 percent.

At the other end of the scale, the U.S. has the lowest proportion of companies providing board oversight of climate issues at just 66 percent, while China has the lowest number of firms disclosing their greenhouse gases across Scope 1, 2 and 3 emissions. Canada takes the wooden spoon for the lowest proportion of firms incentivizing their boards to manage climate change issues, at a mere 2 percent.

All in all, it shows how far the global corporate world has to go towards embedding long-term climate resilient thinking across their businesses and value chains. Key to encouraging improvement will be investors, many of which are showing increasing appetite for pressuring their assets to meaningfully address climate risks, and policymakers who are similarly upping the legislative pressure on businesses.

Simon Messenger, managing director of the CDSB, acknowledged there had already been considerable action from some firms and that climate risk was "firmly on companies' doorsteps."

This is not about reinventing the wheel; it is about enhanced disclosure, not more disclosure.

However, he stressed that as companies prepare to release their latest annual financial reports in the coming weeks and months, the TCFD guidelines were about embedding sustainability and climate awareness throughout business strategies, and that with investor pressure increasing it was time for companies to enhance their risk disclosure and "seize new economic opportunities" that should result.

His comments follow a survey by engineering technology giant Schneider Electric earlier this year, which found many large corporates are limiting their climate action to conventional approaches such as renewables and energy efficiency, but are failing step up work to prepare for newer, disruptive yet increasingly crucial clean technologies such as battery storage and microgrids.

"Companies are acting fast on renewable energy, reducing emissions and setting a price on carbon," Messenger told BusinessGreen. "The next level of action requires a business-wide, strategic approach, which will need board-level involvement. There is still some room for improvement in boardrooms about understanding the links between climate change and business resilience. Incentives are key to motivating people, but the report shows that not every firm has these in place just yet."

The hope is that the TCFD guidelines, with their proposals for businesses to properly assess how they would cope with a range of decarbonization scenarios, will prompt many more businesses to change their approach. "As businesses begin disclosing in line with the TCFD, we hope to see more overarching actions under core areas, such as governance and strategy, which may have not necessarily been the main focus so far," Messenger said.

In short, the challenge is not to simply pay lip service to the TCFDs, but — much like a GCSE student sticking doggedly to their revision timetable to boost chances of future success — move from disclosing risks to embedding the response to those risks into corporate culture from top to bottom, setting real emission reduction and energy targets as a result.

"The TCFD is very clear: This is not about reinventing the wheel; it is about enhanced disclosure, not more disclosure," added Messenger. "Investors hold a critical role in shaping this dialogue, and time is running out."

As the end of the financial year nears, it will be interesting to see just how much impact the TCFD guidelines have when corporates begin releasing their annual reports in the coming weeks and months — and how many companies are turning an awareness of climate change into genuine action.