Many of the world's largest companies are ignoring the risks to their business posed by global warming, instead preferring to regard climate change as a major business opportunity.

That is the finding of a major report released yesterday by auditing giant KPMG and UN-backed sustainable reporting group the Global Reporting Initiative (GRI), which looked at 50 large global companies' annual sustainability reports and found that their focus on climate change was almost universally optimistic.

Entitled Reporting the Business Implications of Climate Change in Sustainability Reports, the survey found that nine out of ten companies included climate change issues in their reports, but only 20 percent reported on any risk to their business posed by global warming.

Where they did assess risks associated with the changing climate companies focused on increased energy prices, while other climate change risks - such as tighter environmental regulation, higher insurance costs, potential class action law suits, and the increased risk of weather damage, and political and economic instability - were almost completely ignored.

Professor George Molenkamp, chair of KPMG's Global Sustainability Services, said companies were guilty of sticking their head in the sand. "The findings are very surprising," he admitted. "When you think of climate change you think of business risks. If you take just one sector, like food production, their whole business is seriously threatened by climate change and yet it is often not evident in their corporate reports. This pattern is repeated across many different sectors - they are either choosing not to mention it or are just not aware of the risks."

Molenkamp predicted that firms would come under growing pressure to face up to these risks. "Over time more and more of these risks will be disclosed," he said. "Investors have a lot of interest in these issues and companies need to be clear with them about the scale of the risks they now face."

However, while firms may be guilty of ignoring the risks posed by climate change the report also revealed that growing numbers of businesses are committed to reducing their carbon emissions and seeking out climate change-related business opportunities.

The survey found that the majority of firms reported a greenhouse gas emission reduction target and nearly half included a statement from their CEO or chairman highlighting how seriously they take climate change. Moreover, two thirds of those surveyed reported on commercial opportunities related to climate change that they had identified, while nearly half disclosed their involvement in emissions trading schemes.

This optimism may of contribute to many firms' refusal to face up to the risks associated with climate change, but Molenkamp insisted the upbeat reports were on balance an encouraging development. "Business leaders, by definition, have to have a positive outlook on the world," he said, "and the fact that so many see climate change as an opportunity is encouraging, as without major business support the problems posed by climate change will not be solved."