Carbon Beta: A Market-Based Measure of Climate Transition Risk Exposure

by CFA Institute

This study introduces carbon beta, which measures a stock’s sensitivity to climate transition risk using a pollutive-minus-clean factor. It measures climate exposure, aligns with forward looking risk indicators, and shows that high-carbon-beta firms underperform when climate shocks occur.

Featured In This Insight

Carbon Beta: A Market-Based Measure of Climate Transition Risk Exposure

Joop Huij, Dries Laurs, Philip Stork & Remco C. J. Zwinkels present Carbon Beta, a measure of climate transition risk determined by a stock’s return sensitivity to a pollutive-minus-clean portfolio.

Published on 2026-08-24 by CFA Institute

carbon carbon credit transition climate change climate risks

Read More