Aren't transition risk and carbon intensity the same?
Answer
No, they are not the same, but carbon intensity can be an indicator for transition risks. Indeed, carbon intensity is the ratio of a company’s carbon emissions to a measure of production (e.g., revenues) or investment (e.g., net asset value). A high carbon intensity indicates a higher reliance of a company on carbon emissions in its operations and, hence, a higher sensitivity to carbon taxes and potential exposure to transition risks.