  Although there is a growing consensus that a low-carbon transition will be
necessary to mitigate the accelerated climate change, the magnitude of
transition-risk for investors is difficult to measure exactly. Investors are
therefore constrained by the unavailability of suitable measures to quantify
the magnitude of the risk and are forced to use the likes of absolute emissions
data or ESG scores in order to manage their portfolios. In this article, we
define the Single Event Transition Risk (SETR) and illustrate how it can be
used to approximate the magnitude of the total exposure of the price of a share
to low-carbon transition. We also discuss potential applications of the single
event framework and the SETR as a risk measure and discuss future direction on
how this can be extended to a system with multiple transition events.
