We first examined whether the information gleaned from carbon emissions data suffices for identifying climate leaders and laggards, but found that it is inadequate for this purpose. We then addressed this by showing how our climate beta measure, which indicates how sensitive individual stocks are to the climate risk factor, actually captures different information on climate risk compared to carbon footprint data. We, therefore, determined that climate beta is better suited to distinguish between climate leaders and laggards. We then concluded by showing that integrating climate beta can also effectively neutralize climate risk in investment portfolios.