As climate change continues to reshape global economic and regulatory landscapes, the limitations of traditional credit risk models in accounting for environmental exposure have become increasingly apparent. This paper explores a structured methodology for integrating climate-related transition risks into credit risk assessment frameworks, using Pierre Monnin’s sector-based model as a foundational reference. The proposed approach involves three key stages: classification of corporate bond portfolios by sector, assignment of transition risk scores based on carbon intensity and policy exposure, and credit rating adjustments reflecting sectoral vulnerability. The analysis is supported by contemporary research from authors such as Ackerer and Filipović, Karydas and Xepapadeas, and Jung and Engle, who collectively emphasize the importance of incorporating forward-looking and environmental variables into financial modeling. Through simulated data, the study illustrates how integrating transition risk significantly alters credit profiles, particularly in high-emission sectors like energy and utilities. For example, credit loss projections increased by over 60 percent for the energy sector once climate risk was factored in. These results highlight the urgent need for financial institutions and regulators to move beyond conceptual awareness and toward implementation of climate-adjusted credit evaluation tools. This paper contributes to existing literature by operationalizing climate risk integration in a practical, replicable format, offering both analytical clarity and a path forward for climate-resilient credit systems.