In the process of climate change mitigation and adaptation, the focus on climate risk driven by transition innovations has received widespread attention from governments, regulators, and investors. Based on the identification of low-carbon patents through the Green and Low-carbon Technology Inventory in China, this study constructs low-carbon innovation measurements of listed firms in China from 2015 to 2021. Then, an empirical model is used to investigate the impact and mechanism of climate transition innovations on the default risk. The baseline regression model shows that low-carbon innovations can mitigate the default risk of listed firms. Moreover, our findings are supported by instrumental variable regressions that use the time costs of innovation. Finally, the mediation effect demonstrates that investor attention, total factor productivity, and technology spillovers are paths through which transition innovations can affect the default risk. This study reveals that low-carbon technological advances have a positive effect on climate transition risks.