ESG & Sustainability: A Plain-English Glossary

Sustainability is full of jargon. Whether you're a business leader, procurement manager, or simply sustainability-curious, understanding the language matters. At C² (Csquare), we help companies navigate this landscape every day — so here's your quick reference guide to the terms that matter most.

1. Carbon & Climate Fundamentals

Carbon Credits

A tradeable certificate representing one metric ton of CO₂ removed or prevented from entering the atmosphere. Credits are generated through verified emission reduction projects and must meet strict criteria — additionality, permanence, and no double counting. Businesses use them to offset unavoidable emissions. India's CCTS (launched 2023) expanded in 2025 to include steel, cement, textiles, and more. C² helps clients source and retire high-quality credits.

Carbon Footprint

The total greenhouse gases produced directly and indirectly by an organization, product, or individual — expressed in CO₂ equivalents (CO₂e). Measured across Scope 1, 2, and 3 emissions. Scope 3 alone typically represents 70–90% of a company's total footprint. Understanding your footprint is the essential first step before setting reduction targets or purchasing offsets. C² conducts comprehensive GHG assessments.

Scope 1 Emissions (Direct Emissions)

Greenhouse gases from sources owned or controlled by the organization — fuel combustion in boilers and vehicles, manufacturing process emissions, HFC leakage from cooling systems, and diesel backup generators. For Indian manufacturers, this includes cement kilns, steel furnaces, and captive power plants. Scope 1 is directly controllable and typically the first area targeted in a decarbonization roadmap.

Scope 2 Emissions (Energy Indirect Emissions)

Indirect emissions from purchased electricity, steam, heating, or cooling. Calculated either location-based (grid average emission factor) or market-based (using contractual instruments like RECs). For many service-sector companies, Scope 2 is the largest controllable emission category. Key reduction strategies: rooftop solar, PPAs, green tariffs, and I-RECs. C² supports renewable energy procurement strategy aligned with ESG targets.

Scope 3 Emissions (Value Chain Emissions)

All other indirect emissions across 15 categories defined by the GHG Protocol — covering upstream activities like purchased goods, business travel, and employee commuting, plus downstream activities like product use and end-of-life disposal. Typically 70–90% of a company's total footprint. Scope 3 requires supplier data collaboration and is the most challenging — and most impactful — area to address.

CO₂ Equivalent (CO₂e)

A standardized unit that converts all greenhouse gases into their CO₂ warming equivalent over 100 years (Global Warming Potential). Methane is 28–36x more potent than CO₂; nitrous oxide is 265–298x more potent; some refrigerants (HFCs) are thousands of times more potent. This conversion allows apples-to-apples comparison across all GHGs in a single carbon footprint figure.

Net-Zero

Achieving a balance between emissions produced and emissions removed from the atmosphere — but not through offsets alone. Net-zero requires 90–95% actual emission reductions from a baseline year, with only residual emissions neutralized through high-quality carbon dioxide removal (CDR). Near-term targets typically target 2030; long-term targets aim for 2050. Net-zero is the gold standard — not the same as carbon neutral.

Carbon Neutral

Balancing emissions with carbon offsets or eliminating them entirely. Unlike net-zero, carbon neutral can be achieved with significant offsetting and without proportional emission reductions — making it less stringent. It is often applied to specific products, events, or operations rather than an entire organization. Subject to greenwashing concerns if not backed by a genuine reduction plan.

Climate Positive / Carbon Negative

Going beyond net-zero by removing more carbon from the atmosphere than the organization emits — creating a net environmental benefit. Achieved through extensive afforestation, nature restoration, and direct air capture (DAC) investments. Microsoft's commitment to be carbon negative by 2030, removing all historical emissions since 1975, is a leading example of this highest level of climate ambition.

Decarbonization

The systematic process of reducing carbon emissions from operations, energy use, supply chains, and products through fundamental changes in technology and business models. This includes energy efficiency, renewable energy transition, electrification, low-carbon materials, and green hydrogen. Decarbonization eliminates emissions at the source — it is always preferred over offsetting, which is a supplementary tool, not a substitute.

Greenhouse Gases (GHGs)

Gases that trap heat in Earth's atmosphere, causing the greenhouse effect. The Kyoto Protocol regulates seven main GHGs: CO₂ (fossil fuels), CH₄ (methane from agriculture and waste), N₂O (from industrial processes), HFCs (refrigerants), PFCs (industrial uses), SF₆ (electrical equipment), and NF₃ (semiconductor manufacturing). Each has a different warming potential, measured in CO₂ equivalents over 100 years.

Carbon Sequestration

The capture and long-term storage of atmospheric CO₂. Natural sequestration occurs through forests, wetlands, oceans, and soil. Technological sequestration includes Carbon Capture and Storage (CCS) and Direct Air Capture (DAC). Permanence varies — geological storage lasts thousands of years while forests can burn. Nature-based sequestration also delivers co-benefits like biodiversity, water quality, and community livelihoods.

Carbon Sink

A natural or artificial reservoir that absorbs more carbon than it releases. Major sinks include forests (photosynthesis), oceans (absorbing ~25% of human emissions), soil, wetlands, and mangroves. Carbon sinks are at risk — deforestation and drought can convert them into carbon sources. Protecting and restoring sinks is central to C²'s nature-based solutions advisory.

Baseline Year / Base Year

The reference year against which future emission reductions are measured. It should represent normal operations — anomalous years like 2020 (COVID) are typically avoided. Many organizations use 2019 as their baseline. The baseline must be recalculated if significant structural changes occur (mergers, acquisitions, divestitures). A well-chosen baseline is critical for credible science-based target setting.

Carbon Intensity

Emissions produced per unit of output — expressed as tCO₂e per million rupees of revenue, per MWh generated, or per ton of product. Intensity metrics enable benchmarking across companies of different sizes and track efficiency improvements over time. Important caveat: carbon intensity can decrease even as absolute emissions rise if business growth outpaces emission reductions.

2. ESG Frameworks & Standards

ESG (Environmental, Social, and Governance)

A framework evaluating an organization's performance on environmental impact, social responsibility, and governance quality — alongside traditional financial metrics. Environmental covers climate, waste, water, and biodiversity. Social covers labor, diversity, and human rights. Governance covers board composition, ethics, and transparency. Strong ESG performance links to lower cost of capital, better talent retention, and reduced regulatory risk.

BRSR (Business Responsibility and Sustainability Reporting)

India's mandatory ESG reporting framework introduced by SEBI for the top 1,000 listed companies. Annual disclosures cover 9 principles across ESG themes. BRSR Core — a subset of key performance indicators — requires mandatory third-party assurance from FY 2023–24. C² provides end-to-end BRSR support: data collection, gap analysis, report drafting, and assurance preparation.

CSRD (Corporate Sustainability Reporting Directive)

The EU's expanded sustainability reporting framework affecting ~50,000 companies — including Indian entities with EU subsidiaries or €150M+ consolidated EU revenues. Uses European Sustainability Reporting Standards (ESRS), requires double materiality assessments, and mandates third-party assurance. First reports for the largest companies were due in 2025 (FY 2024 data). A critical compliance frontier for export-oriented Indian companies.

GRI (Global Reporting Initiative) Standards

The world's most widely adopted sustainability reporting framework. Structured as modular Universal Standards plus Topic Standards and Sector Standards. Reporting principles include accuracy, balance, comparability, completeness, and verifiability. GRI is voluntary but globally recognized, compatible with BRSR, TCFD, and CSRD. C² uses GRI as the foundation for most ESG report engagements.

TCFD (Task Force on Climate-related Financial Disclosures)

A framework structured around four pillars — Governance, Strategy, Risk Management, and Metrics & Targets — for disclosing climate-related financial risks and opportunities. Includes scenario analysis under different climate futures. Not yet mandatory in India but strongly recommended by SEBI. TCFD now forms the basis for ISSB's IFRS S2 standard. Many large Indian companies adopt TCFD voluntarily for investor credibility.

SASB (Sustainability Accounting Standards Board)

Industry-specific standards across 77 sectors covering financially material ESG information for investors. Now part of the IFRS Foundation and integrated into the ISSB framework. SASB is particularly useful for identifying which ESG metrics are most financially significant within your specific industry, making it a practical complement to broader GRI reporting.

ISSB (International Sustainability Standards Board)

The global sustainability disclosure standard setter under the IFRS Foundation. IFRS S1 covers general sustainability-related financial disclosures; IFRS S2 covers climate-related disclosures (building on TCFD). Effective from January 2024, though adoption varies by jurisdiction. ISSB consolidates TCFD, SASB, and CDSB into one coherent baseline, increasingly becoming the investor-facing global standard.

TNFD (Taskforce on Nature-related Financial Disclosures)

Nature's equivalent of TCFD — a risk management and disclosure framework for companies to identify, assess, and report on nature-related dependencies, impacts, risks, and opportunities. Uses the LEAP approach: Locate, Evaluate, Assess, Prepare. Version 1.0 was released in September 2023. As biodiversity risks grow, TNFD adoption is accelerating — particularly relevant for agriculture, pharma, and manufacturing sectors.

EcoVadis

A leading global supply chain sustainability ratings platform assessing companies across Environment, Labor & Human Rights, Ethics, and Sustainable Procurement. Ratings run 0–100, with Bronze, Silver, Gold, and Platinum medals. From 2025, medals are based on percentile performance within the industry. Over 80,000 companies are rated globally. C² helps Indian companies prepare assessments and improve their EcoVadis scores to win international supply chain access.

CDP (Carbon Disclosure Project)

A global non-profit running environmental disclosure systems for companies, cities, and regions across Climate Change, Water Security, and Forests. Scoring runs from D- (Disclosure) to A (Leadership). Over 18,000 companies disclose, with data used by 680+ investors managing $130 trillion in assets. CDP A-list companies gain competitive advantage, attract ESG-focused capital, and demonstrate genuine climate leadership.

3. Carbon Markets & Credit Types

Voluntary Carbon Market (VCM)

A decentralized market where companies and individuals voluntarily purchase carbon credits to offset their emissions — without legal obligation. Project types include afforestation, renewable energy, methane capture, and cookstoves. Major standards include Verra (VCS) and Gold Standard. Valued at ~$2 billion in 2023, the VCM is projected to grow 15x by 2030. C² assists clients in navigating credit procurement.

Compliance Carbon Market

A regulated market where entities with legal emission caps buy and sell allowances or credits to meet mandatory targets. Penalties apply for non-compliance. Examples include the EU Emissions Trading System (EU ETS), UK ETS, and India's CCTS. Compliance markets generally see higher prices than voluntary markets because participation is mandated and enforcement is binding.

Indian Carbon Market (ICM) / CCTS

India's first national carbon market, established under the Energy Conservation (Amendment) Act 2022 and administered by the Bureau of Energy Efficiency (BEE). Covers both compliance and voluntary market segments. Initially focused on thermal power and heavy industry, the CCTS Amendment 2025 expanded coverage to 200+ additional industrial units. C² tracks ICM developments closely to identify opportunities for clients.

Avoidance Credits

Carbon credits generated by projects that prevent greenhouse gas emissions that would otherwise have occurred — such as renewable energy displacing coal power, methane capture from landfills, or REDD+ forest conservation. Controversy exists around additionality: if the project would have happened anyway, the climate benefit is questionable. Recent market reforms emphasize higher-integrity avoidance projects with strong additionality proof.

Removal Credits / Carbon Dioxide Removal (CDR)

Credits from projects that actively remove CO₂ from the atmosphere and store it long-term. Methods include afforestation and reforestation, biochar (pyrolysis), Direct Air Capture (DAC), enhanced weathering, and BECCS. Removal credits are considered higher integrity than avoidance credits for net-zero strategies because they reverse existing atmospheric CO₂ rather than just preventing future additions.

Additionality

The principle that a carbon project must not have happened without the incentive of carbon finance. A project that would have occurred anyway under business-as-usual provides no real climate benefit. Additionality is assessed on financial grounds (was the project viable without carbon revenue?), regulatory grounds, and common practice grounds. It is the most scrutinized and contested aspect of carbon credit quality.

Permanence

How long the sequestered carbon remains stored. Geological CCS storage can last thousands of years. Forests face reversal risks from fire, disease, or logging — mitigated by buffer pools of reserve credits. Soil carbon can be lost through land use change. Projects must have robust monitoring and risk mitigation strategies. Permanence is a key criterion C² uses when evaluating credit quality for clients.

Leakage

When a carbon project reduces emissions in one location but inadvertently causes emissions to increase elsewhere. For example, protecting a forest in one area may simply shift deforestation to another region. Leakage must be quantified and deducted from gross emission reductions to calculate net credits. It is a significant quality concern, particularly in forest conservation and REDD+ projects.

Double Counting

When the same emission reduction or carbon credit is claimed by more than one entity — between buyer and seller, across voluntary and compliance markets, or between countries' NDC accounting. Double counting is prevented through robust registries and retirement systems. Article 6 of the Paris Agreement introduced corresponding adjustment rules to address double counting between countries.

Registry

Digital platforms that track the full lifecycle of carbon credits — issuance, ownership, transfer, and retirement — to prevent double counting and ensure transparency. Major global registries include Verra Registry, Gold Standard Registry, and the American Carbon Registry. Each credit has a unique serial number. Retirement permanently removes a credit from circulation, confirming it has been used to offset emissions.

Vintage

The year in which the emission reductions or removals associated with a carbon credit actually occurred. Recent vintages are generally preferred by buyers and command premium prices. Older vintages may face scrutiny over whether the emissions reductions remain additional and relevant today. Some buyers specify vintage requirements in procurement to ensure credits align with specific reporting periods.

4. Science-Based Targets & Climate Goals

Science-Based Targets Initiative (SBTi)

A partnership between CDP, UN Global Compact, WRI, and WWF that validates corporate emission reduction targets aligned with limiting global warming to 1.5°C. Near-term targets typically run to 2030; long-term targets require net-zero by 2050. Covers Scope 1, 2, and relevant Scope 3 emissions. Over 7,000 companies globally and 200+ Indian companies have committed. C² guides clients through the full SBTi process.

1.5°C Pathway

The trajectory of global emission reductions needed to limit warming to 1.5°C above pre-industrial levels — as targeted by the Paris Agreement. Requires approximately 45% global emission reduction by 2030 (from 2010 levels) and net-zero by 2050. Based on IPCC science. More ambitious than the 2°C scenario and necessary to avoid the worst climate impacts including extreme weather, sea level rise, and ecosystem collapse.

Paris Agreement

The 2015 international climate treaty signed by 196 parties, committing to limit global temperature rise to well below 2°C and pursuing 1.5°C. Countries submit Nationally Determined Contributions (NDCs) reviewed every five years. Article 6 enables international carbon market cooperation. India's NDC commits to 50% non-fossil electricity by 2030 and net-zero by 2070.

Nationally Determined Contributions (NDCs)

Country-level climate action plans submitted to the UN outlining emission reduction commitments and adaptation strategies. Updated every five years with increasing ambition. Not legally binding but subject to international transparency. India's NDC targets a 45% reduction in emissions intensity of GDP by 2030 (from 2005 levels) and creation of a 2.5–3 billion tonne CO₂e carbon sink through forests.

5. ESG Reporting & Materiality

Materiality Assessment

The process of identifying and prioritizing ESG topics most significant to a company's business and its stakeholders. Topics are mapped on two axes: impact on the business and impact on stakeholders and society. Informs ESG strategy, target-setting, and public disclosure. Should be updated every 2–3 years or when major changes occur. C² conducts structured materiality assessments aligned with GRI, BRSR, and CSRD requirements.

Double Materiality

An approach that considers both financial materiality (how ESG issues affect the company's finances) and impact materiality (how the company's operations affect people and the environment). Required under CSRD and increasingly expected globally. Represents a shift from shareholder primacy toward stakeholder capitalism. For example, climate change may damage your assets (financial) while your emissions contribute to climate change (impact).

Greenwashing

Making misleading, vague, or unsubstantiated environmental claims to appear more sustainable than actuality. Common tactics include broad labels like 'eco-friendly,' selective disclosure, and misleading imagery. Regulatory scrutiny is intensifying globally through the EU Green Claims Directive, SEC guidance, and FTC rules. Risks include fines, litigation, and reputational damage. Prevention requires specific, verifiable, third-party-assured sustainability claims.

Assurance / Verification

Independent third-party review of ESG data and disclosures. Limited assurance involves a basic review with lower confidence level; reasonable assurance involves extensive examination similar to a financial audit. Mandatory for BRSR Core KPIs in India. Increasingly expected by investors and regulators globally. Third-party assurance credibly reduces greenwashing risk and builds stakeholder trust in reported sustainability data.

Stakeholder Engagement

The structured process of involving individuals or groups affected by or capable of influencing an organization's ESG performance — employees, investors, customers, suppliers, communities, regulators, and NGOs. Methods include surveys, interviews, focus groups, and advisory panels. Stakeholder engagement informs the materiality assessment and is required by GRI, BRSR, and CSRD. It is an ongoing process, not a one-time exercise.

6. Environmental Methodologies & Concepts

Life Cycle Assessment (LCA)

A methodology for evaluating the full environmental impact of a product or service from raw material extraction through production, use, and end-of-life disposal (cradle-to-grave). Standardized by ISO 14040/14044. Identifies environmental hotspots for improvement and underpins Environmental Product Declarations (EPDs). Increasingly required by green procurement policies and building certification schemes like LEED and BREEAM. C² supports product-level LCAs.

EPD (Environmental Product Declaration)

A standardized, independently verified document communicating the environmental performance of a product based on LCA results. A Type III environmental label (ISO 14025), it quantifies impacts including carbon, water, energy, and waste. Valid for 5 years. EPDs enable transparent comparison between competing products and are increasingly required for green building projects and sustainable supply chain procurement.

Circular Economy

An economic model designed to eliminate waste by keeping materials and products in use for as long as possible through reuse, repair, refurbishment, remanufacturing, and recycling. Contrasts with the linear take-make-waste economy. Includes product-as-a-service models and industrial symbiosis (one industry's waste becomes another's input). Reduces virgin material demand, lowers emissions, and creates new business opportunities.

Water Footprint

The total volume of freshwater consumed or polluted to produce goods and services. Comprises blue water (surface and groundwater), green water (rainwater used in agriculture), and grey water (water needed to dilute pollutants). Critical in water-stressed regions like much of India. Increasingly disclosed alongside carbon footprint, particularly for food, beverage, textile, and pharmaceutical companies.

Biodiversity

The variety of life on Earth — encompassing diversity within species, between species, and across ecosystems. Provides essential ecosystem services including pollination, water purification, and climate regulation. Rapid biodiversity loss is driven by habitat destruction, climate change, and pollution. Nature-related risks are increasingly material to businesses (TNFD framework), particularly in agriculture, fisheries, pharmaceuticals, and tourism.

Ecosystem Services

The wide range of benefits humans derive from nature — provisioning services (food, clean water, timber), regulating services (climate stabilization, flood control, carbon storage), supporting services (soil formation, nutrient cycling), and cultural services (recreation, spiritual value). Often undervalued until lost. Natural capital accounting attempts to quantify these services monetarily, informing business risk assessments and investment decisions.

7. Nature-Based Solutions

Nature-Based Solutions (NbS)

Actions to protect, sustainably manage, or restore natural ecosystems to address societal challenges — including climate change, biodiversity loss, water security, and disaster risk. Examples include afforestation, wetland restoration, and mangrove conservation. NbS are cost-effective compared to technological alternatives, provide multiple co-benefits, and are critical for meeting Paris Agreement goals. C² advises on NbS project development and carbon credit generation.

Afforestation

The establishment of forest on land that has not been forested for at least 50 years — or has never been forested. Creates new carbon sinks, prevents soil erosion, enhances biodiversity, and generates carbon removal credits. Differs from reforestation, which restores recently deforested land. Afforestation projects must demonstrate additionality and permanence to generate verified credits.

Reforestation

The re-establishment of forest on land that was recently forested but converted to other uses or degraded. Reforestation tends to achieve faster carbon sequestration than afforestation because soil carbon and seed banks often remain. It also supports biodiversity recovery and watershed protection. As part of natural climate solutions, reforestation is a core component of many corporate nature commitments.

Miyawaki Method

An afforestation technique developed by Japanese botanist Akira Miyawaki that plants native species at high density (3–5 plants per square metre) in a multilayer structure mimicking natural forest succession. The resulting forest grows 10x faster and sequesters 30x more carbon than conventional plantations, becomes self-sustaining within 2–3 years, and boosts biodiversity. Increasingly adopted across India for urban and industrial land restoration.

REDD+ (Reducing Emissions from Deforestation and Forest Degradation)

A UN framework providing financial incentives to developing countries to reduce emissions from deforestation and forest degradation, sustainably manage forests, and enhance forest carbon stocks. REDD+ generates avoidance credits and has been controversial due to questions about additionality and leakage — where protecting one forest displaces deforestation elsewhere. Critical for protecting tropical forests in Asia, Africa, and Latin America.

Blue Carbon

Carbon captured and stored by coastal and marine ecosystems — including mangroves, salt marshes, and seagrasses. These ecosystems sequester carbon at higher rates per unit area than terrestrial forests and store it in biomass and sediments for centuries to millennia. When destroyed, they release large amounts of CO₂. Blue carbon represents a significant opportunity for coastal nations like India, which holds the world's 3rd largest mangrove area.

Mangroves

Salt-tolerant trees and shrubs found in coastal intertidal zones across tropical and subtropical regions. Among the most carbon-rich and productive ecosystems on Earth — storing 3–5x more carbon per area than tropical forests. They also protect coastlines from storms, support fisheries, and sustain local livelihoods. India has ~4,900 km² of mangroves. Restoring and protecting mangroves generates high-quality blue carbon credits with significant co-benefits.

8. Renewable Energy & Certificates

Renewable Energy Certificate (REC)

A market-based instrument representing the environmental attributes of one megawatt-hour (MWh) of electricity generated from renewable sources. RECs separate the environmental benefit from the physical electricity, allowing companies to claim renewable energy use without direct connection to a renewable generator. Used to meet Scope 2 targets, RPO obligations, and green procurement commitments. One REC ≠ one carbon credit.

I-REC (International REC)

The globally standardized renewable electricity tracking and trading instrument used across 60+ countries outside North America — including India. One I-REC represents one MWh of renewable electricity. Widely used by multinationals seeking a consistent global renewable procurement standard. Ensures additionality and prevents double counting. Increasingly used by Indian companies to demonstrate renewable energy use to international customers and ESG raters.

Power Purchase Agreement (PPA)

A long-term contract (typically 10–25 years) between a renewable energy generator and a corporate buyer for the purchase of electricity at an agreed price. Physical PPAs deliver electricity directly; virtual PPAs (VPPAs) are financial contracts where electricity is sold to the grid. PPAs provide price certainty, enable Scope 2 reductions, and signal climate leadership — particularly attractive for energy-intensive Indian manufacturers.

Renewable Portfolio Standard (RPS) / Renewable Purchase Obligation (RPO)

Regulatory mandates requiring entities to source a minimum percentage of electricity from renewable sources. In India, DISCOMs, open-access consumers, and captive users have separate solar and non-solar RPO targets. Compliance is achieved through physical renewable energy purchase or REC procurement. Non-compliance attracts penalties. RPO requirements are escalating year-on-year, creating urgency around renewable procurement planning.

Green Tariff

An electricity pricing mechanism offered by utilities (DISCOMs) allowing customers to purchase electricity generated from renewable sources — often at a small premium. Simpler than negotiating a bilateral PPA, making it accessible for smaller consumers. May include bundled RECs or I-RECs. India's green tariff programs are growing, offering an increasingly practical pathway for companies to address Scope 2 emissions without complex procurement structures.

9. Emerging Topics & Future Trends

Biodiversity Credits

Tradeable instruments representing measurable, verified positive biodiversity outcomes from conservation or restoration projects. Still an emerging market — where carbon credits were 20 years ago — with standards under development by IUCN and UNEP. As TNFD adoption grows, biodiversity credits are expected to become a mainstream corporate tool for nature-positive commitments. High potential but currently high uncertainty on pricing and demand.

Plastic Credits

Certificates representing the collection, recycling, or proper disposal of a specific quantity of plastic waste — typically 1 kg or 1 tonne. Helps companies address their plastic footprint and Extended Producer Responsibility (EPR) obligations. Standards include the Verra Plastic Waste Reduction Standard. Growing demand from FMCG, packaging, and retail companies. Faces similar additionality controversies as early-stage carbon markets.

Internal Carbon Pricing

Assigning a monetary value to carbon emissions within an organization to guide internal investment decisions. Three main approaches: shadow price (theoretical price for evaluation), internal fee/tax (actual charge on business units), and implicit price (derived from abatement costs). Used by 2,000+ companies globally including Microsoft, Shell, and Unilever. Typical prices range from $25–100 per tCO₂e. Prepares companies for external carbon pricing mechanisms.

Carbon Border Adjustment Mechanism (CBAM)

The EU's mechanism to impose a carbon cost on imports of carbon-intensive goods — steel, cement, aluminum, fertilizers, and electricity — from countries with less stringent climate policies. Prevents carbon leakage. Transitional reporting phase ran 2023–2025; full financial implementation begins 2026 with costs tied to EU ETS prices. A critical compliance and cost risk for Indian manufacturers exporting to Europe. C² tracks CBAM developments for export-oriented clients.

Direct Air Capture (DAC)

Technology that removes CO₂ directly from ambient air using chemical processes, then permanently stores or utilizes it. Currently expensive ($600–1,000+ per tonne) and energy-intensive, but costs are expected to decline with scale. Considered essential for neutralizing hard-to-abate residual emissions in net-zero strategies. Companies like Microsoft and Stripe are already investing. A critical long-term solution for achieving deep decarbonization.

Hydrogen (Green, Blue, Grey)

Hydrogen is classified by production method. Green hydrogen uses renewable electricity for electrolysis — zero emissions. Blue hydrogen uses natural gas with CCS — lower emissions. Grey hydrogen uses natural gas without CCS — high emissions. Pink hydrogen uses nuclear power. Green hydrogen is essential for decarbonizing hard-to-abate sectors (steel, chemicals, heavy transport). India's National Hydrogen Mission targets 5 million metric tonnes of green hydrogen production by 2030.

Carbon Capture and Storage (CCS)

Technology capturing CO₂ from large point sources — power plants and industrial facilities — and permanently storing it underground in geological formations (depleted oil/gas fields, saline aquifers). Can capture 90%+ of source emissions. Essential for decarbonizing cement, steel, and chemical sectors where process emissions cannot be eliminated through electrification alone. High costs and energy penalties remain key challenges.

Carbon Capture, Utilization, and Storage (CCUS)

An extension of CCS that uses captured CO₂ as a feedstock for products — including building materials, concrete curing, synthetic fuels, and chemicals — rather than only storing it. Revenue from CO₂ utilization can improve project economics. Storage duration varies: some utilization pathways are temporary while geological storage is permanent. CCUS is gaining government support globally through investment incentives and policy mandates.

Just Transition

An approach to climate action ensuring the shift to a low-carbon economy is fair and inclusive — supporting workers, communities, and regions economically dependent on fossil fuels. Includes retraining programs, economic diversification, and social protection. Referenced in the Paris Agreement preamble and increasingly embedded in ESG frameworks and corporate transition plans. Particularly relevant in India given coal-dependent regions and millions of informal energy sector workers.

Climate Adaptation

Actions taken to adjust to current or anticipated climate change impacts — reducing vulnerability and building resilience. Examples include flood defenses, drought-resistant crops, early warning systems, and heat-resilient urban planning. Distinct from mitigation (reducing emissions): adaptation addresses impacts that are already locked in. TCFD and CSRD both require disclosure of adaptation strategies. Both adaptation and mitigation are essential for a comprehensive climate strategy.

Climate Risk

The potential for adverse effects from climate change on assets, operations, revenues, or reputation. Physical risks include acute events (cyclones, floods) and chronic changes (sea level rise, temperature shifts). Transition risks include policy changes, technology shifts, and reputational pressures as markets shift to low-carbon. Climate risk is increasingly scrutinized by investors, lenders, and insurers — and disclosed through the TCFD and ISSB frameworks. 👉 𝐂𝐨𝐧𝐧𝐞𝐜𝐭 𝐰𝐢𝐭𝐡 C² (Csquare) 𝐭𝐨 𝐠𝐞𝐭 𝐬𝐭𝐚𝐫𝐭𝐞𝐝!

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