Sixty-five terms an Indian sustainability, finance or export team is expected to already know. Defined plainly, with what each one actually requires of you.
Written for people who have to file, assure or defend a number, not for people writing about carbon. Last reviewed 20 August 2026.
Most carbon terminology is defined by whoever is asking you for the number: SEBI, the EU, your buyer, your lender, your assurer. The definitions below are grouped by who asks. Where a term has a common misuse, the misuse is named, because getting these wrong in a filing is how a disclosure becomes a finding.
The Business Responsibility and Sustainability Report, the ESG disclosure format SEBI requires from India's top 1,000 listed entities by market capitalisation. It runs to nine principles covering environmental, social and governance performance, and is filed as part of the annual report. BRSR replaced the older Business Responsibility Report and moved Indian ESG disclosure from narrative to quantified.
A subset of BRSR: nine key performance indicators singled out for mandatory third-party assurance. Because assurance applies only to the Core attributes, these are the numbers most likely to be traced back to source documents by an assurer. Reasonable assurance on BRSR Core reaches the top 1,000 listed entities in FY 2026-27. Full guide to the nine attributes.
India's Carbon Credit Trading Scheme, administered through the Bureau of Energy Efficiency. It sets greenhouse gas emission intensity targets for obligated entities in notified sectors, with tradable certificates for over-performance and a shortfall obligation for under-performance. It is India's move from a voluntary carbon market to a compliance one. Full guide.
The Bureau of Energy Efficiency, the statutory body under India's Ministry of Power that administers the PAT scheme and now CCTS. For an obligated entity, BEE is the body that receives the annual emissions report and holds the compliance record.
Perform, Achieve and Trade, India's earlier energy-efficiency trading scheme for designated consumers in energy-intensive sectors, based on specific energy consumption targets and tradable energy saving certificates. PAT is the institutional ancestor of CCTS, and many CCTS obligated entities are former PAT designated consumers.
The Securities and Exchange Board of India, the capital markets regulator that mandates BRSR and BRSR Core. For a listed Indian company, SEBI is the authority whose observation on a disclosure becomes public record.
A framework for classifying economic activities as climate-aligned, drafted but not yet notified as of August 2026. On notification, lenders would be expected to classify exposures against it. It is the largest currently unfired regulatory trigger for Indian financial institutions.
The EU Carbon Border Adjustment Mechanism, which puts a carbon price on imports of certain goods so that they face a cost comparable to EU domestic production. The definitive regime began on 1 January 2026. Covered goods include iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. The obligation sits with the EU importer, but the emissions data has to come from you. Full guide for Indian exporters.
The greenhouse gas emissions released during the production of a specific good, expressed per tonne of that good. This is the figure CBAM runs on. Crucially it is a product-level number tied to a production route and an installation, not an entity-level total, which is why a company can have a complete corporate inventory and still be unable to answer a CBAM request.
Fallback emission values the EU applies when an importer cannot supply actual data from the producer. They are deliberately conservative, so they generally cost more than accurate site-specific data would. Supplying real installation-level data is usually the cheaper option for an exporter.
The EU Corporate Sustainability Reporting Directive, which expands mandatory sustainability reporting across companies operating in the EU, including certain non-EU parents meeting turnover thresholds. Reporting follows the ESRS standards. Indian companies encounter it either directly through EU subsidiaries or indirectly as suppliers to in-scope customers. Full guide.
The European Sustainability Reporting Standards, the detailed reporting standards that give CSRD its content, covering environmental, social and governance topics with a double materiality assessment at their core.
The principle that a company must report both how sustainability issues affect its financial position and how its own operations affect people and the environment. It is the point where EU reporting diverges most sharply from the investor-focused, financially-oriented approach of ISSB.
An EU requirement for a digital record carrying carbon footprint, material composition and supply chain data for EV, light means of transport and industrial batteries above 2 kWh, going live 18 February 2027. For an Indian component supplier it converts product carbon footprinting from a commercial nicety into a condition of market access. Full guide.
The EU-registered entity permitted to import CBAM goods and file the annual CBAM declaration. As an exporter you are not the declarant, but the declarant's filing depends on data you provide, and their exposure to default values becomes your commercial problem.
The most widely used greenhouse gas accounting standard in the world, and the methodological base underneath BRSR, CDP, SBTi and most corporate carbon reporting. Its Corporate Standard defines the scopes; its Corporate Value Chain Standard defines the fifteen Scope 3 categories; its Product Standard covers product footprints. Full guide to the Product Standard.
Direct emissions from sources a company owns or controls: fuel burned in its boilers, furnaces and vehicles, plus process and fugitive emissions. For most Indian manufacturers this is the best-measured number they have, because it maps to fuel purchases they already track for cost reasons.
Indirect emissions from purchased electricity, steam, heat and cooling. Reported two ways: location-based, using the average grid emission factor, and market-based, reflecting contractual instruments such as renewable energy certificates. Most frameworks now expect both figures.
All other indirect emissions across the value chain, split into fifteen categories covering purchased goods, transport, business travel, use of sold products, investments and more. For most companies Scope 3 is the large majority of the total footprint, and it is where Indian disclosure is thinnest: 42.1% of BRSR filers disclose any Scope 3 figure and only 1.5% break it into categories, per our 2026 index.
Purchased goods and services: the emissions embedded in everything a company buys. Usually the largest Scope 3 category for manufacturers and retailers, and the one that requires supplier-level data rather than spend-based estimates if it is going to survive assurance.
Use of sold products: the emissions released when customers use what you sold them. For vehicle makers, tyre manufacturers, appliance makers and fuel producers this single category routinely dwarfs everything else the company reports, which is why it attracts the most scrutiny and the most challenge.
Investments: the emissions attributable to a financial institution's lending and investment portfolio. For a bank this is effectively the whole carbon question, and it is calculated using PCAF attribution methods.
The Science Based Targets initiative, which validates corporate emission reduction targets against pathways consistent with limiting warming to 1.5 degrees. A validated SBTi target is currently the most widely recognised signal that a company's climate commitment is more than a press release. Its Corporate Net-Zero Standard V2.0 takes effect 31 January 2027 and brings mandatory data assurance. Full guide.
A global environmental disclosure system through which companies report climate, water and forest data, largely at the request of investors and customers, and receive a graded score from A to D minus. Many multinational buyers use a supplier's CDP score as a procurement filter. Full guide.
The Partnership for Carbon Accounting Financials, whose standard defines how banks and investors attribute the emissions of the companies they finance. It provides asset-class-specific attribution methods and a data quality score from 1 to 5. Full guide for Indian financial institutions.
The International Sustainability Standards Board, which issues IFRS S1 and IFRS S2, the global baseline for investor-focused sustainability and climate disclosure. Where CSRD asks about your impact on the world, ISSB asks about the world's financial impact on you. Full guide.
The Task Force on Climate-related Financial Disclosures, whose four-pillar structure of governance, strategy, risk management, and metrics and targets has been absorbed into IFRS S2. TCFD as a standalone body has been disbanded, but its architecture survives inside ISSB.
The international standard for quantifying and reporting greenhouse gas emissions at organisation level, and for validation and verification. Frequently the standard an assurance provider works to when giving an opinion on a corporate inventory.
The international standard for quantifying the carbon footprint of a product, based on life cycle assessment principles. Where ISO 14064 covers the organisation, ISO 14067 covers the SKU. Full guide.
The Global Reporting Initiative, the longest-established sustainability reporting framework, oriented towards a broad stakeholder audience rather than investors specifically. Many Indian companies report against GRI alongside BRSR.
The underlying physical or financial quantity a calculation starts from: litres of diesel, kilowatt hours of electricity, tonnes of steel purchased, kilometres flown. Emissions equal activity data multiplied by an emission factor, so the credibility of every carbon number rests on the quality of its activity data.
The coefficient converting activity data into greenhouse gas emissions, for example kilograms of CO2 equivalent per kilowatt hour of grid electricity. Factors vary by geography, year, fuel and production route, and using an outdated or wrong-region factor is one of the most common findings in carbon assurance.
Tonnes of carbon dioxide equivalent, the common unit that expresses all greenhouse gases in terms of the warming effect of carbon dioxide, using global warming potential values. Methane and nitrous oxide are converted into this unit before being added to a total.
Global warming potential, the multiplier used to express a greenhouse gas in CO2-equivalent terms over a given time horizon, usually 100 years. Values are periodically revised, and moving from an older IPCC assessment report to a newer one changes reported totals without any change in actual emissions, which is why the GWP version used should always be stated.
Data measured directly at the source, such as a meter reading, a weighbridge slip or a supplier's own calculated footprint for the specific item sold to you. Primary data is what makes a number defensible and what CBAM, product footprints and OEM programmes increasingly require.
Data drawn from databases, industry averages or spend-based proxies rather than direct measurement. Acceptable in many contexts and often unavoidable early on, but it is the first thing an assurer challenges and it cannot support a product-level claim.
Estimating emissions by multiplying money spent by an emission factor per unit of currency. Fast and complete, but insensitive to actual supplier performance: switching to a genuinely cleaner supplier at the same price changes nothing in the result. It is a starting point, not an answer.
A graded indicator of how reliable the inputs behind a figure are, most formally defined in PCAF's 1 to 5 scale where 1 is verified primary data. Disclosing the score alongside the number is increasingly expected, because a portfolio figure built entirely on score-5 data says very little.
The reference year against which reduction targets and progress are measured. Choosing it and documenting it properly matters, because every future claim of reduction is arithmetic against this number.
Recalculating previously reported emissions after a structural change such as an acquisition, divestment, methodology revision or discovered error, so that comparisons over time remain meaningful. A baseline that cannot be restated is a baseline that will eventually mislead.
The two required ways of reporting Scope 2. Location-based uses the average emission factor of the grid you physically draw from. Market-based reflects the electricity you contractually purchased, including renewable instruments. A company can show a large market-based reduction with no change in what its meters actually did.
Renewable Energy Certificates, and their international equivalent, which represent the environmental attributes of a unit of renewable generation and can be purchased separately from the electricity itself. They affect market-based Scope 2 only, and their credibility depends on vintage and geographic matching to consumption.
Life cycle assessment, the method of quantifying environmental impacts across a product's full life, from raw material extraction to end of life. Carbon footprinting under ISO 14067 is an LCA restricted to the climate impact category.
Two boundary choices in product footprinting. Cradle-to-gate stops when the product leaves your factory. Cradle-to-grave continues through distribution, use and disposal. Comparing a competitor's cradle-to-gate figure with your cradle-to-grave figure is a common and meaningless comparison.
Product carbon footprint, the total greenhouse gas emissions associated with one unit of a product, expressed per piece, per tonne or per functional unit. It is the currency of CBAM, battery passports and OEM supplier programmes.
Environmental Product Declaration, an independently verified document reporting a product's life cycle environmental performance in a standardised format, widely used in construction materials procurement. Full guide.
The level below which an emissions source can be excluded without meaningfully affecting the total. Thresholds must be declared rather than assumed, and SBTi's V2.0 requirement to address every Scope 3 category at 5 percent or more of the total is an example of a threshold being set externally.
The same tonne of emissions or the same reduction being claimed more than once, whether by two companies in a value chain or by a buyer and seller of a carbon credit. Some double counting is inherent to scope accounting and is expected. Double counting a reduction claim is not.
The documented path from a reported figure back through the calculation, the emission factor and the activity data to the underlying source document. Frameworks rarely name it as a requirement, but it is what an assurer is actually testing when they ask where a number came from.
The higher of the two common assurance levels. The practitioner gathers sufficient evidence to give a positive opinion that the information is fairly stated. It requires substantive testing of underlying records, which in practice means tracing individual figures back to source documents. This is the level BRSR Core requires.
The lower level, delivered as a negative statement: nothing came to the practitioner's attention suggesting the information is materially misstated. The work is largely analytical review and enquiry rather than substantive testing. Limited assurance is considerably cheaper, and considerably less persuasive.
The independent firm giving the opinion. For BRSR Core, SEBI requires the provider to have no conflicting relationship with the entity, which in practice separates the assurance appointment from the statutory audit relationship.
In greenhouse gas practice, validation tests whether a forward-looking plan or methodology is sound, while verification tests whether reported historical data is accurate. Carbon credit projects are validated at design and verified at issuance.
A documented issue raised by a regulator or assurer. For a listed Indian entity, a SEBI observation becomes part of the public record, which is the mechanism that turns a data-quality problem into a reputational one.
A tradable instrument representing one tonne of CO2 equivalent either reduced, avoided or removed relative to a baseline, issued by a registry against a verified project methodology. Its integrity depends entirely on the strength of that baseline and the credibility of the registry.
Avoidance credits represent emissions that were prevented, such as a renewable project displacing fossil generation. Removal credits represent carbon physically taken out of the atmosphere and stored. The two are not interchangeable, and net-zero frameworks increasingly require removals specifically for residual emissions.
The test of whether the emissions outcome would have happened anyway without the carbon finance. A project that was commercially viable regardless is not additional, and credits from it do not represent a real reduction. It is the single most contested concept in carbon markets.
Whether stored carbon stays stored. A forest can burn; geological storage is more durable. Buyers increasingly price permanence explicitly rather than treating all removals as equivalent.
The body that issues, tracks, transfers and retires credits, maintaining the serial-numbered record that prevents the same credit being sold twice. Verra and Gold Standard are the largest voluntary registries.
Permanently removing a credit from circulation so it cannot be resold, which is the act that allows the retiring party to make a claim against it. A credit that has been purchased but not retired supports no claim at all.
A claim that emissions associated with a defined subject, whether an organisation, a product or an event, have been measured and matched by an equivalent quantity of retired credits. The claim's credibility rests on the boundary being stated, the measurement being sound, and the credits being appropriate to it.
A far stronger claim than carbon neutrality: deep absolute reductions across the value chain in line with a science-based pathway, with only genuinely residual emissions neutralised, and by removals rather than avoidance. Under SBTi's standard this typically means cutting roughly 90 percent of emissions before any neutralisation.
Investing in emissions reductions inside your own value chain rather than buying unrelated credits. Because the reduction happens where your Scope 3 sits, it changes your reported footprint rather than offsetting it, which is why frameworks treat it more favourably.
The provisions of the Paris Agreement governing international transfer of mitigation outcomes between countries, including the corresponding adjustment that prevents a host country and a buyer country counting the same tonne. It is the mechanism that connects voluntary markets to national commitments.
Presenting environmental performance as better than the evidence supports, whether by overstating a reduction, choosing a flattering boundary, or making a claim that measurement cannot substantiate. Increasingly a regulatory and litigation risk rather than only a reputational one.