The vocabulary, defined.

15 terms, drawn from our governed source corpus. General information on the law as it stands, not legal advice on your facts.

Carbon Border Adjustment Mechanism (CBAM)

An EU measure requiring imports of certain carbon-intensive goods (iron and steel, aluminium, cement, fertiliser, electricity, hydrogen) to bear a carbon cost equivalent to the EU's internal carbon price. In its definitive phase from 1 January 2026.

Carbon Credit Trading Scheme (CCTS)

India's domestic carbon market under the Energy Conservation Act, with a compliance mechanism (binding emission-intensity targets for obligated industrial entities) and a voluntary offset mechanism, administered by the Bureau of Energy Efficiency.

Comply-or-pay

The post-2021 character of India's Section 135 CSR obligation: a company that fails to spend or transfer the required amount faces a monetary penalty, unlike the earlier "comply-or-explain" regime.

Corporate Social Responsibility (CSR), Section 135

India's statutory obligation on qualifying companies to spend at least 2% of average net profits on prescribed social activities, the world's only mandatory-spend CSR regime.

CSDDD / CSRD

The EU's Corporate Sustainability Due Diligence Directive (a substantive duty to address human-rights and environmental harms across the value chain) and Corporate Sustainability Reporting Directive (a detailed disclosure duty). Both were narrowed by the 2026 Omnibus I package.

Double materiality

The EU reporting principle that companies must disclose both how sustainability matters affect the business (financial materiality) and how the business affects society and the environment (impact materiality), broader than the ISSB's single financial-materiality lens.

Extended Producer Responsibility (EPR)

The principle, implemented in India for plastic, e-waste, battery and tyre waste, that a producer's responsibility for a product extends to its post-consumer collection and recycling, discharged via targets and tradeable EPR certificates.

Green credit vs carbon credit

A green credit (under India's Green Credit Programme) rewards a broad set of voluntary environmental actions such as afforestation; a carbon credit (under the CCTS) specifically measures reduced or avoided greenhouse-gas emissions. They are not interchangeable.

Greenwashing

The making of false or exaggerated sustainability claims. India has no statutory definition; liability is residual under the SEBI Act, Companies Act and Consumer Protection Act.

ISSB baseline (IFRS S1 & S2)

The global baseline sustainability-reporting standards issued by the International Sustainability Standards Board in 2023, consolidating earlier frameworks (TCFD, SASB and others) and adopted or planned by a growing set of jurisdictions. India has not formally adopted them.

NGRBC

The National Guidelines on Responsible Business Conduct (2019), whose nine principles form the backbone of the BRSR.

Omnibus I

The EU's 2026 simplification package (Directive (EU) 2026/470) that raised the scope thresholds of, and delayed, the CSRD and CSDDD.

Scope 1, 2 and 3 emissions

Direct emissions from owned or controlled sources (Scope 1); indirect emissions from purchased energy (Scope 2); and all other indirect emissions across the value chain (Scope 3). BRSR Core assurance focuses on Scope 1 and 2.

Sustainability-linked bond (SLB)

A bond whose financial terms (e.g. coupon) are tied to the issuer's achievement of pre-defined sustainability performance targets; brought under SEBI's ESG debt-securities framework in June 2025.

Value-chain reporting

Disclosure of ESG data for a company's significant upstream and downstream partners. Made voluntary in India by SEBI's March 2025 circular.

For the instruments these terms come from, see the regulatory tracker, and for how they apply in practice, the FAQs.