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Internal Carbon Pricing (ICP) is a tool companies use to assign a monetary value to their own greenhouse‑gas emissions , even if they don’t yet pay an external carbon tax. It’s an internal accounting mechanism that helps them anticipate future carbon costs , guide investments , and steer strategy toward a low‑carbon model. “We assume each tonne of CO₂  we emit costs  us  X  dollars — and use that assumption when we make business decisions.” Types of Internal Carbon Pricing

1. Wells Fargo Fake Accounts Scandal (2016 – U.S.) Issue: Employees created millions of fake accounts to meet unrealistic sales quotas. Governance Failure: Pressure from top leadership and lack of board oversight. Impact: $3 billion in fines and settlements; CEO resigned; damaged public trust. 2. Volkswagen “Dieselgate” (2015 – Germany) Issue: VW cheated emissions tests with illegal software in diesel vehicles. Governance Failure: Ethical lapses and lack of compliance mo

That’s an excellent and important question — especially in the current ESG and carbon markets landscape, where carbon tokens and carbon credits are often mentioned together but they are different things. 1. Carbon Credit — the Core Environmental Instrument Definition A carbon credit is a compliance-grade or voluntary unit that represents the removal or avoidance of one metric ton (1 tCO₂e) of greenhouse gas emissions from the atmosphere. Types Category Description Exampl

In the ESG (Environmental, Social, and Governance) and sustainability context, CCS stands for Carbon Capture and Storage (also sometimes called Carbon Capture and Sequestration ). Definition: Carbon Capture and Storage (CCS) refers to a suite of technologies designed to capture carbon dioxide (CO₂) emissions produced from industrial processes or power generation, and then transport and store the CO₂ in a way that prevents it from entering the atmosphere —typically by i

Carbon sinking (or carbon sequestration ) refers to the process of capturing and storing carbon dioxide (CO₂) from the atmosphere to reduce the amount of greenhouse gases and mitigate climate change . In other words, they are the conditions, processes, and variables that determine the strength and stability  of carbon sinks — in forests, oceans, and soils (and increasingly through technology). Carbon sinking factors are the natural or human‑driven elements that influence h

The difference between climate risk adaptation and mitigation lies in their objectives, approaches, and time horizons within climate action. They are complementary but distinct strategies, thus make sure you don't mix up both of them. 🌍 1. Climate Risk Mitigation Goal: Reduce or prevent greenhouse gas (GHG) emissions to slow down or limit future climate change . Focus: Addressing the cause of climate change. Approach: Cutting carbon emissions from energy, transport, and i

ESG transition risk is one of the most important (and sometimes misunderstood) parts of climate and sustainability risk management. Here’s a clear summary: 🌱 What is ESG Transition Risk? Transition risk refers to the financial and operational risks a company faces as the economy moves from a high‑carbon to a low‑carbon or even net‑zero future. While “physical risks” come from the direct impacts of climate change (acute or chronic: storms, floods, heat, etc.), transit

What Is SBTi? SBTi (Science Based Targets initiative) is a global framework that helps companies set greenhouse‑gas (GHG) reduction targets that are aligned with climate science — specifically, with the goals of the Paris Agreement to limit global warming to 1.5 °C above pre‑industrial levels. SBTi was co‑founded by CDP, UN Global Compact, WRI, and WW Launched in 2015 , SBTi is a collaboration among: CDP (formerly Carbon Disclosure Project) United Nations Global Compact

Emission factors express the warming potential of greenhouse gases (GHGs) relative to carbon dioxide (CO₂) , usually known as Global Warming Potentials (GWPs) over a 100‑year period (GWP₁₀₀). The most recently adopted authoritative values come from the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6, 2021) — which many international and regional regulators (including the  EU ETS,  UK DEFRA, and  ISO 14064‑1:2018 updates) have begun using or r

The IPCC stands for the Intergovernmental Panel on Climate Change , have around 195 countries as member. The IPCC is a scientific body established in 1988 by: the United Nations Environment Programme (UNEP) , and the World Meteorological Organization (WMO) . It was created to provide objective, scientific assessments about: climate change, its causes, its potential environmental and socio-economic impacts, and possible adaptation and mitigation strategies. 📘 What It Does

1. What Is COSO? COSO stands for the Committee of Sponsoring Organizations of the Treadway Commission — an independent U.S. private‑sector initiative founded in 1985 by five key professional associations: AICPA (Accountants) FEI (Financial Executives International) IIA (Internal Auditors) IMA (Management Accountants) AAA (Accounting Academics) COSO’s Purpose COSO develops frameworks to improve: Internal control Enterprise risk management (ERM) Fraud deterrence Corpora

Answer is definitely YES... Environmental, Social, and Governance ( ESG ) factors can create systematic risk when they affect the broader market or economy, not just individual firms. Here’s how it happens: 🧩 1. Mechanisms: How ESG Creates Systematic Risk a. Environmental (E) Climate change can lead to extreme weather events , resource scarcity, and regulatory shifts (like carbon pricing). These changes impact entire sectors (energy, agriculture, insurance) and supply cha

Scope 1 & 2 comparison table Category Scope 1 Emissions Scope 2 Emissions Definition Direct greenhouse gas (GHG) emissions from sources that are owned or controlled by the organization. Indirect GHG emissions from the generation of purchased energy (mainly electricity, steam, heating, or cooling) consumed by the organization. Source of Emission Occur directly from organization-operated facilities, assets, or vehicles. Occur at the utility provider’s site (where electrici

A carbon footprint is the total amount of greenhouse gases (GHGs) — primarily carbon dioxide (CO₂) but also methane (CH₄), nitrous oxide (N₂O), and others — emitted directly or indirectly by a person, organization, product, or activity. These emissions are always expressed as “CO₂ equivalent” (CO₂‑e) , meaning all greenhouse gases are converted into an equivalent amount of CO₂ based on their global warming potential (GWP). 💡 Types of Carbon Footprints Category Definitio

🌍 Introduction: What Are “Green” Instruments? Green financial instruments are investment or financing mechanisms designed to raise capital for projects that benefit the environment — reducing carbon emissions, promoting renewable energy, conserving biodiversity, and enhancing climate resilience. They help governments, corporations, and investors channel resources toward sustainability while earning financial returns. Green instruments form a critical part of ESG (Environm

The TNFD stands for the Taskforce on Nature‑related Financial Disclosures . 🌿 What It Is The TNFD is a global initiative that helps organizations understand, manage, and disclose their nature‑related risks and opportunities — similar to what the TCFD (Task Force on Climate‑related Financial Disclosures) does for climate. It provides a framework for companies and financial institutions to integrate biodiversity and ecosystem health into financial and strategic decisi

COP stands for Conference of the Parties — the supreme decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC) . 🌍 In simple terms It’s the annual global climate summit where almost every country on Earth meets to negotiate and decide collective actions to tackle climate change. 🏛️ Key Details “Parties” = the countries that have signed the UNFCCC (United Nations Framework Convention on Climate Change) (currently around 198 countries)

1. What Is “Assurance” in ESG/Sustainability Reporting? Assurance provides external verification of non‑financial (ESG) data — confirming that the information in a sustainability or climate report is reliable, consistent, and prepared in accordance with recognized standards such as: ISAE 3000 (Revised) – International Standard on Assurance Engagements AA1000 AS v3 – AccountAbility Assurance Standard CSRD / ESRS (EU) – which will mandate limited or reasonable assurance

⚖️ 1. What Is Net Zero? Net Zero means balancing the amount of greenhouse gases (GHGs) emitted into the atmosphere with the amount removed . In other words: The total emissions a country, firm, or individual releases ≈ the total removed through natural or technological means. How to Reach Net Zero Reduce emissions as much as possible (renewable energy, efficiency, electrification, etc.). Remove or offset residual emissions using: Reforestation and soil carbon sequestratio

Implementing Scope 3 greenhouse gas (GHG) emissions calculations can be quite challenging for most organizations. These emissions cover indirect activities outside a company’s direct control — such as supply chain operations, product use, and waste disposal. According to analyses from CDP (Carbon Disclosure Project) , S&P Global , and EY’s 2024 Climate Disclosure Benchmark : Roughly 75 – 80% of Fortune 500 companies publicly disclose their Scope 1 & 2 emissions. About 5