Introduction
‍In the realm of environmental sustainability, the Carbon Border Adjustment Mechanism (<a target="_blank" href="https://www.esgflo.com/blog-articles/cbam-carbon-border-adjustment-mechanism">CBAM</a>) emerges as a key policy tool designed to tackle carbon leakage and promote fair competition in the global marketplace. As advocates for Environmental, Social, and Governance (ESG) principles, understanding CBAM is paramount to navigating the evolving landscape of sustainable business practices. In this comprehensive guide, we explore the intricacies of CBAM, its rationale, operation, impact, and implications for businesses and investors alike.
<img src="https://cdn-images-1.medium.com/max/800/1*sEfDY3sYWYgdWqeqft3Pkg.png" alt />
What is CBAM?
‍The Carbon Border Adjustment Mechanism, or CBAM, is a proposed policy initiative by the European Union (EU) aimed at addressing the risk of carbon leakage associated with uneven climate policies across jurisdictions.
Read the full article here:
<a target="_blank" href="https://www.esgflo.com/blog-articles/cbam-carbon-border-adjustment-mechanism">https://www.esgflo.com/blog-articles/cbam-carbon-border-adjustment-mechanism</a>

**Introduction**

**‍**In the realm of environmental sustainability, the Carbon Border Adjustment Mechanism ([**CBAM**](https://www.esgflo.com/blog-articles/cbam-carbon-border-adjustment-mechanism)) emerges as a key policy tool designed to tackle carbon leakage and promote fair competition in the global marketplace. As advocates for Environmental, Social, and Governance (ESG) principles, understanding CBAM is paramount to navigating the evolving landscape of sustainable business practices. In this comprehensive guide, we explore the intricacies of CBAM, its rationale, operation, impact, and implications for businesses and investors alike.

![](https://cdn-images-1.medium.com/max/800/1*sEfDY3sYWYgdWqeqft3Pkg.png align="left")

**What is CBAM?**

**‍**The Carbon Border Adjustment Mechanism, or CBAM, is a proposed policy initiative by the European Union (EU) aimed at addressing the risk of carbon leakage associated with uneven climate policies across jurisdictions.

Read the full article here:

[https://www.esgflo.com/blog-articles/cbam-carbon-border-adjustment-mechanism](https://www.esgflo.com/blog-articles/cbam-carbon-border-adjustment-mechanism)

CBAM: Carbon Border Adjustment Mechanism