What is carbon leakage?

Carbon leakage refers to a company relocating its activities to countries with weaker carbon and sustainability legislation. This relocation can cause the company's carbon footprint to rise due to a more extensive licence to pollute and the environmental costs of transportation. In addition, relocating to less regulated countries often results in inaccurate carbon measurement and skews the carbon emissions mapping and attribution. The risk of carbon leakage may be higher in energy-intensive industries.