The capture and utilization of CO₂ to prepare high-value compounds is very attractive chemically and highly desirable socially. Indenediide-based Pd SCS pincer complexes are shown here to promote the carboxylative cyclization of propargylamines leading to 2-oxazolidinones under mild conditions (0.5–1 bar of CO₂, DMSO, 40–80 °C, 1–5 mol % Pd loading). The indenediide Pd complex is competitive with known catalysts. It proved successful for a wide range of propargylamines, including hitherto challenging substrates such as secondary propargylamines bearing tertiary alkyl groups at nitrogen, primary propargylamines, and propargylanilines. Thorough experimental (NMR) and computational (DFT) investigations were undertaken to gain mechanistic insights. Accordingly, (i) the resting state of the catalytic cycle is a Pd DMSO complex; (ii) the indenediide backbone and Pd center act in concert to activate the carbamic acid intermediate and promote its cyclization; (iii) proton shuttling is essential to lower the activation barriers of the initial amine carboxylation as well as of the proton transfers between the ligand backbone and the organic fragments at Pd.