So, Evil Sonic took the phrase "You and I aren't so different after all" a little too much to heart and decided to change his look in some way. This was after he slept with Bunnie Rabbot by the way (no I'm not joking).
Anyways, he found Rouge the Bat and the two went looking for the Master Emerald. Also it's heavily implied that Scourge wants to fuck Rouge. Anyways, the two find the thing and, while Rouge distracts Knuckles' dad, Evil Sonic makes a beeline for and powers himself up using the Master Emerald. This turned him green for some reason. He was basically the same guy inside, but he referred to himself as "A real Scourge", and that's how he got his name.
This entire thing is objectively about as dumb as it sounds.