Git vs. Portable git
Solution 1:
Portable, in this context, means that you don't need any special installation procedure. You can just unpack the archive on a USB drive (typical case) and run it from there. The opposite of portable would be a program that needs some files to be at a specific location in the filesystem hierarchy, that requires registry entries, etc.
By the way, all git needs is a place to store checkouts and repositories. Environment variables automate some tasks, but they're not required for basic operation, you can use command line arguments instead, and you can set them for a single terminal session if you want to use them. So they don't affect portability.