After you grab the 2nd Chaos Emerald (the blue one I think?), you will have a brief fight with a Titan that ends with you being thrown into the side of a mountain. After the cutscene, once you regain control of Sonic, the Hermit Koco (a grey, floating figure with a moss green beard) will be about 10 yards away from you (you may need to spin the camera around to see him on the red / grey track). Once you’ve spoken to him (and likely upgraded Sonic), you’ll get the achievement.