Sustainability Simplified – Our Glossary of Terms

The topic of Sustainability is colossal, encompassing many subsections, including environmental, social, governance, economic, regulations and legislation.

The problem has several facets. There is a cavalcade of terms, some of which have multiple definitions, including the word Sustainability in its own right. Traversing the terminology, standards and rules can be tricky and time-consuming.

An organization must first understand a multitude of terms before planning and setting goals, whether that is reducing carbon emissions, producing better reports, increasing worker well-being or aligning with the UN Sustainable Development Goals (SDGs).

To support you, our subject matter experts have united and explored many sources to compile this glossary to help you understand and start or enhance your sustainability journey.

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A

AA1000 Assurance Standard

AccountAbility’s (AA) AA1000 Assurance Standard is one of the dominant environmental, social and governance (ESG) assurance standards. Adopting AA1000 avoids the need to expend resources on creating tailored guidelines. The framework’s flexibility enables it to be adopted by businesses of all sizes and industries – its scope can be customized to your company’s needs.

AA1000 was founded on the principles of:

1. Inclusivity – people should have a say on the decisions that impact them
2. Materiality – decision-makers should identify and be clear about the sustainability topics that matter
3. Responsiveness – companies should act transparently on material sustainability topics and their related impact
4. Impact – companies should monitor, measure and be accountable for how their actions affect their broader ecosystems

AA1000 emphasizes the need for organizations to engage effectively with stakeholders, identify material sustainability issues and demonstrate the existence of a responsible business strategy.

We can support you through the process, enabling you to enhance trust, reputation, stakeholder attraction and, when tied to financial lending, reduce capital costs.

Absolute target

An absolute target is defined by the reduction in absolute emissions over time.

Active ownership

Active ownership is a responsible investing method that influences an organization’s decisions and actions by engaging with the organization as a shareholder. It involves using the rights and position of ownership to impact investee companies’ activities or behaviors. Active ownership can be applied differently per asset class but, for listed entities, it involves engagement and voting activities.

Active transport

Active transport means traveling via a physical activity like walking, cycling, running, skateboarding or scooting.

Adaptive capacity

Adaptive capacity refers to the ability of systems, institutions, humans and other organisms to adjust to potential damage to seize opportunities or respond to consequences.

Afforestation

Afforestation sees new forests planted on lands that have never contained forests.

Agflation

Agflation concerns the increase in food prices due to heightened demand for food for human consumption and energy.

Agrichar

Agrichar is a black carbon byproduct of pyrolysis. Some suggest that it can improve soil’s ability to store carbon.

Air pollution

Air pollution is the contamination of the environment by any physical, chemical or biological agent that changes natural atmospheric characteristics. Air pollution and its impact on air quality are linked to our climate and ecosystems. Many air pollution drivers, such as burning fossil fuels, also emit carbon.

Air quality index (AQI)

An air quality index (AQI) highlights a specific area or country’s air contamination or expected pollution levels. It is a combination of pollution types. Different nations have their own AQIs corresponding to other air quality standards.

Alternative energy

Alternative energy has two categories:

1. Substitutes for existing petroleum liquids, such as ethanol and biodiesel
2. Alternative ways to generate and store electrical power, such as renewables like wind and solar

Alternative energy sources are vital to climate mitigation.

Anaerobic digestion

Anaerobic digestion is the natural process of decomposition and decay, where organic material breaks down into simpler chemical components under anaerobic conditions, i.e. without oxygen.

Atmosphere/air

The atmosphere is the layer of gases that envelopes the Earth. The atmosphere comprises nitrogen (about 80%), oxygen (about 20%), argon (about 1%), carbon dioxide (0.05%) and trace gases, including neon, helium, methane and krypton.

Avoided emissions

Avoided emissions quantify the emissions saved by products and services that can substitute high-carbon activities with low-carbon options. For example, replacing fossil-fuel power generation with wind or solar decreases economy-wide emissions. 

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B

Base year

The base year is the date chosen as the starting point against which emissions are tracked over time.

Base year emissions

Base year emissions refer to the volume of greenhouse gas (GHG) emissions generated in the base year.

Base year emissions recalculation

Base year emissions recalculation concerns recalculating emissions in the base year due to a change in the organization or accounting methodology that determines the emissions level to ensure data consistency over time.

Best-in-class

Best-in-class refers to an entity, such as an organization or country, that leads in sustainability practices and performance.

Beyond value chain mitigation (BVCM)

Beyond value chain mitigation (BVCM) refers to measures to prevent, decrease or eliminate greenhouse gas (GHG) emissions outside their value chain. Compensation and neutralization can be considered BVCM and additional to decarbonization, rather than its substitute.

Biodegradable

Biodegradable is something that decays into its basic components and blends into the Earth without harming the environment. No toxins are left behind.

Biodegradable municipal waste (BMW)

Biodegradable municipal waste (BMW) degrades and is better known as rubbish, garbage or trash.

Biodiesel

Biodiesel is a renewable fuel for diesel engines. It comes from natural oils, such as soybean oil.

Biodiversity

Biodiversity concerns the diversity of flora and fauna on Earth. Human-caused environmental damage reduces biodiversity. Creating a healthy, sustainable society requires increasing biodiversity.

Bioethanol

Bioethanol is a substitute for gasoline/petrol. It comes from cereal-based crops, such as wheat, maize (corn) and sugarcane.

Biofuel

Biofuels are fuels that come from biological sources, such as crops, new and used vegetable oils, animal fats and various waste. They can complement or replace traditional fossil fuels. However, each biofuel’s greenhouse gas (GHG) mitigation potential can vary considerably.

Biomass/biogas

Biomass, or biogas, is a substitute for natural gas. It is the biodegradable part of waste, products and residues from different industries like agriculture, forestry, aquaculture and fisheries. Biomass can be converted into electricity, burned to create heat or processed into biofuels. Because it is a fuel, some people use biomass and biofuel interchangeably. Biomass is a renewable organic material.

Plant-, wood- and other bio-waste are the most common biomass types used for energy. Biomass is a solid material that can be turned into biogas, mainly methane (CH₄), through microorganisms when there is no oxygen, also known as anaerobic digestion.

Biomimicry

Biomimicry is a design that seeks sustainable solutions by mimicking nature. The aim is to create products and services that adapt to life on Earth over the long term.

Biophilia

Biophilia is the love of life, living and the affinity for living things.

Blackwater

Blackwater is contaminated wastewater that must be drained from a building into blackwater pipes to avoid mixing with graywater.

Blue economy

A blue economy involves economic activities that create sustainable wealth from the oceans and coasts.

Bluewater/blue water

Bluewater, or blue water, refers to surface and groundwater.

Bluewashing

Bluewashing happens when an organization overstates its commitment to responsible social practices or hides information on its socially damaging practices.

Business model

A business model is a plan for successfully operating a business, identifying revenue sources, customer base, products and financing. Sustainability factors like social causes can be incorporated, too.

Business resilience

Business resilience is an organization’s ability to adapt in a changing environment to enable it to achieve objectives and prosper.

Business sustainability/corporate sustainability

Business sustainability, or corporate sustainability, refers to ethically and responsibly managing an organization’s continued success with environmental, social and financial concerns.

Business transformation

Business transformation is about making bold and fundamental changes to business operations, rather than incremental changes to the status quo.

Byproduct

Byproduct means excess materials produced. Companies will try to limit their byproducts for sustainability and financial reasons. 

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C

Carbon (C)

Carbon (C) is an element essential to life on Earth. It makes up the fats and carbohydrates of food and is part of molecules, such as DNA and protein, that make up our bodies.

Carbon accounting/greenhouse gas (GHG) accounting

Carbon accounting, also known as greenhouse gas (GHG) accounting, includes systematic methodologies, measurement and monitoring to evaluate and quantify an entity or activity’s carbon dioxide equivalent (CO₂e).

Carbon accounting can measure all GHG emissions, such as carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O) and fluorinated gases (F-gases). Gases, besides carbon, are expressed as carbon equivalents. It is a popular way for governments, businesses and individuals to assess and report their climate impact. The benefits include maintaining compliance, minimizing risk, enhancing brand equity and reducing inefficiency.

Importantly, carbon, or more specifically CO₂, is the main GHG resulting from human activities, but it is not the only one. Carbon is sometimes used inaccurately to describe all GHG activities.

Carbon Border Adjustment Mechanism (CBAM)

The EU’s Carbon Border Adjustment Mechanism (CBAM) places a carbon price on imports of products from countries with less ambitious national climate change policies. Proposed by the European Commission in 2021, the system aims to prevent carbon leakage. Part of the European Green Deal, the CBAM is expected to come into force in 2026.

Carbon budget

The carbon budget is the amount of greenhouse gases (GHGs) that humanity can emit into the atmosphere by the end of this century and still limit the global temperature increase compared to pre-industrial levels (1850-1900).

According to the Intergovernmental Panel on Climate Change (IPCC), the atmosphere can absorb, calculated from the beginning of 2020, no more than 400 gigatons of carbon dioxide (CO₂) if we are to stay below the Paris Agreement’s 1.5°C threshold. The carbon budget concerns an almost linear relationship between cumulative emissions and temperature rise.

Carbon capture and storage (CCS)

Carbon capture and storage (CCS) involves capturing carbon dioxide (CO₂) from chemical or biomass power plants and storing it to reduce CO₂ emissions. The technologies involved include forestry and air-filtering machinery that capture airborne CO₂. Innovative compensation efforts often include CCS mechanisms.

Carbon credit

A carbon credit is a tradable certificate or permit that incentivizes a company to reduce its emissions. When organizations create carbon offsetting initiatives, they receive a transferable or tradeable carbon credit or token. A credit allows the company to emit greenhouse gases (GHGs) and compensate for this elsewhere. A credit represents one ton of carbon dioxide (CO₂) reduced or removed from the atmosphere.

A company sets an emissions cap, which is reduced periodically. If a company exceeds this limit, it is fined. Unused certificates can be sold to other companies. The certificates are a market-oriented mechanism for decreasing GHG emissions. The number of available credits is reduced over time to reduce GHGs. In practice, these credits let owners reduce GHG emissions to get closer to net zero.

The term also refers to purchased credits that fund emission-reducing projects.

Carbon cycle

The carbon cycle includes the processes in which carbon (C) atoms circulate through Earth’s land, ocean, atmosphere and interior.

Carbon dioxide (CO₂)

Carbon dioxide (CO₂) is a colorless, odorless gas comprising one part carbon and two parts oxygen. It is a natural component of Earth’s atmosphere and is one of the most common greenhouse gases (GHGs).

CO₂ is released through human activities, such as burning fossil fuels and deforestation, as well as natural processes. Because humans release more CO₂ into the atmosphere than current biological processes remove, the CO₂ level in the atmosphere and oceans increases annually. Other GHGs include methane (CH₄), nitrous oxide (N₂O) and fluorinated gases (F-gases).

Carbon dioxide equivalent (CO₂e)

Carbon dioxide equivalent (CO₂e) is a single-unit metric to harmonize emissions from different greenhouse gases (GHGs) based on their global warming potential (GWP).

In GHG accounting, CO₂e is more accurate than CO₂ alone, as it covers the GWPs of all GHGs that capture heat and warm Earth’s atmosphere.

Carbon emissions/greenhouse gas (GHG) emissions

Carbon emissions, or greenhouse gas (GHG) emissions, are the carbon dioxide (CO₂) emissions released into the atmosphere. CO₂ is the primary GHG emitted from human activities.

Carbon footprint

A carbon footprint measures the total greenhouse gas (GHG) emissions, in carbon equivalents, produced by an individual, practice, product, organization or nation-state’s activities over time.

Carbon footprint verification (CFV)

Carbon footprint verification (CFV) aims to verify an organization’s carbon footprint. An organization must collect data on emissions caused by its activities, products and services. Once collected, an independent body, such as SGS, can verify the data accuracy and organization’s carbon footprint to help the organization understand the level of emissions it needs to reduce and/or offset to become carbon neutral.

CFV is essential to providing credibility and reassuring stakeholders that the organization’s carbon footprint is accurate, absolute and compliant with major greenhouse gas (GHG) reporting standards.

Carbon insetting

Carbon insetting seeks to reduce an organization’s emissions and carbon footprint within its supply chain or industry. The strategy involves investing in nature-based solutions, such as reforestation, agroforestry, renewable energy and regenerative agriculture. These aim to sequester carbon and create positive impacts for communities, landscapes and ecosystems linked to the company's value chain.

Carbon intensity

Carbon intensity refers to a group, individual, organization or country’s carbon emissions per unit of economic activity. Example include sales, gross domestic product (GDP) or power generation.

Carbon labeling

Carbon labeling concerns the amount of embedded carbon in a product.

Carbon leakage

Carbon leakage refers to an organization relocating its activities to countries with weaker carbon and sustainability legislation. This can see the organization’s carbon footprint rise due to more ability to pollute and the environmental costs of transportation.

Relocating to less regulated countries can also create inaccurate carbon measurements, skewing the carbon emissions mapping and attribution. The risk of carbon leakage may be higher in energy-intensive industries.

Carbon market

A carbon market is a voluntary or legally operated system that enables carbon credit trading between private and public entities. Carbon markets take many forms, such as cap-and-trade systems or carbon taxes, but the main principle remains – use market power to reduce greenhouse gas (GHG) emissions and mitigate the effects of climate change.

The aim is to create an economic incentive for companies to reduce their emissions, as they can sell unused allowances to others who need them. The Kyoto Protocol defined the first carbon market, creating three mechanisms to achieve emissions reductions:

1. International emissions trading (IET)
2. Joint implementation
3. Clean development mechanism

Carbon negative

Carbon negative is attained when a company’s activities go beyond achieving net-zero carbon emissions by removing additional carbon dioxide (CO₂) from the atmosphere.

Carbon neutrality/carbon neutral

Carbon neutral is a condition in which, during a specified period, the carbon footprint has been reduced due to greenhouse gas (GHG) emission reductions or removal enhancements and, if greater than zero, is then counterbalanced by offsetting.

Carbon offsetting/compensation

Carbon offsetting, or compensation, is the voluntary or mandatory purchase of carbon credits to balance an entity’s emissions. The price of a carbon credit used for compensation is the benchmark when comparing an investment for direct internal reductions.

Some greenhouse gas (GHG) emissions are impossible to avoid, and compensation through carbon credits helps achieve climate neutrality and net-zero objectives. Compensation includes investing in renewables, energy efficiency, reforestation, carbon capture and carbon storage through planting trees or restoring lands.

Carbon positive/climate positive

Carbon positive, also known as climate positive, is used by companies to announce their move beyond carbon neutrality by reducing/removing more greenhouse gas (GHG) emissions than they are generating.

Carbon pricing

Carbon pricing assigns a cost to emitting carbon dioxide (CO₂) into the atmosphere, usually via a fee per ton of CO₂ emitted, or limiting total emissions organizations can produce and issuing permits. Placing a cost on emissions is considered the most efficient way to encourage entities to decrease their emissions.

Carbon Reduction Commitment (CRC)

The Carbon Reduction Commitment (CRC) scheme applies mandatory emissions trading to cut carbon emissions from large commercial and public sector organizations.

Carbon sequestration

Carbon sequestration is the natural or manufactured capture and storage of carbon dioxide (CO₂). When capturing and storing carbon, we sequester it, which prevents it from entering the atmosphere. Planting trees is an example.

Carbon sink

A carbon sink is a place that absorbs more carbon than it releases. It continually takes carbon from the atmosphere through photosynthesis. Forests, oceans and other natural environments are examples.

Carbon token

A carbon token is a digital asset governed by a smart contract on a blockchain that represents a real-world reduction in one metric ton of carbon dioxide (CO₂) emissions. The asset verifies ownership and simplifies the carbon credit trading process.

Another example is a non-fungible token (NFT), representing single, unique shares of captured CO₂ for a specific time and place. Using blockchain technology for carbon tokens is controversial because of blockchain’s energy-intensive processes.

CDP (originally the Carbon Disclosure Project)

The CDP (originally the Carbon Disclosure Project) is a global not-for-profit that runs the world’s environmental disclosure system for investors, companies, cities and governments. It allows them to assess their impacts and take urgent action to build a truly sustainable economy.

Circular economy

A circular economy aims to eliminate waste by reusing, reducing, recycling, redesigning, sharing and repairing resources. It keeps products in circulation as much as possible by reducing material consumption, streamlining processes and collecting waste for reuse. This aims to reduce raw material use and production-related emissions.

A circular economy uses products or services to their fullest. When a product’s life cycle is over, its materials must be repurposed for the production phase. A traditional linear economy goes make, use, dispose.

Clean Development Mechanism (CDM)

The UN’s Clean Development Mechanism (CDM) permits emission-reduction projects in developing countries to earn certified emission reduction (CER) credits. Each credit equals one ton of carbon dioxide equivalent (CO₂e).

These certified emission-reduction credits can be traded, bought and sold. Industrialized countries use them to help meet Kyoto Protocol emission compensation targets.

Clean tech/cleantech/green technologies/eco-technologies

Clean tech, also known as cleantech, green technologies or eco-technologies, refers to technologies and processes aiming to limit negative environmental impacts, such as waste and carbon emissions, particularly compared to fossil fuels. Clean tech examples include solar and wind power, biofuels, recycling and smart lighting.

Climate

Climate is a specific geographical region’s average weather over a certain time. This period, the so-called standard period, generally lasts for 30 years. If the statistical mean values for temperature, wind or rain change over a more extended period (decades or longer), it demonstrates climate change.

Climate action

Climate action is a set of activities to tackle climate change and its impacts. This is usually done by decreasing greenhouse gas (GHG) emissions.

Climate adaptation/climate change adaptation

Climate adaptation, or climate change adaptation, is the act of preparing for and adjusting to climate change’s current and projected consequences. It can be policies and measures to make societies and companies more resilient to climate change’s impacts. For example, cities and towns can build seawalls to protect from rising sea levels.

Climate change

Climate change refers to the average temperature and weather pattern shifts that define a specific location over an extended period. It can also mean the rise in global temperatures from heat-trapping gases regarding mining and using oil, coal and other fossil fuels.

Some shifts may be natural, although, since 1800, human activities have been the main driver of climate change, primarily through burning fossil fuels that release greenhouse gases (GHGs) into the atmosphere and oceans above what a natural cycle can cope with. This causes local and global climate shifts and accelerated changes.

As emissions continue to increase, Earth is currently 1.1°C warmer on average than it was in the late 1800s. Climate change generally equates to warmer temperatures, but other effects include droughts, fires, flooding, storms, melting ice and biodiversity loss.

Climate impact

Climate impact is the cross-sector coordination to bring about large-scale changes.

Climate mitigation/climate change mitigation

Climate mitigation, or climate change mitigation, is the process of minimizing greenhouse gas (GHG) emissions and decreasing the amount of heat-trapping pollution. This mitigation differs from climate adaptation, which entails actions to adjust our lives or infrastructure to a new reality.

Climate mitigation examples include switching to renewable energy or making older equipment more energy efficient to limit climate change effects.

Climate positive

Climate positive happens when an organization or individual exceeds carbon neutrality by removing additional carbon dioxide (CO₂) from the atmosphere, also dubbed carbon negative.

Climate resilience

Climate resilience is the timely and efficient ability to support a community, company or the natural environment before, during and after a climate event. Climate resilience differs from climate adaptation, but the two are often linked.

Climate risk

Climate risk highlights the vulnerability of people and businesses as wildfires, droughts, food scarcity and other climate change effects happen. It is the potential for climate change to create negative effects on human or ecological systems. Risks fall into two main categories:

1. Risks based on transitioning to a greener economy, such as losing market share by moving away from fossil fuel-based products
2. Risks regarding climate change’s physical effects, such as flooded premises

Climate Risk and Vulnerability Assessment (CRVA)

The Climate Risk and Vulnerability Assessment (CRVA) evaluates the chances of current and future climate hazards. It is a crucial process for local authorities to understand the environmental and social impacts climate change will have on their jurisdiction.

Closed loop/closed-loop economy

A closed loop, also known as a closed-loop economy, is the most sustainable form of production and consumption. The production process reuses material waste to create additional products or repurpose recycled materials. In a circular economy, the input to create a product matches the output in a closed loop.

Co-management inventory (CMI)

Co-management inventory (CMI) sees retailers and manufacturers work together to decrease the stock holding level to improve supply chain product availability.

Combined heat and power (CHP)

Combined heat and power (CHP) uses waste heat, a byproduct of energy production, to heat spaces and reduce energy consumption, saving emissions and money.

Composting/compostable

Composting is the controlled decomposition of organic materials. These are the correct conditions a material needs to break down completely into non-toxic components that support plant growth.

Conference of the Parties (COP)

The Conference of the Parties, more famously known as COP, is the UN Framework Convention on Climate Change’s (UNFCCC) decision-making body. This includes an annual international climate meeting to encourage universal action.

COP means the countries that joined are legally “party to” the UNFCCC. Parties to the treaty have committed to take voluntary actions to prevent “dangerous anthropogenic (human-caused) interference with the climate system.” The first COP meeting, COP1, was held in Berlin, Germany, in 1995.

Conscious capitalism

Conscious capitalism is a socially responsible framework for capitalism in the corporate and political arenas. It emphasizes creating human value alongside profit value.

Conscious consumerism/ethical consumerism

Conscious consumerism, or ethical consumerism, sees customers vote with their wallets or purses by purchasing responsibly produced products and services, e.g. ones that do not harm or exploit workers and minimize environmental impacts.

Conservation

Conservation is the protection and preservation of natural habitats, such as rainforests, mangroves and moorlands.

Consolidation/consolidation of logistics

Consolidation, also known as consolidation of logistics, sees two or more deliveries combined into one. It can refer to incoming and outgoing transports. On a larger scale, consolidation can concern consolidating entire transport flows.

Convention on Biological Diversity (CBD)

The UN’s Convention on Biological Diversity (CBD) aims to protect and preserve Earth’s biological diversity for future generations.

Corporate carbon footprint (CCF)

Corporate carbon footprint (CCF) represents a reporting company's direct and indirect carbon dioxide equivalent (CO₂e) emissions for a defined period, usually a year.

Corporate controversies

Corporate controversies occur when an organization or one of its representatives acts improperly, unethically or negligently as to negatively impact stakeholders, resulting in damage to and, in some cases, the collapse of the organization.

Corporate governance

Corporate governance was a framework initially designed to ensure that an organization’s management acted in shareholders’ best interests. More recently, there has been greater recognition of the value of considering all stakeholders.

Corporate social responsibility (CSR)

Corporate social responsibility (CSR) allows a company to incorporate some social causes or contributions into its business model or employee culture. It helps them gauge social and environmental benefits alongside organizational goals like profitability.

Corporate Sustainability Due Diligence Directive (CSDDD/CS3D)

The EU’s Corporate Sustainability Due Diligence Directive (CSDDD/CS3D) is major legislation that will require EU and non-EU organizations to conduct environmental and human rights due diligence across their operations, subsidiaries and value chains. The directive’s goal is to foster sustainable and responsible corporate behavior, and anchor human rights and environmental considerations in organizations’ operations and corporate governance.

The CSDDD will ensure that businesses address the adverse impacts of their actions, including those in their value chains inside and outside Europe. This will reduce the risk of adverse human rights and environmental impacts within global value chains.

The benefits to citizens, companies and developing countries are far-reaching and include:

• Better protection of human rights and the environment
• Improved access to justice for victims
• A harmonized legal framework for companies in the EU
• Better access to finance
• Improved living conditions

Corporate Sustainability Reporting Directive (CSRD)

The EU’s Corporate Sustainability Reporting Directive (CSRD) entered into force on January 5, 2023, to modernize and strengthen the rules concerning the social and environmental information that organizations must report.

The CSRD will:

• Unite financial data, environmental, social and governance (ESG) information and assurance
• Replace the Non-Financial Reporting Directive (NFRD)
• Improve the consistency and quality of sustainability information
• Outline ESG reporting requirements
• Establish a shared framework for reporting non-financial data
• Expand upon the NFRD concerning who needs to report and what needs to be reported
• Enforce rigorous, robust and standardized reports
• Accelerate responsible change and create transparency across all sectors by standardizing the disclosure, reporting and assurance of sustainability metrics

A broader set of large companies and listed small to medium-sized enterprises (SMEs) will now be required to report on sustainability, compared to the NFRD eligibility criteria. The directive is estimated to increase the number of organizations affected from around 11,000 to 50,000.

For EU-based organizations and non-EU organizations with EU-based subsidiaries or securities on EU-regulated markets, the pathway to more sustainable practices will be unavoidable.

As well as organizations currently in the NFRD’s scope, the CSRD will impact all EU-based organizations with:

• A EUR 40 million or more net turnover
• At least EUR 20 million in assets
• 250 or more employees

Every listed organization will also be affected, except micro-enterprises at first. The first companies will have to apply the new rules in the 2024 financial year, for reports published in 2025.

Cradle to cradle

Cradle to cradle is another term for a circular economy. Instead of manufacturing a product from scratch, the same product creates a new one.

Cradle to grave

Cradle to grave refers to a product’s life cycle, from creation to end use.

Crowdfunding

Crowdfunding sees people network and pool their money, usually online, to support a range of activities, including funding startups, disaster relief and campaigns.

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D

Decarbonization

Decarbonization concerns removing or reducing all human-made carbon emissions in the atmosphere. It is achieved through cross-cutting measures to decrease or eliminate carbon emissions from an organization or individual's activities.

Decarbonization differs from climate neutrality because it aims to reduce absolute carbon emissions and intensity. Climate neutrality does not necessarily include decarbonization, as climate neutrality can be achieved solely through buying carbon credits.

Decentralized energy (DE)

Decentralized energy (DE) sees energy produced on a local scale, away from a conventional large-scale power plant production process.

Deforestation

Deforestation is the process of harvesting forests for natural resources or to clear land for agriculture or construction. This harms the environment because the converted land usually emits carbon and, with fewer trees, is less capable of absorbing carbon dioxide (CO₂). Deforestation that happens faster than forests are able to recover causes environmental damage, such as biodiversity loss and climate change.

Digital carbon footprint

A digital carbon footprint is the amount of greenhouse gas (GHG) emissions digital devices, tools and platforms produce. All technology, such as cloud computing, mobile phones and internet use, produce a digital carbon footprint.

Digital sobriety

Digital sobriety aims to limit the harmful environmental impact of smartphones, internet use, digital media and other technologies daily. Moving toward sobriety includes actions like buying fewer devices and lower-power machines, deleting emails, choosing lower-definition media consumption and sustainably developing software.

Direct emissions/direct greenhouse gas (GHG) emissions

Direct emissions, or direct greenhouse gas (GHG) emissions, come from sources owned, produced and controlled by an organization. These are scope 1 emissions, according to the Greenhouse Gas Protocol (GHG Protocol). To note, indirect emissions are the consequence of the reporting organization’s activities, but are controlled or produced by another business.

Disclosure/disclosing

Disclosure, such as environmental, social and governance (ESG) disclosures and reports, sees an organization evaluate and disclose its ESG-related data covering business operations, opportunities and risks. Organizations measure and disclose risks using a selected sustainability framework or frameworks. Capital markets and purchasing organizations use such data to inform decisions.

Diversity and inclusion

Diversity and inclusion are two broad areas. Diversity concerns the differences in people, such as gender, age, ethnicity, disability, sexual orientation, religion and beliefs.

Inclusion embraces and promotes diversity, addresses inequality and ensures people feel valued and respected, whatever their backgrounds or beliefs.

Doha Amendment

The Doha Amendment to the Kyoto Protocol establishes the second commitment period (2013-2020) to reduce greenhouse gas (GHG) emissions.

This amendment unilaterally strengthens the commitments by individual parties and assists developing countries with low-GHG emissions in accessing financial assistance to adapt to climate change’s impacts. It also added nitrogen trifluoride (NF₃) to the list of GHGs covered.

Double materiality focuses on two main areas:

1. An organization’s impact on the environment and people (inside-out position)
2. Sustainability-related developments and events that create risks and opportunities for an organization (outside-in position)

Double materiality is fundamental to Corporate Sustainability Reporting Directive (CSRD) compliance. Under the CSRD, organizations must disclose their impact on the above and how they could affect the organization going forward.

A double materiality assessment enables a company to identify which sustainability aspects are most material to the business and its stakeholders. This assessment:

• Determines the scope of sustainability reporting
• Enables efficient allocation of the resources needed for CSRD compliance
• Provides essential insights for shaping company strategy

Under double materiality, a sustainability topic can be material for an organization when it meets impact materiality and/or financial materiality criteria, hence the use of “double.”

Doughnut economics

Doughnut economics is a theory, shown via a doughnut-shaped diagram, for operating within social and environmental sustainability boundaries.

Drawdown

A drawdown happens when atmospheric greenhouse gas (GHG) levels stop climbing and start declining.

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E

Eco-conscious

Eco-conscious is the mentality of focusing on reducing environmental impacts wherever possible.

Eco-districts

An eco-district is a collaborative planning approach focusing on regenerative urban development at the neighborhood level.

Eco-footprint

An eco-footprint is the area of natural resources a human population requires to produce the products it consumes and to absorb its waste.

Eco-friendly

Eco-friendly generally concerns environmentally minded actions that cause minimal harm to the Earth. When it comes to marketing and green marketing, using “eco-friendly” is best avoided, as it is vague and fluid, and can impact your business. See our Greenwashing definition.

Ecological footprint

Your ecological footprint measures how much natural resources you use daily and the land your lifestyle requires. A person or community’s environmental impact is the amount of land needed to sustain its use of natural resources.

Ecological restoration

Ecological restoration is the complex process of artificially restoring an ecosystem to its original form. However, research suggests that once an ecosystem is damaged, it is almost impossible to restore it to its original form. That said, ecological restoration is still a crucial process.

Electric vehicle/EV

An electric vehicle, or EV, runs on electricity powered by a rechargeable battery.

Electronic waste/e-waste

Electronic waste, or e-waste, concerns electronics at or close to the end of their useful lives. Green technology and sustainability approaches aim to extend the useful life of devices, using circular economy features to minimize e-waste. The priority is to reduce waste before refurbishing devices and moving toward recycling.

Embedded carbon/embodied carbon

Embedded carbon, or embodied carbon, describes how the carbon footprint of a product (CFP), as measured by a full life cycle assessment, is usually measured in kilogram of carbon dioxide equivalent (kgCO₂e) per kg of material.

Embedded water/virtual water/embodied water/shadow water

Embedded water, which has numerous different names, concerns the amount of water used to produce a good end to end.

Emissions/emissions to air

Emissions, or emissions to air, are all the gases, including pollutants, greenhouse gases (GHGs) and other substances, that could potentially impact air quality and contribute to environmental changes. Since industrialization, human activities have significantly transformed our atmosphere’s chemical composition through greenhouse gas (GHG) and substance release.

Emissions trading/cap-and-trade

Emissions trading, or cap-and-trade, is a market system for reducing greenhouse gas (GHG) emissions. An emissions trading scheme sees a government set a cap or limit on the total amount of emissions a particular sector or region can produce. This cap is then divided into a certain number of allowances, each representing the right to emit a certain amount of GHGs.

These allowances can be bought and sold, allowing companies that can reduce their emissions at a lower cost to sell their excess allowances to companies finding it more expensive to reduce emissions.

The goal is to create an economic incentive to reduce emissions, as organizations can sell unused emissions allowances to other entities needing them. This allows for the most cost-effective emissions reductions, as companies will naturally reduce their emissions where it is cheapest. Emissions trading systems can regulate specific sector’s emissions, such as power plants or factories, or, even, an entire country or region.

Energy efficient/energy efficiency

Energy efficiency involves using the lowest amount of energy possible to provide power. It aims to see the same task or result achieved with less energy.

Environmental justice

Environmental justice aims to treat all people, regardless of race, color, nationality or income, fairly regarding environmental laws, regulations and policies. The approach states that no group should have a disproportionate share of negative environmental consequences.

Environmental management systems

Environmental management systems include processes and practices that enable an organization to reduce its environmental impact. The most common framework is ISO 14001 – environmental management systems.

Environmental, social and governance (ESG)

Environmental, social and governance (ESG) uses standard criteria to evaluate and demonstrate an organization’s sustainability performance and success.

Stakeholders expect organizations to not only deliver financial performance but also positively contribute to society:

• Environmental criteria consider how an organization performs as a steward of nature
• Social criteria address how an organization manages social relationships with employees, suppliers, customers and the communities where it operates
• Governance deals with an organization’s leadership, executive pay, audits, internal controls and shareholder rights

ESG is the basis for numerous regulations, such as the Non-Financial Reporting Directive (NFRD), Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR).

The growing interest in measuring and ranking ESG by investors and businesses reflects the perspective that ESG should be factored in when considering business success.

Environmental, social and governance (ESG) frameworks

Environmental, social and governance (ESG) frameworks vary but contain objectives companies can use to report on ESG issues. Effective materiality analysis requires the correct ESG framework. However, there is no one-size-fits-all approach because each company has its own materiality characteristics based on factors, such as industry type, where it operates and stakeholder demands.

This affects the approach an organization takes, allowing them to set the agenda and direction for their ESG journey. The approach must be clear, verifiable and defendable.

Several well-established ESG frameworks exist, including:

• CDP (originally the Carbon Disclosure Project) – a global, not-for-profit environmental disclosure system for investors, companies, cities, states and regions
• Corporate Human Rights Benchmark (CHRB) – a public and credible ranking system of corporate human rights-related policies, processes and practices
• Corporate Sustainability Reporting Directive (CSRD) – this EU initiative aims to modernize and strengthen the rules concerning the social and environmental information that organizations must report
• Global Reporting Initiative (GRI) – a non-profit and independent standards organization that helps organizations report ESG impacts
• International Sustainability Standards Board (ISSB) – develops sustainability disclosure standards backed by the G7, G20 and more. It builds on the work of market-led investor-focused reporting initiatives, including the Climate Disclosure Standards Board (CDSB), Task Force for Climate-Related Financial Disclosures (TCFD), Value Reporting Foundation’s Integrated Reporting Framework and industry-based Sustainability Accounting Standards Board (SASB) Standards, as well as the World Economic Forum’s Stakeholder Capitalism Metrics
• ISO 26000 – guidance on social responsibility for any organization
• Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct – guidelines for enterprises to conduct due diligence to identify, prevent or mitigate, and account for how actual and potential adverse impacts are addressed
• Science Based Targets initiative (SBTi) – a non-profit partnership that helps private sector organizations set science-based emissions targets to uphold climate science and the Paris Agreement. The partnership is between the CDP, World Resources Institute (WRI), World Wide Fund for Nature (WWF) and UN Global Compact
• Task Force for Climate-Related Financial Disclosures (TCFD) – an initiative to improve and increase the reporting of climate-related financial information

To note, the CSRD and ISSB are an amalgam of the TCFD and GRI.

Environmental, social and governance (ESG) fund ratings

Environmental, social and governance (ESG) fund ratings are often provided by third-party commercial providers like Morningstar and MSCI. A rating system examines a fund’s underlying holdings, scoring its overall ESG risk based on specific metrics. The chosen metrics and ratings vary between providers.

Environmental, social and governance (ESG) indices

Environmental, social and governance (ESG) indices traditionally track a basket of bonds or shares’ performance, such as the FTSE 100. An increasing number of indices track investments by excluding certain industries or, more recently, by evaluating companies based on ESG measures. For example, FTSE4Good excludes organizations that fail to meet specific ESG criteria.

Environmental, social and governance (ESG) integration

Environmental, social and governance (ESG) integration incorporates ESG considerations into the investment process alongside established financial analysis. This helps investors understand the most significant ESG factors that an investment is exposed to. It also ensures compensation for any associated risks.

Environmental, social and governance (ESG) investing

Environmental, social and governance (ESG) investing has many alternative names – socially responsible investing, ethical investing, impact investing and sustainable investing. These terms refer to investments that prioritize optimal ESG factors and outcomes.

ESG investing is widely seen as a way of investing “sustainably”, where investments are made considering environmental and human well-being, alongside the economy. It is based on the growing assumption that organizations’ financial performance is increasingly affected by environmental and social factors.

Morningstar analysis in 2021 found that Millennials, Generation X and Boomers all had similar preferences for owning sustainable investments. Financial institutions understand this, with the number of investment managers reporting at least one ESG fund in their holdings growing 300% since 2016.

Ethical investing

Ethical investing prioritizes an investor’s ethical goals rather than just maximizing financial returns.

EU Deforestation Regulation (EUDR)

The EU Deforestation Regulation (EUDR) promotes the consumption of deforestation-free products to vastly reduce greenhouse gas (GHG) emissions from deforestation while assisting the fight against global biodiversity loss. It provides assurance that the EU will not contribute to any deforestation or forest degradation.

EU operators or traders importing, exporting or marketing the below items, including derived products, to or from the EU must be EUDR compliant to guarantee their commodities are not associated with deforestation, forest degradation or local environmental or social legislation breaches in the country of production.

The EUDR covers:

• Cattle – live cattle, meat and leather
• Cocoa – cocoa beans, paste, butter, powder and chocolate products
• Coffee – roasted, unroasted and decaffeinated coffee, and substitutes containing any proportion of coffee
• Oil palm – nuts, kernels, palm oil, glycerol and palm oil-derived fatty acids
• Rubber – natural rubber, gums and all articles of vulcanized rubber, whether hard or not, including tires and clothing
• Soya – soya beans, meal oil and residues, including oilcake
• Wood – logs, processed wood, wooden furniture, paper and packaging

Due diligence must follow the proposed method transparently and informatively along the supply chain. The primary responsibility lies with the organization placing the commodity on the EU market or exporting it. The consequences for noncompliance include hefty fines, the confiscation of products/revenue and temporary exclusion from the market.

The regulation applies from December 30, 2024, covering commodities produced on land not subject to deforestation after December 31, 2020.

EU Green Claims Directive

The EU’s Green Claims Directive aims to ensure that environmental labels and claims are credible and trustworthy, so consumers can make more informed purchasing decisions.

It will also boost the competitiveness of businesses striving to increase the sustainability of their products and activities.

The directive aims to:

• Make green claims reliable, comparable and verifiable across the EU
• Protect consumers from greenwashing
• Contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions
• Help establish an even playing field concerning product environmental performance

It also aims to target explicit claims that:

• Are made voluntarily by businesses toward consumers
• Cover a product or trader’s environmental impacts, aspects or performance
• Are not currently covered by other EU rules

To ensure reliable, comparable and verifiable environmental product information, the proposal includes:

• Clear criteria on how organizations should prove their sustainability claims and labels
• Requirements for these claims and labels to be checked by an independent and accredited verifier
• New rules on the governance of environmental labeling schemes to ensure their effectiveness

In March 2023, the European Commission adopted a proposal on the directive that complements and further operationalizes the proposal for a directive on empowering consumers in the green transition.

Once enforced, member states will have 18 months to transpose the directive into national law and six more months before the rules are applied. The European Commission expects around four years for the directive to apply.

EU Taxonomy

EU Taxonomy sets criteria to determine whether an economic activity significantly contributes to six environmental objectives related to sustainability principles:

1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity and ecosystems

The regulation aims to provide a common framework to assess the sustainability of economic activities.

Large companies and financial market participants must disclose the environmental impact of their capital spending against these pillars to allow consumers and governments to integrate non-financial performance into their buying decisions.

European Green Deal

The European Green Deal aims to help the EU’s green transition to climate neutrality by 2050.

It supports the EU’s transformation into a fair and prosperous society with a modern and competitive economy.

It underlines the need for a holistic and cross-sectoral approach in which all relevant policy areas contribute to the ultimate climate-related goal. Initiatives cover the climate, environment, energy, transport, industry, agriculture and sustainable finance – all of which are strongly interlinked.

European Sustainability Reporting Standards (ESRS)

The European Sustainability Reporting Standards (ESRS) set out the requirements for companies to report on sustainability-related impacts, opportunities and risks under the Corporate Sustainability Reporting Directive (CSRD).

Organizations must disclose information on:

• Governance – the processes, controls and procedures used to monitor and manage impacts, risks and opportunities
• Strategy – how the organization’s strategy and business model(s) interact with its material impacts, risks and opportunities, including the strategy for addressing them
• Impact, risk and opportunity management – the processes by which impacts, risks and opportunities are identified, assessed and managed through policies and actions
• Metrics and targets – how the organization measures its performance, including progress toward the set targets

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F

Fairtrade Foundation

The Fairtrade Foundation provides principles, including better prices, safe working conditions, local sustainability and fair terms of trade for farmers and workers.

FAIRTRADE mark

The FAIRTRADE mark is used on products certified against internationally recognized Fairtrade standards.

Feed-in tariff

A feed-in tariff is a policy to accelerate renewable energy investments. It usually involves long-term government contracts to ensure a fixed price for renewable energy generation to incentivize investments in renewables.

Food miles

Food miles refers to the distance food is transported, from its preparation to reaching the consumer. Food miles is one factor considered when determining the environmental impact of food.

Forest degradation

Forest degradation sees a forest deteriorate so it no longer supports people and wildlife, for example, by filtering air for breathing and water for drinking, and providing animals with food and homes.

The main cause of forest degradation is unsustainable and illegal logging. Climate change, particularly higher temperatures and unpredictable weather patterns, also increases the risk and severity of forest fires, disease and pest infestation.

Forest risk commodity

A forest risk commodity is a material derived from forests or woodland used for production and sees forests converted for agricultural use.

The seven commodities responsible for most agricultural deforestation are:

1. Timber products
2. Palm oil
3. Cattle
4. Soy
5. Rubber
6. Coffee
7. Cocoa

Forest Stewardship Council (FSC)

The Forest Stewardship Council (FSC) is an independent, non-governmental, not-for-profit organization established to respond to global deforestation concerns.

It provides internationally recognized standards setting, trademark assurance and accreditation for organizations and communities interested in responsible forestry.

Fossil fuels

Fossil fuels, such as coal, oil and natural gas, are materials formed naturally in the Earth’s crust from dead plants and animals over millennia. They are extracted and mainly used for fuel.

According to the UN, over 80% of carbon dioxide (CO₂) generated by humans comes from burning fossil fuels.

Their extraction, combustion and emissions negatively affect the carbon cycle that, in balanced states, allows climate stability and a functioning biosphere.

Freecycle

Freecycle is the act of exchanging goods to extend their life cycle and keep reusable items out of landfills.

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G

Gender pay gap

The gender pay gap concerns equality and indicates the difference between men and women’s average or median earnings.

Geothermal energy

Geothermal energy is a renewable energy source derived from hot water or steam within the Earth that typically creates electricity.

Global surface temperature (GST)

According to earth science, the global surface temperature is calculated by averaging the temperature at the surface of the sea and air temperature over land.

In technical writing, scientists call long-term changes in GST global cooling or global warming. Periods of both have happened regularly throughout Earth's history.

The global average temperature has warmed by 1.09°C (range 0.95-1.20°C) from 1850-1900 to 2011-2020.

Global warming

Global warming is the gradual heating of Earth’s surface due to trapped greenhouse gases (GHGs) from human activities, mainly burning fossil fuels, that increase heat-trapping GHG levels in the atmosphere. This is observed since the pre-industrial period (1850-1900).

The phenomenon has always occurred, but we are primarily concerned with human-caused (anthropogenic) global warming. This defines how human behavior impacts the speed and intensity of the planet’s heating.

Climate change includes warming and its side effects, such as melting glaciers and more frequent droughts.

Global warming potential (GWP)

The global warming potential (GWP) index helps measure the relative warming effects of greenhouse gases (GHGs), using carbon dioxide (CO₂) as the baseline and harmonizing all gases as CO₂ equivalents.

Due to these gases’ differing lifetime effects, e.g. methane (CH₄) dissipates quicker than CO₂, the appropriate time horizon is crucial.

Green

Green means behavior, products, policies and people, etc., that minimize environmental change.

Green bonds

Green bonds raise finances for environmentally sustainable or climate-related investments. They are like traditional bonds because they pay interest to investors. However, proceeds from their sale are specifically reserved for projects with positive environmental impacts.

They are usually issued with the same credit rating as the issuer’s traditional bonds, and the maturity, coupon and other terms are like those of other bonds. However, green bonds might have additional features, such as the use of proceeds, to ensure funds are for a specific environmental project.

Green bonds are subject to independent review and certification to ensure proceeds are going to eligible green projects.

The demand for green bonds has grown in recent years, as investor interest in environmentally friendly investments increases. Green bonds help finance renewable energy, energy efficiency, sustainable transportation and water treatment plants, among others. They also help raise awareness, encourage investment in environmental projects and help align financial markets with Paris Agreement goals.

Green buildings

A green building is based on ecological principles to maintain a healthy structure that minimizes environmental impacts. Crucial features include decreasing or eliminating adverse ecological effects while creating positive developments.

Green cloud

The green cloud concerns the possible environmental benefits for IT services stored or transferred over the internet. Considered a buzzword, the alleged benefits could enable technologists to feel that further efforts to reduce carbon footprints are unnecessary.

Green computing

Green computing is a sustainable approach to using computers, devices and equipment. Examples include reducing resource use, responsibly disposing of e-waste and deploying energy-efficient IT equipment.

Green hushing

Green hushing refers to companies intentionally hiding sustainability goals. Reasons include the fear of greenwashing accusations or falling short of stated goals.

Green IT

Green IT is the practice of designing, manufacturing, operating and disposing of IT products and devices to minimize the negative effects of operations on the environment.

Green marketing

Green marketing highlights a product or service and a company’s environmental credentials, but there is a fine line between green marketing and greenwashing.

Green marketing is when organizations sell products or services, or produce environmental, social and governance (ESG) reports, based on genuine environmental positives and data. This is enhanced by third-party verification.

Green marketing is considered honest and transparent, and meets several criteria:

• Sustainably manufactured
• Free of toxic or ozone-depleting materials
• Recyclable or made from recycled materials
• Made from renewable materials, such as bamboo
• Not made of materials harvested from protected areas, or that negatively impact threatened or endangered species through harvesting
• Not made via slave or unfairly paid labor
• Does not use excessive packaging
• Designed to be repairable, rather than disposable

Beware – if green marketing is based on falsehoods or does not meet sustainable business practice standards, the organization could be accused of greenwashing and receive hefty penalties, negative press and reputational damage.

Green premium

Green premium was coined by Bill Gates. It refers to the economic and environmental costs of choosing clean technology over financially sound options with higher greenhouse gas (GHG) emissions.

Green software

Green software is applications designed, developed and implemented to minimize energy consumption and environmental effects.

Greenhouse effect

The greenhouse effect happens when naturally occurring greenhouse gases (GHGs), such as carbon dioxide (CO₂), methane (CH₄), nitrogen oxide (N₂O) and fluorinated gases (HFCs), build up in the Earth’s atmosphere. This traps the Sun’s heat as it reflects from the Earth’s surface, warming the planet and increasing global temperatures.

Without the natural greenhouse effect, the global mean temperature would be -18°C, therefore uninhabitable for humans. Humans amplify the natural greenhouse effect by releasing GHGs when burning fossil fuels like coal, oil and gas.

Greenhouse Gas Protocol (GHG Protocol)

The Greenhouse Gas Protocol (GHG Protocol) is a globally recognized standard for measuring and managing private and public sector GHG emissions. It was established in 1990 out of the need for a consistent GHG reporting framework.

Today, it collaborates with governments, industry associations, businesses and others to provide the most used emissions calculation guidelines, covering operations, value chains and mitigation actions, etc.

The GHG Protocol has enabled public and private sector decarbonization through a unified emissions management framework. Countries and companies committed to the Paris Agreement must reduce their GHG emissions. They must account for, report and mitigate emissions by following standards like the GHG Protocol.

Greenhouse gases (GHGs)

Greenhouse gases (GHGs) include carbon dioxide (CO₂), ozone (O₃), methane (CH₄) and nitrous oxide (N₂O). They are in the atmosphere and have different chemical compositions and properties, therefore diverse strengths and timescales that contribute to the greenhouse effect.

GHG emissions are significantly driving the atmospheric temperature increase. According to the Intergovernmental Panel on Climate Change (IPCC), around 59 billion tons of GHGs were emitted in 2019, with a large part being CO₂.

Greenwashing/green sheen

Greenwashing, also known as green sheen, occurs when an organization intentionally or unintentionally exaggerates environmental credentials to appear more environmentally friendly than they are in reality.

Environmentalist Jay Westerveld coined the term in a critical essay inspired by the irony of the hotel industry’s “save the towel” movement. The industry devised one of the most deliberate examples of greenwashing. Notices were placed in hotel rooms asking guests to reuse towels to save the environment. The hotels were more concerned with decreasing laundry costs than sustainability.

Greywater/gray water

Greywater, also known as gray water, is domestic wastewater without toxic chemicals, including washing, bathroom, kitchen and laundry water, collected for secondary uses.

Ground source heat pump/ground-to-water heat pump

A ground source heat pump, or ground-to-water heat pump, transfers heat from the ground outside a house to heat that house’s radiators or underfloor heating. It can also heat water stored in a hot water cylinder to heat tap water and showers.

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H

High emitters

High emitters are organizations or countries that emit comparatively high greenhouse gas (GHG) volumes. Per capita emissions are used to measure national emissions.

Human capital management (HCM)

Human capital management (HCM) covers practices and tools to attract, recruit, train, develop, manage and retain staff to achieve business goals. Organizations that depend on staff to achieve goals allocate resources to develop the employee skills needed to deliver results.

Human rights

Human rights are basic rights that should belong to all people. They include the right to life, liberty, free speech and freedom from slavery. The UN’s Universal Declaration of Human Rights (UDHR) is seen as the benchmark for these basic rights.

Hybrid vehicle/plug-in hybrid electric vehicle

A hybrid vehicle is primarily powered by a conventional internal combustion engine (ICE) but supplemented with power from regenerative braking.

A plug-in hybrid electric vehicle has a rechargeable battery that recharges when connected via a charging cable to an external electric power source, additional to internally by the vehicle’s ICE-powered generator.

Hydrogen (H2)

Hydrogen (H2) is the most abundant element in the universe. The Sun and stars are comprised mainly of hydrogen. It is a very light, colorless, odorless and tasteless gas, and can be an energy source.

It makes up less than 2% of current energy consumption in Europe and is mostly used for developing complex chemical products.

Hydrogen, when used as a fuel, produces only water and is an important element of the EU’s Energy System Integration Strategy.

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I

Impact investing/socially responsible investing

Impact investing, or socially responsible investing, concerns investments made to try to generate positive, measurable social and environmental impacts, alongside a financial return.

Impact investments can be made in emerging and developed markets, and target a range of returns, from below market to market rate, depending on the investor’s strategic goals.

The growing impact investment market provides capital to address the world’s most pressing challenges in sectors, such as sustainable agriculture, renewable energy, conservation, microfinance and affordable and accessible basic services like housing, healthcare and education.

Impact measurement

Impact measurement refers to measuring how organizations’ activities affect the world, positively and negatively.

Impact sourcing

An impact sourcing strategy directs employment and career development opportunities toward people from economically disadvantaged backgrounds.

Incineration/direct combustion

Incineration, or direct combustion, involves the controlled burning of municipal solid waste to reduce waste volume and produce energy.

Indirect emissions

The Greenhouse Gas Protocol (GHG Protocol) describes indirect emissions as scope 2 and 3 emissions. They are a consequence of an organization’s activities but are owned or controlled by another entity. Indirect emissions examples include purchased electricity, waste disposal and business travel.

Integrated reporting

Integrated reporting is an approach to corporate reporting that integrates financial and non-financial information, such as sustainability data, into a single document showing a company’s performance.

Intergovernmental Panel on Climate Change (IPCC)

The Intergovernmental Panel on Climate Change (IPCC) is a UN body for researching and advancing human-induced climate change knowledge. Established in 1988, the body comprises 195 member states and is headquartered in Geneva, Switzerland.

The IPCC assembles comprehensive assessment reports concerning the state of “scientific, technical and socioeconomic knowledge on climate change.” Each report has directly powered international climate change policymaking.

In 2007, the IPCC and former US Vice President Al Gore jointly received the Nobel Peace Prize “for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change.”

Internal carbon pricing

Internal carbon pricing is a corporate financial strategy where a business assigns a monetary value to its carbon emissions, usually as a price per ton of carbon dioxide (CO₂) emitted. This internal price guides decision-making across the organization, encouraging investments in cleaner, more efficient technologies and practices.

Internal carbon pricing helps organizations internalize the external costs of their carbon emissions, aligning business operations with broader sustainability goals and regulatory environments. This facilitates the reduction of a company’s carbon footprint and incentivizes innovation in low-carbon technologies.

International Standard on Assurance Engagements 3000 (ISAE 3000)

The International Standard on Assurance Engagements 3000 (ISAE 3000) is one of the dominant environmental, social and governance (ESG) assurance standards. ISAE 3000 underscores the importance of data quality, reporting procedures, controls and evidence-gathering processes.

Reasonable assurance engagements

The assurance provider must obtain sufficient evidence to form an opinion, like that of a financial statement audit. The assurance provider expresses an opinion, such as whether the sustainability report is complete and accurate, based on the identified criteria.

Limited assurance engagements

The assurance provider must obtain a meaningful level of assurance to form a conclusion, expressed as negative assurance in the assurance report.

ISO 14001 – environmental management systems

ISO 14001 applies to all organizations and the environmental aspects of their activities, products and services that can control or influence, from a life-cycle perspective. The standard specifies environmental management system (EMS) requirements to enhance your organization’s environmental performance. With ISO 14001, you can learn to systematically manage the environmental responsibilities that contribute to sustainability.

An EMS can provide value to the environment, your organization and interested parties. Consistent with your environmental policy, the benefits of an EMS include:

• Environmental performance enhancement
• Achievement of environmental objectives
• Fulfillment of compliance obligations
• Brand growth
• Risk avoidance
• Alignment with UN SDGs 1, 2, 3, 4, 6, 7, 8, 9, 12, 13, 14 and 15

ISO 14019 series – validate and verify sustainability information

ISO 14019 is the global standard for validating and verifying sustainability information. It comes in two parts.

ISO 14019-1 specifies the general principles and requirements for sustainability information validation and verification. It covers reporting environmental, social and governance (ESG) and other sustainability elements, and determining the categorization of quantitative and qualitative information. These principles and requirements contribute to the rules and procedures provided in validation/verification programs.

The document can form the basis for validation and verification activities that support other conformity assessment schemes.

ISO 14019-2 specifies the verification process requirements for quantitative and qualitative sustainability information, including reporting ESG and other sustainability aspects. The standard applies to the rules and procedures for carrying out verification by providing elements of a verification program, such as process, evidence-gathering activities and reporting.

The document addresses uncertainty in values and how to address these uncertainties. It also addresses primary and secondary data sources and how they relate to the strength of verification evidence.

The benefits include:

• Validate and verify sustainability information fairly, accurately and transparently, according to ISO 14019 requirements
• Meet the verification process requirements for quantitative and qualitative sustainability information
• Verify quantitative and qualitative information
• Expert support for the certification process
• Align with UN SDGs 1-16

ISO 14064-1 – quantify and report GHG emissions and removals

ISO 14064-1 specifies organization-level principles and requirements for quantifying and reporting greenhouse gas (GHG) emissions and removals. The international standard’s requirements cover the design, development, management, reporting and verification of an organization’s GHG inventory.

The ISO 14064 series is GHG program neutral. If a GHG program applies, that program’s requirements are additional to those of the ISO 14064 series.

The benefits include:

• Manage carbon risk exposure and identify improvement areas
• Prepare for future GHG legislation
• Increase efficiency and decrease costs through reduced energy consumption
• Enhance credibility by demonstrating environmental responsibility
• Engage and encourage employees to get involved in reduction efforts
• Align with UN SDGs 9 and 13

ISO 14067 – GHGs – carbon footprint of products

ISO 14067 specifies the principles, requirements and guidelines for quantifying and reporting the carbon footprint of a product (CFP) that are consistent with international life cycle assessment (LCA) standards, namely ISO 14040 and ISO 14044. The global standard is for partial CFP and applies to CFP studies, the results of which provide the basis for different applications.

ISO 14067 only addresses a single impact category – climate change. Carbon offsetting and communicating the CFP or partial CFP information are outside its scope. It does not assess any social, economic or other environmental aspects and impacts that potentially arise from a product’s life cycle.

Verification follows successful completion of an audit. The benefits include:

• Reliable and comparable parameters for organizations and consumers
• Improved efficiency across the value chain
• Reduced emissions when implementing targeted measures
• Transparent GHG quantification and reporting
• Help to implement other standards, such as ISO 14001 (environmental management systems)
• Consistency with other standards, such as ISO 14025 (environmental labels) and ISO 14044, among others
• Calculating your carbon footprint – the first step toward implementing an emissions reduction and offsetting strategy
• Alignment with UN SDG 13

ISO 14068-1 – climate change management, transition to net zero – part 1: carbon neutrality

ISO 14068-1 provides principles, requirements and guidance for achieving and demonstrating carbon neutrality. The global standard focuses on quantifying, reducing and offsetting carbon footprints, utilizing a hierarchical approach that prioritizes direct and indirect greenhouse gas (GHG) emission reductions and removal enhancements within the value chain over offsetting.

ISO 14068-1 is essential for entities committed to carbon neutrality, supporting sustainable development and the transition to low-GHG emission activities. It ensures that carbon neutrality efforts are true, fair, scientifically valid and transparent.

The international standard is built upon and replaces PAS 2060 (carbon neutrality), which will be withdrawn 24 months after the publication of ISO 14068-1.

Verification follows successful completion of an audit. The benefits include:

• Gain precise support in achieving genuine carbon neutrality
• Enhance credibility and trust in carbon neutrality claims
• Promote ambitions, science-based GHG emission reduction strategies
• Encourage a comprehensive value chain and life cycle approach to carbon management
• Align with UN SDGs 1-16

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J

Jurisdictional and landscape approaches

A jurisdictional approach aims to advance shared sustainability goals in landscapes defined by subnational governments’ administrative boundaries. Implementation needs a lot of government involvement compared to a landscape approach.

A landscape approach is a place-based management approach that sees stakeholders collaborating in a landscape to advance shared sustainability goals and build resilience.

It aims to reconcile and optimize social, economic and environmental goals across numerous economic sectors and land uses. Implementation is through land-use plans, policies, initiatives, long-term investments and other means.

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K

Kyoto Protocol

The Kyoto Protocol is an international treaty that initially saw 37 nations and the EU-15 commit to reducing their greenhouse gas (GHG) emissions based on scientific consensus. The treaty was adopted in Kyoto, Japan, in 1997 and was implemented eight years later in 2005.

The Kyoto Protocol, which currently has 192 parties committed, set a precedent for countries to act on the climate emergency. Its main mission was to control emissions of the main human-caused GHGs.

Its first commitment period ended in 2012 when a second commitment period, called the Doha Amendment, was agreed.

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L

Landfill

Landfill is the method of disposing of rubbish, also known as trash and garbage, by burying it underground.

Landscape and jurisdictional approaches

A landscape approach is a place-based management approach that sees stakeholders collaborating in a landscape to advance shared sustainability goals and build resilience.

It aims to reconcile and optimize social, economic and environmental goals across numerous economic sectors and land uses. Implementation is through land-use plans, policies, initiatives, long-term investments and other means.

A jurisdictional approach aims to advance shared sustainability goals in landscapes defined by subnational governments’ administrative boundaries. Implementation needs a lot of government involvement compared to a landscape approach.

Life cycle assessment (LCA)

Life cycle assessment (LCA) aims to measure the environmental impact of a product or service throughout its existence.

Localvore

A localvore is a person who only consumes food cultivated locally.

Long-term science-based targets

Long-term science-based targets are accomplished when decarbonization reaches over 90%, compared to baseline emissions, to achieve net zero by 2050, with residual targets addressed with neutralization.

Loss and damage

Loss and damage are climate change-related consequences that people cannot adapt to. This is either because the consequence is too severe or the impacted community cannot access the resources to adapt. Loss and damage result from sudden natural disasters, such as floods, or gradual change, such as desertification.

Low-carbon economy

A low-carbon economy releases minimal carbon into the atmosphere. This usually means adopting low-carbon power sources over fossil fuels.

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M

Marine Stewardship Council (MSC)

The Marine Stewardship Council (MSC) is a certification and eco-labeling program for sustainable seafood.

Materiality/materiality assessment

Materiality considers all aspects of a business that may affect opportunity and risk. Investors have conventionally focused on financial materiality because their primary interest has been the bottom line – profitability. But things are changing, investors and regulators are now interested in non-financial materiality.

Understanding a company’s environmental, social and governance (ESG) material risks has multiple advantages. It enables the reporting of non-financial issues to improve investment decisions and risk and opportunity assessment, enhancing stakeholder engagement and helping to future-proof a company against regulatory and legal changes.

A materiality assessment formally assesses stakeholders’ commitment to specific ESG issues and determines an organization’s ESG score. It identifies the impact of a certain issue on a company’s performance and market competitiveness.

Methane (CH₄)

Methane (CH₄) is a greenhouse gas (GHG) and its presence in the atmosphere affects our climate system and Earth’s temperature. It is a primary component of natural gas. Although carbon dioxide (CO₂) has a longer-lasting effect on our climate, CH₄ has a much greater global warming potential (GWP) than CO₂.

According to the Environmental Defense Fund, CH₄ accounts for at least a quarter of today’s global warming. Agriculture, principally through manure and gastroenteric releases, but also rice cultivation, is responsible for around 25% of CH₄ emissions, followed by the energy sector.

Microfinance

Microfinance is a source of financial services for individuals or small businesses without access to traditional banking services. It can be a sustainable way of alleviating poverty by empowering entrepreneurs to build businesses and support their families and communities.

Microgeneration/micro-energy

Microgeneration, or micro-energy, is the ability to produce energy on a small scale, e.g. a single wind turbine or home solar panels.

Microplastics

Microplastics are pieces of plastic, usually less than 5 mm long, found on land and water due to plastic pollution.

Mitigation hierarchy

The mitigation hierarchy states that decarbonization should always come before beyond value chain mitigation (BVCM) compensation and neutralization. Net zero is only achievable through deep emission cuts, at least 90% by 2050, after which residual emissions are addressed with neutralization.

Modern slavery

Modern slavery encompasses many forms, such as human trafficking and people born into slavery. There are various definitions, but all include aspects of control, involuntary actions and exploitation.

A modern slave might face violence or threats, be forced into inescapable debt, or have their passport taken away and face deportation. Many people have fallen into this trap trying to escape poverty or insecurity, improve their lives and support their families. Now, they cannot leave.

Monocropping

Monocropping is the agricultural practice of growing a single crop on the same land year after year. This does not include rotation through other crops or growing multiple crops on the same land, also known as polyculture.

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N

Naked packaging

Naked packaging refers to products sold without any packaging.

Nationally determined contributions (NDCs)

A nationally determined contribution (NDC) is a non-binding national plan outlining climate change mitigation, including greenhouse gas (GHG) emission reductions. Such plans also include policies and measures governments seek to introduce in response to climate change and to contribute to the Paris Agreement’s global targets.

Natural capital

Natural capital is the world’s assets, such as soil, air, water and living things.

Natural resources

Natural resources are raw materials or substances direct from nature, such as minerals, wood, water and fertile land. It also refers to materials we harvest, utilize and rely on.

Nature-based solutions

Nature-based solutions are inspired and supported by nature and may offer environmental, economic and social benefits while increasing resilience.

They can be actions to protect, conserve, restore, sustainably use and manage natural or modified terrestrial, freshwater, coastal and marine ecosystems. Such actions address social, economic and environmental challenges effectively and adaptively while providing human well-being, ecosystem services and resilience and biodiversity benefits.

Nature positive

Nature positive concerns behavior and actions that increase biodiversity and the number of species, rather than cause their decline.

Near-term science-based targets

Near-term science-based targets cover the next 5-10 years, halving emissions compared to a baseline year. This is the first reality check on an organization’s journey to net zero by 2050.

Negative screening

Negative screening aims to identify organizations that engage in bad practices, such as arms dealing and cigarette production.

Net zero/net-zero

Net zero, also net-zero, concerns the balance between emitting and absorbing carbon in the atmosphere. It ultimately means cutting greenhouse gas (GHG) emissions to as close to zero as possible, with remaining emissions reabsorbed from the atmosphere by forests and oceans, etc.

Net zero is achieved when an organization eliminates all possible carbon emissions and compensates for remaining emissions with beyond value chain mitigation (BVCM). The net-zero process begins with calculating scopes 1, 2 and 3, agreeing on science-based targets, developing decarbonization pathways until 2030 and gradually moving toward long-term carbon capture, storage and sequestration for emissions that cannot be decreased.

Net Zero Asset Managers (NZAM)

Net Zero Asset Managers (NZAM) is an international group of asset managers dedicated to supporting the net-zero emissions by 2050 (or sooner) goal, aligning with global efforts to limit warming to 1.5°C. It also supports investments aligned with net-zero emissions by 2050 (or sooner).

Net-zero water

The net-zero water approach sees a building or community only use the water that falls on-site. Net-zero water aims to limit the consumption of water resources before returning it to the same source.

Neutralization/carbon dioxide (CO₂) removal (CDR)

Neutralization, or carbon dioxide (CO₂) removal (CDR), concerns removing carbon from the atmosphere and its permanent storage. Projects include direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS).

Nitrous oxide (N₂O)

Nitrous oxide (N₂O), colloquially called laughing gas, contributes to the greenhouse effect.

Further to natural sources, agriculture and fertilizers produce N₂O. Around 40% of N₂O emissions globally come from human activities. The Intergovernmental Panel on Climate Change (IPCC) has calculated that N₂O comprises about 6% of all GHG emissions, and its emissions rose 30% in the past 40 years.

Non-Financial Reporting Directive (NFRD)

The EU’s Non-Financial Reporting Directive (NFRD), or Directive 2014/95/EU, outlines the regulation for larger companies around disclosing non-financial and diversity information. The directive helps investors, consumers, policymakers and others gauge a company's non-financial performance.

The NFRD was a step in the right direction, but is largely considered inadequate and replaceable. The NFRD has been particularly criticized because it implies that environmental, social and governance (ESG) have no financial relevance.

The EU’s Corporate Sustainability Reporting Directive (CSRD) entered into force on January 5, 2023, and will replace the NFRD.

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O

Offsetting

Offsetting entails reducing or removing carbon dioxide (CO₂) or other greenhouse gas (GHG) emissions to compensate for emissions made elsewhere. Such action allows organizations and individuals to invest in quantifiable environmental projects to balance their carbon emissions. It is part of corporate sustainability strategies that aim to reach net zero when it complements a decarbonization strategy. Offsetting technologies include carbon capture and reforestation.

Organic

Organic is a blanket term for anything that is or was a living organism. It is also an item that does not use pesticides or fertilizers, or usually have genetically modified ingredients.

Ozone (O₃)

Ozone (O₃) is a pale blue gas with three oxygen atoms that is present in different layers of our atmosphere. Generally, O₃ is not emitted into the air directly, but develops at ground level through a chemical reaction.

Ozone layer depletion does not cause global warming, but it can harm human health. The Stock Resilience Centre defines it as one of Earth’s boundaries. According to NASA, ozone layer negative shifts are offset by positive changes in human behavior that allow the ozone layer to reform.

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P

Packaging waste recovery notes (PRN) and packaging waste export recovery notes (PERN)

Packaging waste recovery notes (PRN) and packaging waste export recovery notes (PERN) are the only legal forms to demonstrate that a producer is conducting the required amount of recovery and recycling.

Paris Agreement/Paris Climate Agreement

The Paris Agreement, or Paris Climate Agreement, is a legally binding, international climate change treaty. The aim is to limit global warming to well below 2°C above pre-industrial levels (1850-1900), preferably below 1.5°C, by the end of the century. The agreement was adopted by 196 nations at the UN’s COP21 in Paris in 2015. It came into force in 2016.

The Paris Agreement requests participating countries to act to reduce greenhouse gas (GHG) emissions. These commitments are called nationally determined contributions (NDCs). It covers climate change mitigation, adaptation and finance. Within the agreement, countries developed an enhanced transparency framework (ETF) to report transparently and track progress on the actions taken.

Plasma arc heating

Plasma arc heating involves heating municipal solid waste to extreme temperatures (3,000-10,000°C) using a plasma arc. Energy is released by electrical discharge in an inert atmosphere. This converts the organic waste into hydrogen-rich gas and non-organic waste into an inert glassy residue.

Plug-in hybrid electric vehicle/hybrid vehicle

A plug-in hybrid electric vehicle has a rechargeable battery that recharges when connected via a charging cable to an external electric power source, additional to internally by the vehicle’s ICE-powered generator. A hybrid vehicle is primarily powered by a conventional internal combustion engine (ICE) but supplemented with power from regenerative braking.

Positive screening

Positive screening seeks to monitor an organization’s ethical performance by the good that it does.

Post-consumer

Post-consumer refers to something used by consumers before it is reprocessed into a new product.

Preservation

Preservation tries to keep something the same by preventing it from being damaged.

Product stewardship

Product stewardship sees companies take responsibility for the environmental impacts of the products they make, sell or buy. This involves all product life cycle stages, including end-of-life management.

Pyrolysis

Pyrolysis is the action of heating waste to high temperatures to break down carbon content. This is through the absence of air to a mixture of gaseous and liquid fuels and solid residue. One example is the conversion of wood to charcoal.

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R

Rainforest Alliance

The Rainforest Alliance works to conserve biodiversity and ensure sustainable livelihoods by transforming land use, business practices and consumer behavior.

Rainwater harvesting

Rainwater harvesting sees stormwater that falls on buildings collected and stored for later use to avoid it going straight to the drainage system.

The most common systems concern:

• Irrigation use
• Indoor, non-potable use
• Whole house, potable use

Reclaimed

Reclaimed is the action of refurbishing waste materials for new products.

Recyclable

Recyclable refers to a product or material that can be collected, processed and manufactured into a new product.

Recycle/recycling

Recycling refers to collecting and processing waste materials, ideally to make new products. A common form is recycling aluminum cans, which are melted down and reshaped for different uses, rather than ending up in landfills. Recycling materials with toxic waste, such as electronics, is a little trickier.

Reduce/reducing

Reducing happens when an organization or person reduces harmful habits that produce waste.

Reforestation

Reforestation is the action of planting trees where a forest was depleted for commercial purposes.

Regeneration

Regeneration concerns improving ecological health and biodiversity through enabling, supporting and enhancing natural processes.

Remanufacture/remanufacturing

Remanufacturing is about rebuilding a product to its original specifications using a mix of reused, repaired and new parts.

Remineralize/remineralization

Remineralization aims to restore mineral content and resources to an environment.

Renewable energy

Renewable energy is typically electricity derived from natural, replenishable sources, such as geothermal, hydropower, solar and wind. Non-renewable resources, such as coal, oil and groundwater, have limited quantities.

Responsible innovation

Responsible innovation prioritizes ethics and social responsibility in researching, designing and producing new technologies or evolutions of existing technologies. Responsible innovation suggests that ethics is a design problem.

Restoration

Restoration is the act of assisting an ecosystem to recover to a previous, more biodiverse condition.

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Science Based Targets initiative (SBTi)

The Science Based Targets initiative (SBTi) promotes best practices and guidelines to decrease emissions and provides target-setting methods based on climate science.

The SBTi helps companies set carbon-reduction goals compliant with Paris Agreement targets. The initiative is a collaboration between the CDP (originally the Carbon Disclosure Project), UN Global Compact, World Resources Institute (WRI) and World Wide Fund for Nature (WWF). It is one of the We Mean Business Coalition commitments.

Scope 1-3 emissions

Scope 1-3 emissions are terms developed by the Greenhouse Gas Protocol (GHG Protocol). The levels allow organizations to categorize their emissions. Scope 3 has the most difficult emissions to track.

Scope 1 emissions

Scope 1 emissions are direct greenhouse gas (GHG) emissions released into the atmosphere from company-owned and controlled resources. Examples include on-site manufacturing and combustion, organization-owned fossil-fuel power plants and company fleet emissions.

Scope 2 emissions

Scope 2 emissions are indirect greenhouse gas (GHG) emissions released into the atmosphere from purchased energy from a utility provider. They include all GHG emissions from consuming purchased electricity, steam, heat and cooling. Investing in renewable energy sources could lower these emissions.

Scope 3 emissions

Scope 3 emissions, or value chain emissions, are indirect emissions from the reporting company’s upstream and downstream supply chain. There are 15 categories, including business travel, waste disposal and purchased goods and services.

Scope 4 emissions

Scope 4 emissions, commonly referred to as “avoided emissions”, are greenhouse gas (GHG) reductions occurring outside a product’s life cycle or value chain, but directly using that product.

Coined by the World Resources Institute (WRI) in 2013, the term extends carbon accounting’s scope beyond the direct and indirect emissions from operations (covered by scope 1-3) to include the positive impacts of products and services in reducing emissions elsewhere. For example, if an organization produces an energy-efficient appliance, emissions saved by consumer use, instead of a less efficient model, would fall under scope 4.

Secondary recovered fuel

Secondary recovered fuel involves recovering energy from waste that cannot realistically be reused or recycled from mechanical and biological treatment processes.

SGS CSRD services

Whatever your Corporate Sustainability Reporting Directive (CSRD) maturity level, we consider the timeline and resources needed to achieve your CSRD goals, including the highest-quality disclosures and reports.

Introduction to CSRD Fundamentals

Watch our on-demand webinar introducing the CSRD features, European Sustainability Reporting Standards (ESRS), double materiality and how they apply to an organization.

CSRD Advisory

Whether you are taking your first steps or are further along your CSRD journey, we offer customized support and advice, identifying the best approach and services to accomplish your sustainable disclosure and assurance goals.

CSRD Training

Our training covers the CSRD and ESRS. From introductory to topic-specific levels, we help you improve sustainability skills, performance and compliance, mitigating operational and reputational risks.

CSRD Double Materiality

Your organization must disclose its impact on the environment and people, and how they could affect your organization going forward. You must also disclose how sustainability-related developments and events create risks and opportunities for your organization. If you are a new reporter/discloser, we can take you through the entire double materiality process, aligned with the ESRS requirements.

CSRD Gap Analysis

We assess your organization’s disclosure gaps between present ESG reporting standards and those of the CSRD. We can then formalize the focus areas before presenting a road map of how to move toward CSRD-compliant disclosure.

CSRD Assurance

CSRD compliance requires accurate and consistent reporting that is subject to external assurance. We provide independent, third-party verification of ESG information and sustainability report assurance for disclosures at limited and reasonable levels.

SGS ESG services

Whether you are starting your environmental, social and governance (ESG) journey or are well-versed and looking for objectivity and independent verification, we have a service for you.

ESG Training

Whether you are new to ESG or clearly understand what you wish to achieve, SGS Academy’s ESG courses help you get started or enhance your journey.

ESG Health Check

Get a snapshot and quick evaluation of where you are on your ESG journey, to understand your ESG performance and prepare for improvements.

ESG Gap Analysis

Organizations implementing ESG strategies must understand their ESG performance in full for continuous improvement. ESG Gap Analysis can help you continuously meet your stakeholders’ ESG requirements and expectations.

ESG Disclosures and Sustainability Report Assurance (SRA)

Disclosing and reporting your ESG performance demonstrates your commitment to sustainability. ESG Disclosures and SRA provide third-party verification of ESG information for a more consistent and accurate disclosure.

ESG KPI Verification and Assurance

Organizations implementing ESG strategies must measure their ESG KPIs for compliance and due diligence purposes. ESG KPI Verification and Assurance can help you validate the metrics and targets set, as part of your KPI disclosures, even helping to reduce your borrowing cost through sustainability-linked finance.

ESG Certification

Make ESG the cornerstone of the way you do business, showing your commitment to sustainability. Our audit follows international and local ESG standards, regulations and relevant management systems.

SGS ISO 14000 series services

As the world’s leading testing, inspection and certification company, we specialize in many standards, including the ISO 14000 environmental series. This includes the head of the family – ISO 14001 – and new baby – ISO 14068-1.

ISO 14001 – environmental management systems

ISO 14001 applies to all organizations and the environmental aspects of their activities, products and services that can control or influence, from a life-cycle perspective.

The standard specifies environmental management system (EMS) requirements to enhance your organization’s environmental performance. With ISO 14001, you can learn to systematically manage the environmental responsibilities that contribute to sustainability.

An EMS can provide value to the environment, your organization and interested parties. Consistent with your environmental policy, the benefits of an EMS include:

• Environmental performance enhancement
• Achievement of environmental objectives
• Fulfillment of compliance obligations
• Brand growth
• Risk avoidance
• Alignment with UN SDGs 1, 2, 3, 4, 6, 7, 8, 9, 12, 13, 14 and 15

ISO 14019 series – validate and verify sustainability information

ISO 14019 is the global standard for validating and verifying sustainability information. It comes in two parts. ISO 14019-1 specifies the general principles and requirements for sustainability information validation and verification. It covers reporting environmental, social and governance (ESG) and other sustainability elements, and determining the categorization of quantitative and qualitative information.

These principles and requirements contribute to the rules and procedures provided in validation/verification programs. The document can form the basis for validation and verification activities that support other conformity assessment schemes.

ISO 14019-2 specifies the verification process requirements for quantitative and qualitative sustainability information, including reporting ESG and other sustainability aspects. The standard applies to the rules and procedures for carrying out verification by providing elements of a verification program, such as process, evidence-gathering activities and reporting.

The document addresses uncertainty in values and how to address these uncertainties. It also addresses primary and secondary data sources and how they relate to the strength of verification evidence.

The benefits include:

• Validate and verify sustainability information fairly, accurately and transparently, according to ISO 14019 requirements
• Meet the verification process requirements for quantitative and qualitative sustainability information
• Verify quantitative and qualitative information
• Expert support for the certification process
• Align with UN SDGs 1-16

ISO 14064-1 – quantify and report GHG emissions and removals

ISO 14064-1 specifies organization-level principles and requirements for quantifying and reporting greenhouse gas (GHG) emissions and removals. The international standard’s requirements cover the design, development, management, reporting and verification of an organization’s GHG inventory.

The ISO 14064 series is GHG program neutral. If a GHG program applies, that program’s requirements are additional to those of the ISO 14064 series.

The benefits include:

• Manage carbon risk exposure and identify improvement areas
• Prepare for future GHG legislation
• Increase efficiency and decrease costs through reduced energy consumption
• Enhance credibility by demonstrating environmental responsibility
• Engage and encourage employees to get involved in reduction efforts
• Align with UN SDGs 9 and 13

ISO 14067 – GHGs – carbon footprint of products

ISO 14067 specifies the principles, requirements and guidelines for quantifying and reporting the carbon footprint of a product (CFP) that are consistent with international life cycle assessment (LCA) standards, namely ISO 14040 and ISO 14044. The global standard is for partial CFP and applies to CFP studies, the results of which provide the basis for different applications.

ISO 14067 only addresses a single impact category – climate change. Carbon offsetting and communicating the CFP or partial CFP information are outside its scope. It does not assess any social, economic or other environmental aspects and impacts that potentially arise from a product’s life cycle.

Verification follows successful completion of an audit. The benefits include:

• Reliable and comparable parameters for organizations and consumers
• Improved efficiency across the value chain
• Reduced emissions when implementing targeted measures
• Transparent GHG quantification and reporting
• Help to implement other standards, such as ISO 14001 (environmental management systems)
• Consistency with other standards, such as ISO 14025 (environmental labels) and ISO 14044, among others
• Calculating your carbon footprint – the first step toward implementing an emissions reduction and offsetting strategy
• Alignment with UN SDG 13

ISO 14068-1 – climate change management, transition to net zero – part 1: carbon neutrality

ISO 14068-1 provides principles, requirements and guidance for achieving and demonstrating carbon neutrality. The global standard focuses on quantifying, reducing and offsetting carbon footprints, utilizing a hierarchical approach that prioritizes direct and indirect greenhouse gas (GHG) emission reductions and removal enhancements within the value chain over offsetting.

ISO 14068-1 is essential for entities committed to carbon neutrality, supporting sustainable development and the transition to low-GHG emission activities. It ensures that carbon neutrality efforts are true, fair, scientifically valid and transparent.

The international standard is built upon and replaces PAS 2060 (carbon neutrality), which will be withdrawn 24 months after the publication of ISO 14068-1.

Verification follows successful completion of an audit. The benefits include:

• Gain precise support in achieving genuine carbon neutrality
• Enhance credibility and trust in carbon neutrality claims
• Promote ambitions, science-based GHG emission reduction strategies
• Encourage a comprehensive value chain and life cycle approach to carbon management
• Align with UN SDGs 1-16

SGS Sustainability Assurance

30+ years of sustainability experience

We have been a leader in sustainability and ESG services for over 30 years. With expertise in all major industries, we understand each sector’s pain points and have the technical expertise and logistical capabilities to ensure realistic sustainability outcomes.

Our Sustainability Assurance services include environmental, social and governance (ESG) and Corporate Sustainability Reporting Directive (CSRD) solutions, as well as key ISO 14k family members. Our portfolio is constantly evolving to meet new sustainability challenges and we can let you know about any new services.

Global technical expertise and network

With a vast global network of experts and facilities, we offer high-level support to clients addressing local, national and international sustainability risks. Our experts offer comprehensive technical support while understanding the local language, standards and customs, making it easier for companies to facilitate local and global projects.

Consistency of service and execution

We deliver consistent results with excellent customer service and support. Our clients receive end-to-end support, from contract to report, and gain peace of mind through services delivered with integrity.

Services portfolio

Integrated solutions allow us to operate as a single vendor, covering all client types and sustainability areas. Our holistic service packages are tailored to meet your needs and not general industry demands.

Shared value

Shared value is a management principle that seeks market opportunities for organizations to solve social problems. “Creating shared value” was first introduced in the Harvard Business Review in 2011, based on the principle that a company’s competitiveness and the health of its related communities are mutually dependent.

Sharing economy

A sharing economy is a system whereby consumers share access to products or services, rather than having individual ownership. Examples include Airbnb, which matches people with a place or space to rent with those looking for a place to stay.

Sin stocks

Sin stocks are investments associated with unethical or immoral activities according to an investor’s personal opinions. Activities may include alcohol, gambling, tobacco or adult entertainment.

Single use/single-use

Single use, sometimes single-use, refers to something, such as a product, that can only be used once before discarding.

Social bonds

A social bond sees proceeds specifically fund new and existing projects with social benefits like affordable housing and healthcare.

Social capital

Social capital is the combined value of all social networks, the societal links and shared values enabling individuals and groups to work together.

Social enterprise

A social enterprise is a for-profit organization with a core business model linked to a social cause. Profits are often reinvested into the business or related communities. Examples of causes include tackling social problems and improving communities and the environment.

Solar energy/solar panels

Solar energy is energy derived from the Sun. Solar panels absorb the Sun’s radiation. This energy is captured, stored and regenerated into the electricity grid.

Solar panels cover two areas of generation:

1. Solar thermal or solar water-heating panels for heating water
2. Solar electric for producing electricity, also known as photovoltaic (PV) systems, solar cells that convert light into electricity

Streamlined Energy and Carbon Reporting (SECR)

Streamlined Energy and Carbon Reporting (SECR) requires around 12,000 UK companies to disclose their energy and carbon emissions. The reporting framework encourages implementing energy-efficiency measures with economic and environmental benefits to support companies in cutting costs and carbon emissions while improving productivity. The reporting requirement has been in place since April 2019.

Supply chain sustainability

Supply chain sustainability is defined as embedding environmental, social and governance (ESG) considerations as raw materials are sourced, converted to products and delivered to market.

Supply chain traceability

Supply chain traceability identifies, tracks and traces materials and commodities, as well as verifies sustainability claims across the value chain.

Sustainability

Sustainability has multiple meanings. In 1987, the UN Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” In practice, sustainability aligns environmental protection, human well-being and economic development.

Sustainability is also a system’s ability to be maintained at a certain rate or level. Over time, the word has gained popularity with media and become a buzzword for numerous industries. For example, sustainable fashion, sustainable business growth and sustainable architecture.

Sustainability report assurance (SRA)

Sustainability report assurance (SRA) is vital because it creates trust in environmental, social and governance (ESG) reporting, boosting investor engagement. Verification against a recognized standard optimizes an ESG report’s value. Currently, the dominant assurance standards are:

• AccountAbility’s (AA) AA1000 Assurance Standard
• International Standard on Assurance Engagements 3000 (ISAE 3000)

AA1000 can be used for reporting and assurance, while ISAE 3000 primarily focuses on assurance procedures. We can support your assurance journey.

Sustainable business

Sustainable business refers to an organization that is economically viable, socially responsible and environmentally conscious.

Sustainable design

Sustainable design involves designing products, services and the built environment in keeping with sustainability’s principles.

Sustainable Finance Disclosure Regulation (SFDR)

The EU’s Sustainable Finance Disclosure Regulation (SFDR) came into effect in March 2021 to increase the transparency on sustainability among financial institutions and market participants. The SFDR applies to financial institutions, such as banks, insurers and asset managers, operating in the EU.

There are three main goals:

1. Improve disclosures so asset owners and retail clients can understand and compare financial products' sustainability characteristics
2. Ensure a level playing field within the EU, so European companies do not receive unfair competition from those outside the union
3. Counter greenwashing

Sustainable procurement

Sustainable procurement concerns the decisions when purchasing products and services that include social and environmental factors alongside price and quality.

Systems thinking

Systems thinking is problem-solving that sees “problems” as part of a wider, dynamic system. It is about understanding how things influence one another as part of a whole.

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T

Task Force on Climate-Related Financial Disclosures (TCFD)

The Task Force on Climate-Related Financial Disclosures (TCFD) was created by the Financial Stability Board (FSB) in 2015 to improve and increase reporting on climate-related financial information. Following the TCFD’s 2023 Status Report, upon FSB’s request, the TCFD was disbanded.

Thematic investing

Thematic investing is the practice of investing in organizations that align with a particular investment theme, such as renewable energy, education or healthcare innovations.

Tipping point/climate tipping point

A climate tipping point occurs when a slight change triggers a strongly nonlinear response in the internal dynamics of part of the climate system, qualitatively changing its future state.

Human-induced climate change could push several larger elements past their respective tipping points. Such elements include the Atlantic thermohaline circulation (THC), West Antarctic ice sheet, Greenland ice sheet, Amazon rainforest, boreal forests, West African monsoon, Indian summer monsoon and El Niño/Southern Oscillation (ENSO).

Traceability

Traceability is the ability to trace all processes, from procuring raw materials and production to consumption and disposal, to clarify when and where a product was produced and by whom.

Transition plan

A transition plan is a time-bound plan clearly outlining how an organization will achieve its strategy to pivot its existing assets, operations and business model to align with the latest and most ambitious climate science recommendations.

Triple bottom line (TBL)

The triple bottom line (TBL), coined by famous British management consultant John Elkington in 1994, describes companies’ separate but interdependent financial, social and environmental “bottom lines”.

It sees a business prioritize people, the planet and profit equally. Such businesses may encourage proper healthcare, health and well-being, emphasize sustainable practices in operations and tie in social causes. These companies also retain profits and perfectly show how business and the environment can work together.

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U

UN Framework Convention on Climate Change (UNFCCC)

The UN Framework Convention on Climate Change (UNFCCC) created an international environmental treaty to combat “dangerous human interference with the climate system”, partially through stabilizing greenhouse gases (GHGs) in the atmosphere. The treaty was signed by 154 nations during the UN Conference on Environment and Development (UNCED), also known as the Earth Summit, in Rio de Janeiro, Brazil. It came into force in 1994.

The Kyoto Protocol was the first implementation of measures under the UNFCCC. This protocol was substituted by the Paris Agreement, which came into effect in 2016.

UN Global Compact

The UN Global Compact is a voluntary pact that promotes responsible business through 10 universally accepted principles and encourages action that advances broader societal goals, such as the UN Sustainable Development Goals (SDGs).

UN Principles for Responsible Investing (PRI)

The UN Principles for Responsible Investing (PRI) contains six principles under which asset owners and managers voluntarily commit to incorporating environmental, social and governance (ESG) issues into investment processes, active ownership and reporting, and promotes responsible investing across the industry.

UN Sustainable Development Goals (SDGs)

The UN Sustainable Development Goals (SDGs) provide “a shared blueprint for peace and prosperity for people and the planet, now and into the future.” Established in 2015, the 17 SDGs are an urgent call for action by all UN member states and are intended to be accomplished by 2030.

The SDGs form the framework for improving the lives of populations around the world and mitigating the hazardous human effects of climate change. The SDGs are:

1. No poverty
2. Zero hunger
3. Good health and well-being
4. Quality education
5. Gender equality
6. Clean water and sanitation
7. Affordable and clean energy
8. Decent work and economic growth
9. Industry, innovation and infrastructure
10. Reduced inequalities
11. Sustainable cities and communities
12. Responsible consumption and production
13. Climate action
14. Life below water
15. Life on land
16. Peace, justice and strong institutions
17. Partnerships for the goals

UN Universal Declaration of Human Rights (UDHR)

The UN’s Universal Declaration of Human Rights (UDHR) is a milestone document in the history of human rights that defines the rights and freedoms of all people. Following World War II, the UN General Assembly adopted the UDHR on December 10, 1948, in Paris, France. It was drafted by representatives with various legal and cultural backgrounds.

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V

Value chain emissions

Value chain emissions, also known as scope 3 emissions, are the most significant part of many companies’ corporate carbon footprint (CCF). The Greenhouse Gas Protocol (GHG Protocol) separates scope 3 emissions into 15 categories, including business travel, waste disposal and purchased goods and services. Of course, not every category is relevant to each company.

Value proposition

A value proposition considers the consumer. The consumer value is derived from a product, service or organization. For example, using recycled materials is a value proposition for climate-conscious consumers.

Vegan/veganism

Vegan is a diet and lifestyle that avoids all animal-derived products.

Voluntary emission reductions (VER)

Voluntary emission reductions (VER) are made voluntarily without mandate. They usually originate from an organization’s will to proactively tackle climate change. The voluntary market functions outside the compliance market. Organizations and individuals wishing to offset with no regulatory obligation can use VER. The carbon credits from VER cannot be used to meet Kyoto Protocol-stated governmental compliance measures. 

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W

Waste stream

A waste stream is the complete flow of a specific domestic or industrial waste type through to recovery, recycling or disposal.

Water footprint

A water footprint is the total volume of freshwater used to produce goods and services consumed by an individual, community, nation or the planet.

Water scarcity

Water scarcity happens when all demands for water supply or quality cannot be met.

Water security

Water security involves providing safe access to adequate water quantity and quality for sustaining humans, protecting ecosystems and socioeconomic development. This helps prevent waterborne pollution and related disasters, as well as preserve ecosystems in a climate of peace and political stability (from UN Water). Decreased water security is a result of climate change.

Water self-sufficiency

Water self-sufficiency is the ratio of the internal water footprint to the country’s total water footprint. It indicates the national capability of supplying the water needed for producing the domestic demand for goods and services.

Weather

Weather concerns the atmosphere’s state at a particular place and time, including pressure, temperature, wind, humidity, rainfall and cloud cover. Weather differs from climate, which is all weather conditions for a particular location averaged over about 30 years.

Whitewashing

Whitewashing is when an organization covers up or glosses over scandalous information by subjectively representing information.

Wind energy

Wind energy comes from wind turbines. This renewable energy has grown in popularity, although it is not perfect because turbines are clunky, require tons of precious metal and hurt surrounding wildlife. That said, this clean energy is abundant and improvements are being made.

Wish-cycling

Wish-cycling is an aspirational approach to recycling without knowing if the material is recyclable, but expecting it to be properly dealt with.

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Z

Zero carbon

Zero carbon means that a product or service produces no carbon emissions. Renewables like wind and solar are considered zero carbon because they do not emit carbon when producing electricity. Where net zero refers to canceling or balancing carbon an organization produces, zero carbon refers to a product or service emitting no carbon dioxide equivalent (CO₂e). Net zero also means an activity releases net-zero carbon emissions into the atmosphere.

Zero waste

Zero waste refers to eliminating waste, not consuming new or recovering resources, and keeping products out of landfills and incinerators or being left on the ground/discarded in nature. The concept concerns managing products, packaging and materials responsibly to minimize environmental harm. Minimal waste is a more realistic expression because it is impossible to create zero waste.

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1,2,3

1.5°C target

1.5°C is the ambitious global average temperature target set by the Paris Agreement. This is compared with pre-industrial history (1850-1900). The international treaty and scientists agree that global temperatures must be well below 2°C, preferably below 1.5°C, to avoid climate change’s worst impacts. To achieve this long-term goal, countries and other entities must limit greenhouse gas (GHG) emissions as soon as possible to achieve a climate-neutral world by the mid-century.