101 terms defined — from carbon accounting to CSRD, BRSR to biodiversity, net zero to nature risk.
The AA1000 Assurance Standard (AA1000AS v3) is an internationally recognised framework for sustainability assurance developed by AccountAbility. It evaluates adherence to the AA1000 Accountability Principles: Inclusivity (stakeholder engagement), Materiality (identification…
ESG assurance is the independent examination and verification of sustainability data and disclosures by a qualified third party. Limited assurance (negative assurance — "nothing has come to our attention") is…
GHG verification is the independent assessment of an organisation's greenhouse gas emissions inventory or reduction claims by an accredited third party. Verification follows ISO 14064-3 requirements and is conducted by…
Carbon accounting is the systematic process of measuring, recording, and reporting an organisation's greenhouse gas emissions. It follows standardised methodologies — primarily the GHG Protocol Corporate Standard — to quantify…
Carbon Capture and Storage (CCS) involves capturing CO₂ from industrial sources or directly from the atmosphere (DACCS), transporting it, and storing it permanently in geological formations. CCUS (Carbon Capture, Utilisation,…
A carbon credit represents one metric tonne of CO₂ equivalent that has been reduced, avoided, or removed from the atmosphere. Credits are traded in compliance markets (EU ETS, UK ETS,…
A carbon footprint is the total amount of greenhouse gases (GHGs) generated by an individual, organisation, event, or product, expressed in carbon dioxide equivalents (CO₂e). It typically covers direct emissions…
Carbon leakage occurs when carbon pricing or climate regulation in one jurisdiction causes businesses to relocate production to countries with weaker or no carbon constraints, resulting in no net global…
A carbon market is a trading system where carbon credits or emission allowances are bought and sold. Compliance markets (EU ETS, UK ETS, India CCTS, NZ ETS) are government-regulated with…
Carbon neutrality means achieving net zero carbon dioxide emissions by balancing emissions released with an equivalent amount offset or absorbed. Unlike net zero (which requires deep emission reductions of 90%+),…
Carbon offsets are verified reductions or removals of greenhouse gas emissions used to compensate for emissions occurring elsewhere. Offset projects include reforestation, renewable energy, methane capture, and direct air capture.…
Carbon pricing assigns a monetary cost to greenhouse gas emissions, creating economic incentives for reduction. Two main mechanisms exist: carbon taxes (fixed price per tonne CO₂e) and emissions trading systems…
The EU Carbon Border Adjustment Mechanism is a trade policy that puts a carbon price on imports of carbon-intensive goods (cement, iron/steel, aluminium, fertilisers, electricity, hydrogen) entering the EU. From…
India's Carbon Credit Trading Scheme (CCTS) was established under the Energy Conservation Amendment Act 2022. It creates a compliance carbon market where designated consumers in 13 notified sectors receive carbon…
Climate action encompasses all efforts to reduce greenhouse gas emissions and adapt to the impacts of climate change. For corporates, this includes setting science-based targets, decarbonising operations, investing in renewable…
Climate adaptation is the process of adjusting to current or expected climate change and its effects. For organisations, it involves assessing physical climate risks (flooding, heat stress, water scarcity, storms),…
Climate risk encompasses the potential negative impacts of climate change on an organisation, categorised as physical risks (acute events like floods, storms; chronic shifts like sea-level rise, temperature increase) and…
Decarbonisation is the process of reducing carbon dioxide and other greenhouse gas emissions from energy systems, industrial processes, transport, and buildings. Strategies include transitioning to renewable energy, electrification, energy efficiency…
Embedded emissions (also called embodied emissions or grey emissions) are the total greenhouse gas emissions generated during the production, transport, and processing of a product or material before it reaches…
The energy transition is the global shift from fossil fuel-based energy systems to renewable and low-carbon sources. It encompasses the deployment of solar, wind, hydropower, green hydrogen, and energy storage;…
The EU Emissions Trading System is the world's first and largest cap-and-trade carbon market, covering approximately 40% of EU greenhouse gas emissions. It sets a declining cap on total emissions…
Greenhouse gases are atmospheric gases that trap heat and contribute to global warming. The Kyoto Protocol identifies seven GHGs: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons…
The GHG Protocol is the world's most widely used greenhouse gas accounting standard, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). It…
Green hydrogen is hydrogen produced through electrolysis of water using renewable electricity, resulting in zero direct carbon emissions. It is distinguished from grey hydrogen (natural gas reforming), blue hydrogen (gas…
An internal carbon price is a monetary value that companies assign to their greenhouse gas emissions internally to guide business decisions, investment appraisals, and risk management. Two models exist: a…
ISO 14064 is the international standard for GHG quantification, reporting, and verification. Part 1 specifies principles and requirements for organisation-level GHG inventories. Part 2 covers project-level quantification, monitoring, and reporting.…
MRV refers to the system of Monitoring, Reporting, and Verification used to track greenhouse gas emissions, emission reductions, and climate finance. Monitoring involves continuous or periodic data collection. Reporting converts…
Nationally Determined Contributions are climate action plans submitted by countries under the Paris Agreement, outlining their targets for greenhouse gas emission reductions and adaptation measures. NDCs are updated every five…
Negative emissions technologies (NETs) remove CO₂ from the atmosphere, achieving net negative emissions. Methods include Direct Air Carbon Capture and Storage (DACCS), Bioenergy with CCS (BECCS), enhanced weathering, ocean alkalinity…
Net zero means achieving a balance between greenhouse gas emissions produced and emissions removed from the atmosphere. Under the Science Based Targets initiative (SBTi) Net-Zero Standard, companies must reduce value…
The Paris Agreement is a legally binding international treaty on climate change adopted by 196 parties at COP21 in Paris (2015). Its goal is to limit global warming to well…
PAS 2060 is the British Standards Institution (BSI) specification for demonstrating carbon neutrality. It requires organisations to measure their carbon footprint (using GHG Protocol or ISO 14064), reduce emissions where…
Physical climate risks are the financial risks from the physical impacts of climate change. Acute risks include extreme weather events — cyclones, floods, heatwaves, droughts, and wildfires. Chronic risks include…
A Power Purchase Agreement (PPA) is a long-term contract between a renewable energy producer and a buyer (corporate or utility) for the purchase of electricity at an agreed price. PPAs…
Renewable energy is energy derived from natural sources that are replenished at a rate faster than they are consumed — solar, wind, hydropower, geothermal, and biomass. Renewable energy procurement is…
The Science Based Targets initiative (SBTi) is a partnership between CDP, UNGC, WRI, and WWF that defines best practice for science-based emissions reduction targets. SBTi provides methods for companies to…
Climate scenario analysis is a strategic planning tool that assesses how different climate futures (e.g., 1.5°C, 2°C, 3°C+ warming) could impact an organisation's strategy, operations, and finances. It evaluates physical…
Scope 1 emissions are direct greenhouse gas emissions from sources owned or controlled by an organisation. These include emissions from on-site fuel combustion (boilers, furnaces, vehicles), fugitive emissions from refrigerants…
Scope 2 emissions are indirect greenhouse gas emissions from purchased electricity, steam, heating, and cooling consumed by an organisation. They are reported using two methods: location-based (grid average emission factors)…
Scope 3 emissions are all indirect greenhouse gas emissions in a company's value chain, both upstream and downstream. The GHG Protocol defines 15 categories including purchased goods and services, business…
The GHG Protocol defines 15 categories of Scope 3 emissions: Upstream — (1) Purchased goods and services, (2) Capital goods, (3) Fuel and energy activities, (4) Upstream transportation, (5) Waste,…
Scope 3 screening is the process of identifying which of the 15 Scope 3 categories are relevant and material for an organisation. The GHG Protocol requires companies to quantify all…
The TCFD was established by the Financial Stability Board in 2015 to develop recommendations for climate-related financial disclosures. Its four-pillar framework — Governance, Strategy, Risk Management, and Metrics & Targets…
Transition risks are financial risks arising from the process of adjusting to a lower-carbon economy. They include policy risks (carbon taxes, emission caps, regulation), technology risks (disruptive clean technologies), market…
The UK Emissions Trading Scheme replaced the UK's participation in the EU ETS following Brexit, effective January 2021. It covers energy-intensive industries, power generation, and aviation within the UK, with…
The voluntary carbon market enables companies and individuals to purchase carbon credits to offset emissions on a voluntary basis, outside of compliance obligations. Major standards include Verra (VCS), Gold Standard,…
ESG stands for Environmental, Social, and Governance — three pillars used to evaluate an organisation's sustainability performance and ethical impact. Environmental criteria examine how a company impacts nature (emissions, waste,…
Greenwashing is the practice of making misleading or unsubstantiated claims about the environmental benefits of a product, service, or company practice. It ranges from vague language ("eco-friendly") to selective disclosure…
The 17 Sustainable Development Goals (SDGs) were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet, and ensure…
Stakeholder engagement is the systematic process of identifying, analysing, and involving individuals or groups who affect or are affected by an organisation's activities. In sustainability, this includes investors, employees, communities,…
Sustainability is the practice of meeting present needs without compromising the ability of future generations to meet their own needs, as defined by the Brundtland Commission (1987). In a corporate…
Air quality management involves monitoring, modelling, and controlling air pollutant emissions to protect human health and the environment. Key pollutants include particulate matter (PM₂.₅, PM₁₀), NOx, SOx, CO, O₃, and…
Biodiversity is the variety of life at genetic, species, and ecosystem levels. Corporate biodiversity risk is emerging as a material ESG issue alongside climate change. The Kunming-Montreal Global Biodiversity Framework…
Biodiversity Net Gain is a UK planning policy requirement (effective February 2024) mandating that developments deliver at least 10% net gain in biodiversity value compared to the pre-development baseline. Measured…
A circular economy is an economic model that eliminates waste and pollution, keeps products and materials in use at their highest value, and regenerates natural systems. It contrasts with the…
Environmental Impact Assessment is a systematic process for evaluating the potential environmental consequences of proposed projects, plans, or policies before implementation. EIA identifies impacts on air, water, soil, biodiversity, noise,…
Environmental Identification (ENVID) is a structured hazard identification process used primarily in the oil & gas and industrial sectors to systematically identify environmental aspects and potential impacts of a facility…
Environmental compliance is the conformance to environmental laws, regulations, permits, and standards governing an organisation's operations. In India, this includes Consent to Establish (CTE), Consent to Operate (CTO), Environmental Clearance…
Extended Producer Responsibility is a policy approach that makes producers responsible for the environmental impact of their products throughout the product lifecycle, including post-consumer waste management. In India, EPR applies…
Groundwater assessment involves the characterisation, monitoring, and modelling of subsurface water resources to evaluate quantity, quality, contamination risks, and sustainable yield. Techniques include hydrogeological surveys, monitoring well installation, aquifer testing,…
GSAS is a performance-based green building certification system developed by the Gulf Organisation for Research and Development (GORD) for the MENA region. It assesses buildings, infrastructure, parks, and districts across…
ISO 14001 is the international standard for Environmental Management Systems (EMS). It provides a framework for organisations to protect the environment, respond to changing environmental conditions, and fulfil compliance obligations.…
Life Cycle Assessment is a systematic methodology for evaluating the environmental impacts of a product, process, or service throughout its entire life cycle — from raw material extraction through manufacturing,…
Nature-related risks are financial risks arising from an organisation's dependencies and impacts on nature. Physical risks include ecosystem degradation, pollinator decline, water scarcity, and soil erosion. Transition risks include stricter…
Noise impact assessment evaluates the potential noise effects of proposed developments or industrial operations on surrounding communities and sensitive receptors. It involves baseline noise surveys, predictive modelling (using software like…
The Taskforce on Nature-related Financial Disclosures provides a risk management and disclosure framework for organisations to report and act on nature-related risks and opportunities. Modelled on the TCFD structure (Governance,…
Waste management encompasses the collection, transport, treatment, and disposal of waste materials, including hazardous waste. In an ESG context, it covers waste reduction, recycling, circular economy implementation, zero-waste-to-landfill targets, and…
Water stewardship is the responsible management of shared water resources through understanding and addressing water risks in the context of the wider catchment. It goes beyond operational water efficiency to…
The Equator Principles are a risk management framework adopted by financial institutions for determining, assessing, and managing environmental and social risk in project finance. Based on IFC Performance Standards and…
Green bonds are fixed-income instruments where proceeds are exclusively used to finance or refinance projects with environmental benefits — renewable energy, energy efficiency, clean transport, sustainable water management, or climate…
The EU Sustainable Finance Disclosure Regulation requires financial market participants and advisers to disclose how they integrate sustainability risks and consider adverse sustainability impacts. Products are classified as Article 6…
Stranded assets are assets that suffer unanticipated or premature write-downs, devaluations, or conversion to liabilities due to the transition to a low-carbon economy. In the energy sector, this includes fossil…
Sustainable finance refers to financial services and products that integrate ESG criteria into business and investment decisions. It encompasses green bonds, sustainability-linked loans, social bonds, transition finance, impact investing, and…
CDP operates the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. CDP manages three questionnaires: Climate Change, Water Security, and Forests. Companies receive…
Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. In the ESG context, it covers board composition and independence, executive compensation,…
The EU Corporate Sustainability Due Diligence Directive requires large companies to identify, prevent, mitigate, and account for adverse human rights and environmental impacts in their own operations, subsidiaries, and value…
Corporate Social Responsibility is a business model in which companies integrate social and environmental concerns into their operations and stakeholder interactions. In India, Section 135 of the Companies Act 2013…
ESG ratings are assessments of a company's environmental, social, and governance performance by specialised agencies. Major providers include MSCI, Sustainalytics (Morningstar), S&P Global (CSA), ISS ESG, CDP, and FTSE Russell.…
Human rights due diligence is the process by which companies identify, prevent, mitigate, and account for how they address their adverse human rights impacts. Based on the UN Guiding Principles…
The IFC Performance Standards are eight standards defining the responsibilities of IFC clients for managing their environmental and social risks: (1) Assessment and Management of E&S Risks, (2) Labour and…
A just transition ensures that the shift to a low-carbon economy is fair and inclusive, protecting workers, communities, and regions most affected by decarbonisation. It encompasses reskilling and retraining programmes,…
Modern slavery encompasses forced labour, human trafficking, debt bondage, and child labour. The UK Modern Slavery Act 2015, Australian Modern Slavery Act 2018, and EU CSDDD require companies to identify…
Social Impact Assessment (SIA) is the process of analysing, monitoring, and managing the social consequences of development projects, programmes, or policies. It covers involuntary resettlement, livelihood impacts, community health, cultural…
Supply chain ESG refers to the assessment and management of environmental, social, and governance risks across an organisation's value chain. This includes supplier screening, ESG audits, human rights due diligence,…
In sustainability, the value chain encompasses all activities and actors upstream (suppliers, raw materials, logistics) and downstream (distribution, product use, end-of-life) of an organisation's direct operations. Value chain assessment is…
Anti-greenwashing regulation encompasses laws and rules designed to prevent misleading environmental claims. Key regulations include the UK FCA Anti-Greenwashing Rule (November 2024), EU Green Claims Directive (proposed), Australian ASIC enforcement…
BRSR is India's mandatory sustainability reporting framework prescribed by SEBI for the top 1,000 listed companies by market capitalisation. It requires disclosure across nine principles of the National Guidelines on…
BRSR Core is a subset of SEBI's Business Responsibility and Sustainability Reporting framework consisting of key performance indicators that must be independently assured. It covers nine ESG attributes: GHG footprint,…
The EU Corporate Sustainability Reporting Directive replaces the Non-Financial Reporting Directive (NFRD) and dramatically expands mandatory sustainability reporting. It applies to ~50,000 companies including large EU companies, listed SMEs, and…
Double materiality is an approach to sustainability reporting that considers both financial materiality (how sustainability issues affect the company's financial performance) and impact materiality (how the company's activities affect the…
ESG reporting is the disclosure of environmental, social, and governance data by organisations to stakeholders including investors, regulators, customers, and employees. It has evolved from voluntary sustainability reports to mandatory…
The European Sustainability Reporting Standards are the detailed reporting standards underpinning the CSRD. Developed by EFRAG, they comprise 12 standards: 2 cross-cutting (ESRS 1 General Requirements, ESRS 2 General Disclosures),…
The EU Taxonomy is a classification system establishing a list of environmentally sustainable economic activities. It defines six environmental objectives: climate mitigation, climate adaptation, water, circular economy, pollution, and biodiversity.…
The Global Reporting Initiative provides the world's most widely used standards for sustainability impact reporting. GRI Standards are structured in three series: Universal Standards (GRI 1-3, including Materiality), Sector Standards…
IFRS S1 requires companies to disclose information about sustainability-related risks and opportunities that could reasonably be expected to affect an entity's cash flows, access to finance, or cost of capital…
IFRS S2 sets out requirements for disclosing climate-related risks, opportunities, and the entity's strategy for managing them. It requires Scope 1, 2, and 3 GHG emissions disclosure, climate scenario analysis,…
The ISSB was established by the IFRS Foundation in 2021 to develop a global baseline of sustainability disclosure standards for capital markets. IFRS S1 (General Sustainability Disclosures) and IFRS S2…
A materiality assessment identifies and prioritises the most significant ESG topics for an organisation and its stakeholders. Traditional financial materiality focuses on issues affecting enterprise value (ISSB approach). Impact materiality…
The Securities and Exchange Board of India is India's capital markets regulator. In the ESG context, SEBI mandates BRSR reporting for the top 1,000 listed companies, BRSR Core assurance requirements,…
Sustainability reporting is the practice of disclosing an organisation's environmental, social, and governance performance to stakeholders. It has evolved from voluntary CSR reports to mandatory regulatory filings under frameworks like…
The UK Sustainability Disclosure Requirements are the UK's framework for sustainability-related disclosures, based on ISSB Standards (IFRS S1 and S2). The FCA's anti-greenwashing rule (effective November 2024) requires all FCA-regulated…