Enter search criteria to either look for specific terms you want explained or look for a group of terms e.g using the word carbon will bring up several different terms to precisely cover different elements of carbon reporting and capture
NOTE : Many terms are Environment / climate change focused but the Knowledge base is being developed to cover all 3 ESG towers
| ESG Term | Summary | Content | Tags | Link |
|---|---|---|---|---|
| Affected Community | Affected community is defined in the draft European Sustainability Reporting Standards ESRS S1 Own Workforce asa group living or working in the same area that has been or may be affected by a reporting undertakings operations or through its value chain. | Affected community is defined in the draft European Sustainability Reporting Standards ESRS S1 Own Workforce asa group living or working in the same area that has been or may be affected by a reporting undertakings operations or through its value chain. The local community can range from those living adjacent to the organizations operations to those living at a distance | ||
| AGN | African group of negotiators - Collective group setup in 1995 to speak together at COP and other forums | Collective group setup in 1995 to speak together at COP and other forums | ||
| Bankers for Net Zero | Bankers for Net Zero (B4NZ) convenes the UK country chapter of the Net Zero Banking Alliance (NZBA) | Bankers for Net Zero (B4NZ) convenes the UK country chapter of the Net Zero Banking Alliance (NZBA), which is one of the four main pillars of the Glasgow Financial Alliance for Net Zero (GFANZ). | ||
| Biodiversity | Biodiversity or Biological diversity is defined by the Convention on Biological Diversity (CBD) as the variability among living organisms from all sources. Often used as a shorthand to refer to benefits of initiatives. | Biodiversity or Biological diversity is defined by the Convention on Biological Diversity (CBD) asthe variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part: this includes diversity within species, between species and of ecosystems | ||
| BPF | Blue planet Fund - UK government fund target to address Climate change impacts on marine environment on those that depend on our oceans. Fund seeks to work with others to increase overall impact supporting coatal countries. | Blue planet Fund seeks to work with others to increase overall impact supporting coatal countries. | ||
| Carbon intensity | Used as a metric to compare emissions performance | In finance, carbon emissions divided by revenues. Carbon intensity has a different meaning in the context of, for example, electricity generation. Used as a metric to compare emissions performance within a sector and at the portfolio level. | Investment-Term | |
| Carbon neutral | Net Zero - parity between emissons and offsets. Often used as shorthand to refer to benefits of an initiative | Achieving parity between emissions created and offsets . Carbon neutrality does not involve a commitment to reduce overall emissions. A business can achieve carbon neutrality even if the emissions it creates are increasing. In contrast, net zero is achieved by reducing the level of emissions a company creates with any residual amounts emitted matched by removal. | ||
| Carbon offsetting | Offsetting is used by companies to compensate for their emissions | Offsetting is used by companies to compensate for their emissions by paying others to reduce emissions or absorb CO2. Offsetting can be either via `emission reduction' e.g. funding the roll-out of clean energy technology or `carbon removal' e.g. planting forests to sequester carbon out of the atmosphere. Most offsets available today are emission reductions, which are necessary but not sufficient to achieve and maintain net zero in the long run. Carbon removals scrub carbon directly from the atmosphere which can counteract ongoing emissions after net zero is achieved, as well as create the possibility of net removal for those actors who choose to remove more carbon than they emit. Companies should first take all possible steps to reduce their own emissions before relying on offsets. | ||
| Carbon Pricing | Amethod to Price Emissions | Putting a price on emissions of greenhouse gases to "make the polluter pay" for the negative externality of pollution. The two most frequently used approaches are emissions trading schemes and carbon taxes. The former tend to be more impactful than the latter. The first mandatory emissions trading scheme came into being in 2002. The first carbon taxes were implemented in 1990. | ||
| Carbon Removal | Process to remove Carbon | The process of removing carbon dioxide from the atmosphere and storing it. Examples include nature-based solutions such as reforestation or capturing and storing carbon generated by an industrial process. | ||
| CBI | Climate Bonds Initiaitive - A not for profit workign to mobilis global capital for climate action | Climate Bonds Initiative (Climate Bonds) is an international not-for-profit organisation working to mobilise global capital for climate action. Climate Bonds has played a central role in transforming the green bond market from a niche concept to a mainstream source of capital for sustainable development, driving quality of issuance through the development of science-based green definitions in line with the Paris Agreement. Climate Bonds was created with a vision to mobilise institutional investors to counter the short-termism and vested interests that infect politics and finance and undermine action on climate change. With a mission to mobilise global capital for climate action, Climate Bonds aims to educate, inspire, convene, and steer a global collaboration of institutional investors, governments, development banks and industry to shift capital toward low-carbon and resilient investments. | Investment-Term | |
| CCC | TheتCommittee onتClimate Changeت(CCC) - UK government advisor | TheتCommitteeتonتClimate Changeت(CCC) advises the government on emissions targets and reports to Parliament on progress made in reducing greenhouse gases | ||
| CFREU | Charter of Fundamental Rights of the EU | The Charter of Fundamental Rights of the European Union (CFREU) is the EUs bill of rights. It always binds EU institutions and the Member States when they act within the scope of EU law. | ||
| Circular economy | An economic model | An economic model that aims to supplant the linear economic model by decoupling emissions from economic growth. Recycling, re-using, making better use of resources to keep materials in use rather than throwing them away and eliminating the vast amounts of waste created by the linear economic model are key elements of the approach. | ||
| Clean tech | Any technology that reduces or eliminates a pollutant, whether climate related or not | Any technology that reduces or eliminates a pollutant, whether climate related or not. Clean tech related to climate change includes technologies that use sustainable energy sources (such as wind, hydroelectric or solar power) and methods of increasing efficiency in existing systems (such as waste treatment or increasing electric grid efficiency). | ||
| Climate change | Term to summarise long term changes to global conditions including temperature and rainfall | Changes in average global conditions, such as temperature and rainfall, due to the accumulation of greenhouse gases in the Earth's atmosphere. Whilst natural factors such as solar activity, changes in the Earth's orbit and volcanic activity can influence the climate, human emissions and activities have caused close to 100% of the warming observed since 1950, according to the Intergovernmental Panel on Climate Change's fifth assessment report. | ||
| Climate Change Adaptation | EU Taxonomy term | One of the 5 objective of the EU taxonomy | ||
| Climate Change Mitigation | EU Taxonomy term | One of the 5 objective of the EU taxonomy | ||
| Climate transition | Transition to low carbon economy that reduces speed of climate change | The transition to a warmer, low carbon economy. Planning for this includes preparing for social changes resulting from the impact that policy, technology, market and reputational changes will have. | ||
| CO2 | Carbon Dioxide | The mass of greenhouse gas (normally consisting principally of CO2) created by an organisation or other entity. Other greenhouse gases such as nitrous oxide and methane are included, measured as the mass of CO2 equivalent. In a portfolio context, the value of shares held over company market cap, multiplied by total carbon emissions for the company to give emissions "owned." | ||
| CO2e (or CO2-eq) | A comparative measure to reflect different intensity of different greenhouse gases against Carbon DIoxide (Co2) | C02 equivalent. There are a number of greenhouse gases which warm the earth at different intensity levels such as water vapour (H20), carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrochlorofluorocarbons (HCFCs), ozone (O3), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). Rather than providing metrics for each gas they are converted into C02e for reporting. | ||
| Community Engagement | Frequently used term to cover approaches to corporate philanthropy, community development, local sourcing and local hiring | Frequently used term to cover approaches to corporate philanthropy, community development, local sourcing and local hiring | ||
| Community Impact Investing | Directing investment ot communities that are underserved by traditional fiancnial institutions | âCommunity Impact Investing†means directing investment capital to communities that are underserved by traditional financial services institutions. Such initiatives generally provide access to credit, equity, capital, and basic banking products that these communities would otherwise lack. | ||
| Community investment | Donations by organisations for community projects | Community investment includes cash donations, project costs and donations in kind (such as the cost of volunteering) to charitable organisations in a company's local areas. Aviva's community investment data is assured by PwC and reported annually in the annual report. | ||
| Controversies | A term use as issue of concern for investors when major ESG non compliance or failures identified. | Issues of concern for investors across environmental (e.g. oil spill), social (modern day slavery in supply chain), or governance (corruption) areas. As these issues tend not to be reported in official company releases many data providers monitor news outlets and provide controversy ratings for large corporate universes. | Investment-Term | |
| COP 28 | Most recent conference of UN Framework on climate change | The 28th conference held in Dubai in November/December 2023. The COP 28 summit brought together stakeholders to seek to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change. | ||
| Corporate governance | Systems and processes by which companies and and organisations are controlled | The systems and processes by which companies are controlled. Good corporate governance creates and maintains processes and controls to enable fair treatment of all key all stakeholders, including employees, shareholders, customers, supply chain and local communities. | ||
| Corruption | Corruption is defined by the World Bank as theuse of public office for private gainس, while Transparency International considers it asthe abuse of entrusted power for private gainس | Corruption is defined by the World Bank as theuse of public office for private gainس, while Transparency International considers it asthe abuse of entrusted power for private gainس and the Organisation of Economic Co-operation and Development (OCED) asthe abuse of public or private office for personal gain | ||
| CRDC | Climate resilant debt clauses | Climate Resilient Debt Clauses (CRDCs) are adopted by many development finance institutions (DFIs) and the private sector to align long term grants and loans to compliance obligations. | Investment-Term | |
| CSRD | Corporate Sustainability Reporting Directive - Expands sustainability reporting requirements for EU and non EU organisation enhancing consistency of sustainabiltiy reporting. | Evolved from the Non FInancial Reporting Directive. Diretive extends to all large companies over 250 employees and > 50 euros turnover with gradual increased scope and compliance since introduction in January 2023 with directive applying to fianncial years starting on or after 1st January 2024 | ||
| Decent work | ILO set standards to define decent working conditions | The International Labour Organisation defines decent work as involving opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organise and participate in the decisions that affect their lives and equality of opportunity and treatment for all women and men. | ||
| Derivative look-through | An approach to drill down on a derivative financial to assess risk and exposure | A look-through of constituents which make up a derivative financial instrument to validate compliance to ESG and frame risks for investors | Investment-Term | |
| Discrimination | Discrimination is defined by the International Labour Organization in the Discrimination (Employment and Occupation) Convention (C111) asany distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin. | Discrimination is defined by the International Labour Organization in the Discrimination (Employment and Occupation) Convention (C111) asany distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation. The draft European Sustainability Reporting Standards ESRS S1 Own workforce state thatDiscrimination can occur directly or indirectly - Direct discrimination will have occurred when an individual is treated less favourably by comparison to how others, who are in a similar situation, have been or would be treated, and the reason for this is a particular characteristic they hold, which falls under aprotected ground Indirect discrimination occurs when an apparently neutral rule disadvantages a person or a group sharing the same characteristics. It must be shown that a group is disadvantaged by a decision when compared to a comparator group | ||
| Diversity | Diversity is defined by the International Labour Organization asa commitment to recognizing and appreciating the variety of characteristics that make individuals unique in an atmosphere that embraces and celebrates individual and collective achievement. I | Diversity is defined by the International Labour Organization asa commitment to recognizing and appreciating the variety of characteristics that make individuals unique in an atmosphere that embraces and celebrates individual and collective achievement. Identity is dependent on much more than one dimension of a persons background. In recognizing and appreciating the many characteristics that make individuals unique in the world, diversity provides solutions to eliminate racial discrimination in the workplace The National Guidelines on Responsible Business | ||
| Diversity and Inclusion | Frequently used term to cover gender diversity, Ethnic and cultural diversity and to the evidencing of Inclusive workplace practices | Frequently used term to cover gender diversity, Ethnic and cultural diversity and to the evidencing of Inclusive workplace practices | ||
| Divestment | A decision to sell a stock as the leadership are not addressing ESG objectives or investors have lost confidence | Divestment is when shareholders sell a firm's shares. In an ESG context this can be because engagement has failed to influence the firm's behaviour to a satisfactory degree. | Investment-Term | |
| DNSH | Do No Significant Harm - Frequently used phrase to cover good practice relevant to treatment of workforce/community / environment | The DNSH principle entails assessing whether an investment in economic activity does not significantly harm environmental or social objectives | Investment-Term | |
| Double Bottom line | Extend traditional reporting to include solciall concious / ESG elements | âDouble Bottom Line†means the inclusion of both quantitative and qualitative analysis embraced by socially conscious investors, which extends the traditional bottom line measuring financial performance to include a âsecond†bottom line measuring non-financial performance measures, such as positive social impact. | ||
| Double Materiality | Double materiality is defined under the general requirements of the draft European Sustainability Reporting Standards ESRS 1 General Requirements as having both impact materiality and financial materiality, meaninga sustainability matter meets the criterion of double materiality if it is material from the impact perspective or the financial perspective or both. | Double materiality is defined under the general requirements of the draft European Sustainability Reporting Standards ESRS 1 General Requirements as having both impact materiality and financial materiality, meaninga sustainability matter meets the criterion of double materiality if it is material from the impact perspective or the financial perspective or both Draft ESRS 1 requires companies under the scope of the Corporate Sustainability Reporting Directive (CSRD) to report on sustainability matters based on the double materiality principle. See also impact materiality and financial materiality. Under the draft ESRS 1,Impact materiality and financial materiality assessments are inter-related and the interdependencies between these two dimensions shall be considered. In general, the starting point is the assessment of impacts. A sustainability impact may be financially material from inception or become financially material when it becomes investor relevant, including due to its present or likely effects on cash-flows, development, performance and position in the short-, medium-, or long-term time horizons. | ||
| EET - European ESG Template | European ESG Template | The European ESG Template (EET) is a data-exchange template, created by FinDatEx that will simplify the ESG data exchange process between financial market participants. This will both ease the process for financial market participants when exchanging ESG data, as well as facilitate compliance to the delegated acts complementing MiFID II (Markets in Financial Instruments Directive), and IDD (Insurance Distribution Directive). | Investment-Term | |
| Emissions trading scheme (ETS) | A trading system for emissions | The most common form of ETS is a "cap and trade" system. The government running the ETS provides industrial businesses with allowances which enable them to release a certain level of emissions. The EU Emissions Trading Scheme resulted in over 12,000 industrial sites across Europe having their emissions limited in this way. Allowances are tradable and each company must submit allowances equal to its emissions to the government. A less common structure is the "baseline and credit" approach, which sets an emissions limit for each business and awards tradeable credits to those whose emissions over the period in question are lower than their stated limit. | ||
| Employee Engagement | Frequently used term to reflect the active adoption of approaches to gain employee satisfaction and feedback , employee engagement , and proactivity in providing career development opportunities | Frequently used term to reflect the active adoption of approaches to gain employee satisfaction and feedback , employee engagement , and proactivity in providing career development opportunities | ||
| Equal remuneration | Equal remuneration is defined by International Labour Organization in the Equal Remuneration Convention (C100) comprising equal remuneration for men and women workers for work of equal value r | Equal remuneration is defined by International Labour Organization in the Equal Remuneration Convention (C100) comprising equal remuneration for men and women workers for work of equal value refers to rates of remuneration established without discrimination based on sex. Ethnic group is defined by the International Labour Organization asa group of people whose members identify with each other through such factors as common heritage, culture, ancestry, language, dialect, history, identity and geographic origin. It includes people from a range of backgrounds including indigenous and tribal peoples, people of African and Asian descent, Roma people and migrant worke | ||
| ESG | Three key elements of sustainability : Environment,Social,Governance | Three key aspects of sustainability. Environmental factors concern a company's stewardship of the environment. Social factors encapsulate a company's approach to dealing with employees, customers, companies in its supply chain and local communities. Governance deals with systems and processes by which companies are controlled, including executive compensation, risk management and internal controls. | ||
| ESMA | European Securities and Markets Authority | European Securities and Markets Authority | ||
| ESRS | European Sustainability ReportingStandards | European Sustainability ReportingStandards | ||
| Ethical investments | Basing investment decisions on a moral framework | Ethical investing refers to the practice of using one's moral principles as the initial filter for the selection of investable securities. Ethical investing gives the individual the power to allocate capital toward companies whose practices and values align with their personal beliefs. Common ethical criteria concern tobacco production and distribution, weapons manufacturing, alcohol production and distribution, gambling and pornography. | Investment-Term | |
| Ethical marketing and communication | Frequently used term to reflect honesty in advertising, transparent communication with stakeholders and ethical marketing strategies | Frequently used term to reflect honesty in advertising, transparent communication with stakeholders and ethical marketing strategies | ||
| EU Green taxonomy | EU Green Taxonomy - classification to help organisations align activities to 6 objectives to support transparency in reporting green investments | he EU taxonomy is a classification system ofenvironmentally sustainable economic activitiesس created to help investors make green investments with six environmental objectives To be taxonomy aligned, an activity must contribute to at least one objective and Do No Significant Harm (DNSH) to any of the others and meet minimum social safeguards From 2022, companies will need to report on the percentage of their overall turnover, CapEx and OpEx in FY'22 that is taxonomy eligible | ||
| EUFRA | EU agency for fundamental rights | the independent centre of reference and excellence for promoting and protecting human rights in the EU. We help make Europe a better place to live and work. We help defend the fundamental rights of all people living in the EU. | ||
| EUGBS | Green Bond Standard | Greeen Bond Standard green bonds play an important role in financing assets needed for the low-carbon transition. With the European Green Bond Standard, the EU is aiming to set a clear gold standard for green bonds. The Standard, which is voluntary, relies on the detailed criteria of the EU taxonomy to define green economic activities, ensures levels of transparency in line with market best practice and establishes supervision of companies carrying out pre- and post-issuance reviews at European level. | ||
| EU TAxonomy | A classification system that helps organisations idenitfy environmentally sustainable activities | EU Taxonomy is not a mandatory list is published by European but includes terms and definitites of activities that can be applied for all geographies. The taxonomy will be be updated and refined over time | ||
| Fair trade practices | Frequently used term to reflect fair pricing for goods and services wherever they are sourced from as well as ethical trading relationships | Frequently used term to reflect fair pricing for goods and services wherever they are sourced from as well as ethical trading relationships | ||
| Financial Materiality | Financial materiality, under the draft European Sustainability Reporting Standards ESRS 1 General Requirements,is an expansion of the scope of materiality used in the process of determining which information should be included in the undertakings financial statements | Financial materiality, under the draft European Sustainability Reporting Standards ESRS 1 General Requirements,is an expansion of the scope of materiality used in the process of determining which information should be included in the undertakings financial statements Draft ESRS 1 states thatA sustainability matter is material from a financial perspective if it triggers or may trigger material financial effects on the undertaking. This is the case when it generates or may generate risks or opportunities that have a material influence (or are likely to have a material influence) on the undertakings cash flows, development, performance, position, cost of capital or access to finance in the short-, medium- and long-term time horizons The International Sustainability Standards Board (ISSB) of the International Financial Reporting Standards (IFRS) Foundation states under [Draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information thatsustainability-related financial information is material if omitting, misstating or obscuring that information could reasonably be expected to influence decisions that the primary users of general purpose financial reporting make on the basis of that reporting, which provides information about a specific reporting entity Furthermore, GRI defines financial materiality asInformation on economic value creation at the level of the reporting company for the benefit of investors (shareholders) | ||
| FMP | Fixed Maturity Plans | Financial instrument with specific ESG obligations under SFDR | Investment-Term | |
| Forced labour | Forced labor is defined by the International Labour Organization in the Forced Labour Convention (C029) asall work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily | Forced labor is defined by the International Labour Organization in the Forced Labour Convention (C029) asall work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily The ILO explains that it refers to situations in which persons are coerced to work through the use of violence or intimidation, or by more subtle means such as manipulated debt, retention of identity papers or threats of denunciation to immigration authorities. | ||
| Fossil free | Business that does not involve coal gas and oil extractors | The fossil fuel economy does not only involve fossil fuel companies such as coal, oil and gas extractors. It includes companies that help sell and transport these fuels, as well as users of the fuel, either in its initial form or in the form of electricity generated with it. Fossil fuel free funds vary in their definitions, but generally have some way of screening out companies in key sectors. Exclusions might include thermal coal, unconventional oil and gas, arctic oil and gas, conventional oil and gas, oil-fired electricity generation, gas-fired electricity generation, as well as elements of the distribution chain including retail, equipment & services, petrochemicals, pipelines & transportation, refining and trading. | ||
| Freedom of Association | Freedom of association is defined by the International Labour Organization asthe right of workers and employers to form and join organizations of their own choosing. | Freedom of association is defined by the International Labour Organization asthe right of workers and employers to form and join organizations of their own choosing. | ||
| G20 | Forum of 20 biggest economies made up of 19 nations and the EU | The G20 represents c80% of world GDP 75% of global trade and 60% of worlds population | ||
| GAR | Green Asset Ratio | Green Asset Ratio | Investment-Term | |
| GBS | Green Bond Standard | Green Bond Standard | Investment-Term | |
| GIR | Green Investment Ratio | Green Investment Ratio | Investment-Term | |
| GKA | Green Knowledge Acquisition - Activities organisations do to routinely update their body of knowledge on low carbon/green approaches | Green Knowledge Acquisition - Activities organisations do to routinely update their body of knowledge on low carbon/green approaches | ||
| GKM | Green knowledge Management - Activities organisations undertake to provide repositories for information on low carbon approaches | Green knowledge Management - Activities organisations undertake to provide repositories for information on low carbon approaches including new ways or working and new technologies | ||
| Glasgow Fianancial Alliance for NEt Zero | Glasgow Financial Alliance for Net Zero | Glasgow Financial Alliance for Net ZeroChaired by Mark Carney, UN Special Envoy on Climate Action and Finance, the Alliance brings together over 550 firms in 50+ jurisdictions from the leading net zero initiatives across the financial system to accelerate the transition to net zero emissions by 2050. | https://icvcm.org/ | |
| Global Warming Potential | A tool to compare different greenhouse gases | From a climate science perspective global warming potential (GWP) was developed to enable a comparison of the warming impacts of different greenhouse gases. For example, CO2 has a GWP of 1, whereas methane's GWP is 24x (depending on timescales). At the asset manager level GWP has been adapted to align a company's historical and future emission trajectory (based on disclosed targets) to an implied temperature outcome. This can be aggregated up to the portfolio level to give the GWP of the portfolio. | ||
| GMI | Green Management Imformation - management and sharing of knowledge and insights on the green agenda | Green Management Imformation - management and sharing of knowledge and insights on the green agenda | ||
| Green bonds | Bonds exclusively used to fund green projects | Bonds where the proceeds are exclusively used to finance / re-finance green projects, as defined by the Green Bond Principles (GBP). Green bonds may be standard "use of proceeds" in nature, which gives bondholders recourse to the issuer's business and cashflows, or revenue / project bonds, which provide bondholders with recourse only to specific cash flows. | Investment-Term | |
| GCF | Green climate fund - largest dedicated fund - Potentially $20bn pledged | Setup in 2010 - over 200 projects authorised but likely to be running well behnd the total pledged amout | https://www.greenclimate.fund/ | |
| Green finance | Financial Investment or product including derivatives used to fund green initiatives | Any financial instrument or investment - including equity, debt or derivatives - used to finance projects and activities that deliver environmental benefits. | Investment-Term | |
| Greenhouse gases (GHG) | Gases that trap some of the head the earth radiates leading to a warmer planet | Gases including carbon dioxide, water and methane that trap some of the heat the earth radiates back out into space, leading to the earth being warmer than it otherwise would be - hence the term the "greenhouse effect." | ||
| Greenwashing | Falsely claiming green/ environmental benefits for an organisation or policy | Falsely claiming or exaggerating sustainable characteristics or environmental benefits provided by a fund, business practice or company. Regulation such as SFDR in Europe aims, in part, to combat greenwashing by promoting greater standardisation within ESG investing. "Rainbow Washing" is the same idea, with regards to use of the Sustainable Development Goals. | ||
| Grievance mechanism | Grievance mechanism is defined in the United Nations Guiding Principles (UNGPs) asany routinized, State-based or non-Statebased, judicial or non-judicial process through which grievances concerning business-related human rights abuse can be raised and remedy can be sought | Grievance mechanism is defined in the United Nations Guiding Principles (UNGPs) asany routinized, State-based or non-Statebased, judicial or non-judicial process through which grievances concerning business-related human rights abuse can be raised and remedy can be sought The UNGPs adds thateffective grievance mechanisms are legitimate, accessible, predictable, equitable, transparent, rights-compatible, and a source of continuous learning. In addition to these criteria, effective operational-level grievance mechanisms are also based on engagement and dialogue | ||
| GTAG | The Green Technical Advisory Group (GTAG) provides independent, non-binding advice to Government on the design and implementation of a UK Green Taxonomy. | he UK Green Taxonomy will provide a common framework, setting the bar for investments that can be defined as environmentally sustainable, helping to tackle ‘greenwashing’, improve understanding of environmental impact to help companies and investors make informed green choices, support investment in sustainable projects and boost efforts to tackle climate change. | https://www.greenfinanceinstitute.com/programmes/uk-green-taxonomy-gtag/ | |
| GTI | Green technology Innovation - Aligning processes and also products to more sustainable methods | Two subcategories : (1) innovation in green processes - making raw materials into usable products more efficient. It also aims to conserve natural resources, increase the use of renewable resources (2) innovation in a green product -reducing the environmental impact of the manufacturing process by incorporating renewable or non-toxic materials into existing products or developing entirely new ones | ||
| Harrasment | Harassment is defined by the International Labour Organization in its Violence and Harassment Convention (C190) asa range of unacceptable behaviours and practices, or threats thereof, whether a single occurrence or repeated, that aim at, result in, or are likely to result in physical, psychological, sexual or economic harm, and includes gender-based violence and harassment | Harassment is defined by the International Labour Organization in its Violence and Harassment Convention (C190) asa range of unacceptable behaviours and practices, or threats thereof, whether a single occurrence or repeated, that aim at, result in, or are likely to result in physical, psychological, sexual or economic harm, and includes gender-based violence and harassment The ILO also refers to gender-based violence and harassment which is directed at persons because of their sex or gender or affecting persons of a particular sex or gender disproportionately and includes sexual harassment. The draft European Sustainability Reporting Standards ESRS S1 Own Workforce details that harassment isa course of comments or actions that are unwelcome or should reasonably be known to be unwelcome, to the person towards whom they are addressed. Harassment occurs when one or more employees are deliberately abused, threatened and/or humiliated in circumstances relating to work. Harassment may be carried out by one or more employees, with the purpose or effect of violating the employees dignity, affecting [their] health and/or creating a hostile work environment The National Guidelines on Responsible Business Conduct (NGRBC) state that it is awide range of offensive behavior that is unwanted by the recipient and which the perpetuator knows is disturbing | ||
| Health | Health, in relation to work, is defined by the International Labour Organization in the Occupational Health and Safety Convention (C155) asnot merely the absence of disease or infirmity; it also includes the physical and mental elements affecting health which are directly related to safety and hygiene at work | Health, in relation to work, is defined by the International Labour Organization in the Occupational Health and Safety Convention (C155) asnot merely the absence of disease or infirmity; it also includes the physical and mental elements affecting health which are directly related to safety and hygiene at work | ||
| Human rights | Framework for human rights defined by United nations since 1948 | Human rights are a way to frame people-related issues, as defined by the UN global frameworks, starting with the Universal Declaration of Human Rights, adopted by the UN General Assembly in 1948. This is split into two international covenants: one on civil and political rights, ratified by 172 countries, and the other on economic, social, and cultural rights, ratified by 160 countries. | ||
| Human Rights Due diligence | A way for organisations to proactively manage protection of human rights | Human rights due diligence is defined by the Office of the United Nations High Commissioner for Human Rights (OHCHR) asa way for enterprises to proactively manage potential and actual adverse human rights impacts with which they are involved The definition includes four core components: (a) Identifying and assessing actual or potential adverse human rights impacts that the enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships; (b) Integrating findings from impact assessments across relevant company processes and taking appropriate action according to its involvement in the impact; (c) Tracking the effectiveness of measures and processes to address adverse human rights impacts in order to know if they are working d) Communicating on how impacts are being addressed and showing stakeholdersin particular affected stakeholdersthat there are adequate policies and processes in place The draft European Sustainability Reporting Standards ESRS 2 General, strategy, governance and materiality assessment defines it more simply asan ongoing risk management process that a reasonable and prudent undertaking needs to follow in order to identify, prevent, mitigate and account for how it addresses its adverse human rights impacts. It includes four key steps: assessing actual and potential human rights impacts; integrating and acting on the findings; tracking responses and how impacts are addressed | ||
| IC-VCM | Integrity Council on Voluntary Carbon Markets (IC-VCM) - Advocate to progress a voluntary market for carbon supporting climate change reduction initiatives | The Integrity Council for the Voluntary Carbon Market (Integrity Council) is an independent governance body for the voluntary carbon market. Our purpose is to ensure the voluntary carbon market accelerates a just transition to 1.5_C. Our Core Carbon Principles help identify high-integrity carbon credits and channel finance to climate solutions that are good for people and planet. | https://icvcm.org/ | |
| Impact investing | Investing in a targeted way to improve compliance or outcomes on targets such as ESG | Definitions of impact investing vary but in essence an impact investment or impact fund needs to meet three key criteria. Firstly, showing intentionality to have a positive impact. Secondly, identifying additionality to ensure the investment is adding a positive impact that wasn't there in the first place. Thirdly, measuring the impact both quantitatively and / or qualitatively. Historically impact investing has been predominantly done as philanthropic or early stage investment (venture capital or private equity) but impact investing is now growing into public markets. According to the Impact Management Project, a global network advocating for impact investing, any investment has an impact - positive or negative - and therefore impact investment analysis should be done across all portfolios. | Investment-Term | |
| Impact materiality | Impact materiality is defined under the draft European Sustainability Reporting Standards ESRS to cover w actual or potential, positive or negative impacts on people or the environment over the short-, medium- and longterm time horizons. | Impact materiality is defined under the draft European Sustainability Reporting Standards ESRS 1 General Requirements. The definition states:a sustainability matter is material from an impact perspective when it pertains to the undertakings material actual or potential, positive or negative impacts on people or the environment over the short-, medium- and longterm time horizons. A material sustainability matter from an impact perspective includes impacts caused or contributed to by the undertaking and impacts which are directly linked to the undertakings operations, products, and services through its business relationships GRI sets standards based on impact materiality, defining it asinformation on the reporting companys impact on the economy, environment and people for the benefit of multiple stakeholders, such as investors, employees, customers, suppliers and local communities Considering impact materiality, GRI 1: Foundation 2021 defines material topics as those representingthe organizations most significant impacts on the economy, environment, and people, including impacts on their human rights | ||
| Integration philosophy | A term to describe active investors working with organisations to transition to higher ESG credentials | A transition philosophy based on investing in companies whilst working with them to improving their ESG credentials (âturning brown to greenâ€) through stewardship activities whilst integrating ESG into the investment and risk-management processes. | Investment-Term | |
| Intergovernmental Panel on Climate Change (IPCC) | UN Body bringing together hundreds of scientists and experts to improve understanding and build action plans to address climate change | A UN body consisting of hundreds of the world's top climate scientists and related experts. The IPCC's work has in the past been approved by governments accounting for the majority of the Earth's population. | https://www.ipcc.ch/ | |
| International Platform for Climate Finance (IPCF) | A platform to provide comprehensive strategy to transition finance to support Paris agreement and subsequent initiatives | IPCF aims to progress a comprehensive strategy to transition finance to support the Paris Agreement and ensure that markets amplify - rather than undermine - global climate goals. | https://www.bio-leadership.org/international-platform-for-climate-finance | |
| Investment Exclusions | Removing specific stocks out of investors portfolio | Removing securities from a fund's investable universe due to their failing to meet certain criteria. To exclude a company in this way means engagement to try and improve features of concern has already been or is likely to be unsuccessful due to the very nature of the company's business being at odds with basic principles of sustainability. Exclusion lists often comprise companies that produce controversial weapons, firearms and tobacco. | Investment-Term | |
| Investor Escalation | Increasing action against an organisation to pressure for change | The process through which investors can apply increasing levels of pressure on companies. Takes place beyond initial engagement but prior to divestment. Escalation efforts must be credible, being seen as potential precursors to the ultimate sanction of divestment. | Investment-Term | |
| IPSF | International Platform on Sustainable Finance | International Platform on Sustainable Finance a forum for dialogue between policymakers, with the overall aim of increasing the amount of private capital being invested in environmentally sustainable investments, including through green taxonomies. | ||
| ISSB | International Sustainability Standards Board (ISSB) | International Sustainability Standards Board (ISSB)Independent private sector body established by the IFRS Foundation to develop and approve global sustainability reporting standards. | https://www.ifrs.org/groups/international-sustainability-standards-board/ | |
| Just transition | Addressing climate change should respect impacted workers and communities particularly in poorer countries to achieve a fairer transition. | A `just transition' for workers and communities as the world's economy responds to the threat of climate change was included as part of the 2015 Paris Agreement. While the shift to a low carbon economy will likely boost prosperity and create jobs, there will be transitional challenges. Environmental, social and governance (ESG) dimensions of responsible investment must be front of mind for investors for a fast and fair transition to take place. | ||
| Living wage | Wages that meet basic needs and provide some discretionary income | The Ethical Trading Initiative defines the living wage as a wage that is enough to meet basic needs and to provide some discretionary income. Over the last ten years many retailers and brands have made progress in getting their suppliers to pay their workers the prevailing minimum wage plus any other benefits they are entitled to. However, in many countries, government-set minimum wages fall far short of what many consider to be a living wage. In the UK There are over 7,000 Living Wage Employers, including 40 of the FTSE. | ||
| Lobbying | Lobbying or lobbying activities are defined in the draft European Sustainability Reporting Standards ESRS G1 Business conduct asactivities carried out with the objective of influencing the formulation or implementation of policy or legislation, or the decision-making processes of governments, governmental institutions, regulators, European Union institutions, bodies, offices and agencies or standard setters. | Lobbying or lobbying activities are defined in the draft European Sustainability Reporting Standards ESRS G1 Business conduct asactivities carried out with the objective of influencing the formulation or implementation of policy or legislation, or the decision-making processes of governments, governmental institutions, regulators, European Union institutions, bodies, offices and agencies or standard setters. Such activities include (non-exhaustive list): organising or participating in meetings, conferences, events; contributing to/participating in public consultations, hearings or other similar initiatives; organising communication campaigns, platforms, networks, grassroots initiatives; preparing/commissioning policy and position papers, opinion polls, surveys, open letters, research work as per the activities covered by transparency re | ||
| Macro stewardship | Working with governments or regulators to put financial markets or groups of organisations on more sustainable footing. | Engaging with governments, regulators and supranational organisations such as the UN with the aim of correcting market failures and mitigating systemic risks to put markets on a more sustainable footing. | Investment-Term | |
| Materiality | Materiality is defined by GRI understands asa key concept in the world of reportingfilter in the information that is or should be relevant to users. | Materiality is defined by GRI understands asa key concept in the world of reportingس, which isused tofilter in the information that is or should be relevant to users. Particular information is consideredmaterial - or relevantif it could influence the decision-making of stakeholders in respect of the reporting company Materiality for the purposes of sustainability reporting is divided into double materiality, financial materiality, and impact materiality. | ||
| Micro stewardship | Working directly with leadership of organisation to improve compliance and sustainability | See definition for active ownership. | Investment-Term | |
| Migrant for employment | Migrant for employment is defined by the International Labour Organization in its Migration for Employment Convention (C097) asa person who migrates from one country to another with a view to being employed otherwise than on his own account and includes any person regularly admitted as a migrant for employmentس | Migrant for employment is defined by the International Labour Organization in its Migration for Employment Convention (C097) asa person who migrates from one country to another with a view to being employed otherwise than on his own account and includes any person regularly admitted as a migrant for employmentس | ||
| Natural capital | World's stock of nautral assets | The world's stock of natural assets, including all living things, soil, air, water and geological assets. It is from this natural capital that humans derive a wide range of services (often called ecosystem services) which make human life possible (World Forum on Natural Capital). | ||
| Nature Market | Nature market : A mechanism for private investment in nature through the sale of units of ecosystem services | Nature marketA mechanism for private investment in nature through the sale of units of ecosystem services, which are delivered by nature restoration projects or improvements to land or coastal management. | ||
| Nature Positive | Nature positive can be taken to refer to an actor'scommitment to leave the natural environment in a better state than we found it | شnature positive can be taken to refer to an actor'scommitment to leave the natural environment in a better state than we found it, and ensure economic and financial decision-making is geared towards delivering that. | ||
| NBS | Nature-based solutions are an important aspect of the multi-pronged approach to fighting climate change. | Nature-based solutions are an important aspect of the multi-pronged approach to fighting climate change. They are any action that works to sustainably manage, restore, and protect natural ecosystems ر which in turn help build resilience to the impacts of climate change.These are solutions like restoring mangrove forests to help provide an effective natural barrier against coastal flooding, or massive tree-planting, restoring, and protection programmes to help ensure the worlds forests can effectively absorb carbon. Forests and land ecosystems are what is known as acarbon sinkس, helping to reduce carbon in the atmosphere, so many scientists advocaterewildingس ر letting natural ecosystems restore to their natural state ر to help the world recover. | ||
| NDC | Nationally Determined Contributions - Under the Paris Agreement, countries have to submit and maintain their plans to cut emissions ر theircontributionس to the global effort to tackle climate change. | Under the Paris Agreement, countries have to submit their plans to cut emissions ر theircontributionس to the global effort to tackle climate change.These plans detail when the country expects to reach peak emissions, and when they will reachnet zeroس and what that trajectory looks like. The NDCS are seen as a work in progress, and need to be updated every five years to reflect greater ambition, providing more targeted information about how each country plans to achieve net zero. | ||
| Negative emissions technologies | Technologies to remove carbon from atmosphere | Technologies that enable carbon to be removed from the atmosphere e.g. machines that capture carbon dioxide from the air and sequester it. | ||
| Net Zero Asset Managers Initiative | A group of asset managers with large investment portfolio working to limit global warming | A group of 128 asset managers, with USD43 trn in AU M, that is committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner. This is in line with global efforts to limit warming to 1.5 degrees Celsius and to supporting investing aligned with net zero emissions by 2050 or sooner. | Investment-Term | |
| Net Zero Asset Owner Alliance | A group of investors convened by UN committed to transitioning to Net zero by 2050 | A United Nations convened group of 42 institutional investors who have committed to transitioning their investment portfolios to Net Zero GHG emissions by 2050.. | Investment-Term | |
| Net Zero Emissions | Net zero emissons | Net zero emissionsNet zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage. | ||
| Net Zero target | A target for achieving net zero | Net zero is achieved by reducing the level of emissions a company or country creates with any residual amounts emitted matched by removal. An entity commits to make net zero carbon emissions by a specific date (often 2050), at which point having reduced emissions as much as possible, any carbon dioxide which continues to be released into the atmosphere is balanced by an at least equivalent amount being removed. | ||
| NGFS | The Network for Greening the Financial System is a network of 114 central banks and financial supervisors that aims to accelerate the scaling up of green finance and develop recommendations for central banks' role for climate change. The NGFS was created in 2017 and its secretariat is hosted by the Banque de France. | Network for Greening the Financial System (NGFS)A network of 121 central banks and financial supervisors that aims to accelerate the scaling up of green finance and develop recommendations for central banks role for climate change. The NGFS was created in 2017 and its secretariat is hosted by the Banque de France. | Investment-Term | https://www.ngfs.net/en |
| NGRBC | National Guidelines on Responsible business conduct - The national framework on Business Responsibility is essentially a set of nine principles that offer businesses an Indian understanding and approach to inculcating responsible business conduct. | The NVGs are unique, not just in what they represent, which is “an India specific comprehensive understanding of business responsibility”, but also in the way they have been formulated. The “process” was premised on widespread intensive stakeholder consultations to bring out the commonly agreed elements of business responsibility in keeping with India's unique developmental challenges and priorities. | ||
| Norms-based exclusions | Excluding an investment or organisation due to lack of compliance | Excluding securities from an investment universe due to a lack of compliance with established international standards, such as those comprising the UN Global Compact. | Investment-Term | |
| NZAFC | Net zero aligned Financial Centre framework - UK government initiative to help structure and mesure transition and green initiatives. | Three streams of work to encourage (1) transparency (2) Tools for transformation (3) Transmission channels | Investment-Term | https://www.gov.uk/government/publications/green-finance-strategy/mobilising-green-investment-2023-green-finance-strategy-annexes |
| NZBA | ndustry-led and UN-convened, the Net Zero Banking Alliance (NZBA) is a group of leading global banks committed to financing ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050. | ndustry-led and UN-convened, the Net Zero Banking Alliance (NZBA) is a group of leading global banks committed to financing ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050.NZBA is made up of more than 140 member banks of different sizes and business models operating in various jurisdictions and economies. NZBAs framework, guidance, and peer learning opportunities support members to design, set, and achieve credible science-based net zero targets for 2030 or sooner that deliver value for their investors, clients, and customers. NZBA is the climate accelerator for UNEP FIs Principles for Responsible Banking (PRB) and the sector-specific alliance for banks under the Glasgow Financial Alliance for Net Zero (GFANZ). | https://www.unepfi.org/net-zero-banking/ | |
| PAI | Principle Adverse Impact Indicators | The PAIs are an element of the EU’s SFDR and probably one of its most challenging aspects. Article 4 of the SFDR requires Fixed Maturity Plans (FMPs) to ensure transparency in terms of consideration of principal adverse impacts of investment decisions on sustainability factors. FMPs need to provide extensive disclosures on various ESG related matters including environmental and social indicators. They are subject to two types of disclosures: (1) entity level disclosures (Article 4 SFDR), which are based on a âcomply or explain†principle urging FMPs to indicate whether they consider the PAIs on sustainability factors of their investment and include a statement on their due diligence policies with respect to such impacts, and (2) product level disclosures (Article 7 SFDR) whereby FMPs have to disclose how each of their financial products considers such impacts in their pre-contractual disclosure documents. FMPs which do not consider PAI will be required to explain the reasons for that decision. | Investment-Term | |
| Paris Agreement | International Treaty in 2015 setting out targets to limit global warming | A breakthrough international treaty on climate change adopted at COP21 in Paris in 2015. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. The Paris Agreement was successful where other international accords failed partly due to adopting a system of voluntary pledges to reduce emissions. These Nationally Determined Contributions (NDCs) were a departure from the legally binding commitments of earlier treaties. Current NDCs put the world on a path to around 3 degrees above pre-industrial levels. However, key to the Paris Agreement is the "ratchet" mechanism, which calls for revised pledges every five years with the expectation that these will be increasingly ambitious. The first global stocktake will take place in 2023. Such "name and shame" approaches have been successfully used in international policy in the past. | ||
| Principles for responsible banking | Six principles for responsible banking | Six principles developed in coordination with united nations for bans to incorporate ESG and sustainability issues in their decision making | Investment-Term | |
| Principles for responsible investing | Six principles for responsible investing | âPrinciples for Responsible Investment†refers to the organization that established a set of guidelines in coordination with the United Nations for investors to incorporate ESG and sustainability issues in their decision-making and to seek disclosure from companies in which they invest. More information on the Principles for Responsible Investment is available on their webpage here. The six principles are: | Investment-Term | |
| Protection and restoration of biodiversity | EU Taxonomy term | One of the 5 objective of the EU taxonomy | ||
| PSF | Platform on Sustainable Finance - EU forum for encouraging more private capital being invested sustainably | Internaional Platform on Sustainable Finance - multilateral forum for dialogue between policy makers to help investors identify and seize sustainbale investment opportunities. Now has 20 + members representing 50%+ of world population and 54% of GDP | ||
| PUE | Power Usage Effectiveness | Power Useage Effectiveness | ||
| SBTI | Science based target initiative | SBTI or the Science Based Targets Initiative means the collaboration between CDP, the UNGC, World Resources Institute, and the World Wide Fund for Nature that requests for companies to create and publish targets to reduce greenhouse gas emissions in line with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures. | ||
| Science-Based Targets Initiative (SBTi) | UN,WRI and WWF agreed targets which is highly respected and commonly used measures for climate change impact assessment | The Science Based Targets initiative is a collaboration between the United Nations Global Compact, CDP (a global disclosure system), the World Resources Institute and the World-Wide Fund for Nature. The initiative is highly respected and defines and promotes best practice in science-based target pathway setting. Offering a range of target-setting resources and guidance to set science aligned targets for operations, supply chain and more recently investments, the SBTi independently assesses and approves companies' targets in line with its strict criteria. If a company's target is a `SBT', it means it meets credible standards for being a meaningful target in line with the Paris Agreement. | ||
| Scope 1, 2 and 3 emissions | Subset definition of greenhouse gases | Greenhouse gas emissions are categorised into three groups or `Scopes'. Scope 1 covers direct emissions e.g. burning of natural gas and company-owned vehicle emissions. Scope 2 covers indirect emissions from the generation of purchased electricity, steam and heating. Scope 3 includes 15 other categories of indirect emissions in a company's value chain, including use of a company's products by customers (highly relevant for fossil fuel producers), as well as emissions in the supply chain (highly relevant for food manufacturers). Scope 3 emissions are key for asset managers as this is where the impact of investments is accounted for. | ||
| Screening | Approach to filtering investments to include / exclude when managing a fund by validating sustainability achievements | Screening entails using filters to decide which securities are eligible (positive screening) or ineligible (negative screening) for inclusion in a fund. | Investment-Term | |
| SDG | Sustainable Development Goals - 17 goals and 160+ targets which summarise UN priorities to address a far reaching agenda on inceasing sustainabiltiy and eradicating extreme poverty and human right priorities | A powerful structure of objectives and targets evolved since 2015 which give aperspective for the UN and all its agencies to align their many initiatives. The structure also helps integrovernment, country specifc , business and charity initiatives align their initiatves. The targets give a way to measure progress but these are ambitous targets. The scope covers poverty,health,equality,climate change , biodiversity as well as peaceful societies and an overching target to achieve global partnership for sustainable development | ||
| SDR | Sustainability Disclosure Requirements - General term but particularly used to refer to EU requirements for enhanced reporting from 2024 | Sustainability Disclosure Requirements are evolved in different countries but within the EU there is upcoming requirements (CSRD) for organisations to disclose adverse impact is investment decisions on sustainability considering ESG risk in investment processes Provision of sustainability information on funds , bonds and other financial products | ||
| SFDR | Sustainable Finance Disclosure Regulation - EU regulation for invemstnet managers in UK to increase transparency of ESG considerations in investment products | within the EU there is upcoming requirements for larger organisations to report on ESG progress for financial years after Jan 2024 | Investment-Term | |
| SFEC | Sustainable Finance Education Charter | Sustainable Finance Education CharterBrings together many of the worlds leading professional bodies for the first time in a commitment to integrate green and sustainable finance principles into the education and training programmes of finance professionals worldwide. | ||
| SIDS | Small Island Developing States - Group of 50+ island nations that are vulnerable to rising sea levels caused by climate change. | Group of 50+ island nations that are vulnerable to rising sea levels caused by climate change. They also face threats from heavy rains, increased cyclones, and ocean acidification. Leaders from SIDS nations have been clear about the need for wealthy countries to keep their promises on tackling climate change. | Small Island DEveloping States | https://unfccc.int/resource/docs/publications/cc_sids.pdf |
| Social bonds | Focused bonds to finance / refinance social projects | Bonds where the proceeds are exclusively used to finance / re-finance social projects, as defined by the Social Bond Principles. | Investment-Term | |
| Social dialogue | Social dialogue is defined in the draft European Sustainability Reporting Standards ESRS S1 Own Workforce asall types of negotiation, consultation or simply exchange of information between, or among, representatives of governments, employers, their organisations and workers representatives, on issues of common interest relating to economic and social policy. It can exist as a tripartite process, with the government as an official party to the dialogue or it may consist of bipartite relations only between workers representatives and management (or trade unions / employers organisations. | Social dialogue is defined in the draft European Sustainability Reporting Standards ESRS S1 Own Workforce asall types of negotiation, consultation or simply exchange of information between, or among, representatives of governments, employers, their organisations and workers representatives, on issues of common interest relating to economic and social policy. It can exist as a tripartite process, with the government as an official party to the dialogue or it may consist of bipartite relations only between workers representatives and management (or trade unions / employers organisations. | ||
| Social infrastructure | infrastructure to support social services | The construction and maintenance of facilities that support social services such as healthcare, education and transportation. | ||
| Social Innovation | Term used to cover investment in innovative social solutions and collaboration with social enterprises | Term used to cover investment in innovative social solutions and collaboration with social enterprises. Reporting may include value and social impact provided through this area of business practice | ||
| Social Responsibility Reporting | Transparent reporting on social inititives includng metrics for social impact measurement and a commitment to social reporting as part of corporate reporting | Transparent reporting on social inititives includng metrics for social impact measurement and a commitment to social reporting as part of corporate reporting | ||
| Social taxonomy | Scheme of classification to define socially sustainable economic activities | A scheme of classification that establishes a list of socially sustainable economic activities. The European Commission formed a working group to explore building a Social Taxonomy, which has released a draft report. | ||
| SSEI | Sustainable stock exchange Initiative | âSSEI†means the Sustainable Stock Exchanges Initiative. The SSEI is a UN Partnership Programme intended to provide a global platform for exploring how exchanges, in collaboration with investors, companies, regulators, policymakers and relevant international organizations, can enhance performance on ESG issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSEI webpage is available here. | ||
| Stewardship | A standard to codify responsible allovation of resurces and management to create long term value by the leadership in an organisation | The UK Stewardship Code 2020 defines stewardship as "the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society." | Investment-Term | |
| Stranded assets | An asset that once had value but no longer does typically due to obsolescence or non copliance to sustainabiility objectives | A stranded asset is anything, e.g. a piece of equipment or a resource, that once had value or produced income but no longer does. This is usually due to some external change, including developments in technology, markets or societal habits. This is an issue of particular concern as regards climate change given that changing government regulations, increasing carbon prices, emerging clean technologies scaling up and becoming profitable without subsidies, litigation and evolving business and social norms can all lead to assets becoming stranded. Coal mines are a typical example of a stranded asset. | ||
| Supply chain Ethics | Frequently used term supplier labour practices, transparency of supply chain and ethical sourcing | Frequently used term supplier labour practices, transparency of supply chain and ethical sourcing | ||
| Sustainability | The UN define this a meeting needs of present without compromising the future | All activity that can be considered as taking account of profit, people and the planet (also known as the `triple bottom line' accounting). A more formal definition from the UN is "meeting the needs of the present without compromising the ability of future generations to meet their needs." | ||
| Sustainability bonds | Bonds where proceeds exclusively used to finance or refinance green or social projects | Bonds where the proceeds will be exclusively used to finance or re-finance a combination of green and social projects. These instruments are aligned with both the Green Bond Principles and the Social Bond Principles. | Investment-Term | |
| Sustainable Development Goals (SDGs) | 17 Goals set in 2015 to address environment and social issues | 17 global goals designed to be a "blueprint to achieve a better and more sustainable future for all." They were set in 2015 by the United Nations, cover mainly environmental and social issues and are meant to be achieved by 2030. Many firms use them to orient their initiatives on issues relating to sustainability. | https://sdgs.un.org/goals | |
| Sustainable Finance Disclosure Regulation (SFDR) | EU rules to ease comparison of financial producs against ESG goals | A set of European Union rules that came into effect on March 10, 2021, with the goal of making the sustainability profile of funds more comparable and easier for investors to understand. They categorise products into specific types and include metrics for assessing the ESG impacts of funds' investment processes. | Investment-Term | |
| Sustainable Taxonomy | Scheme of classification for sustainable ecomomc activities | A scheme of classification that establishes a list of sustainable economic activities. The EU is developing such a Taxonomy starting with climate and other key environmental issues and its Climate Delegated Act aims to support sustainable investment by making it clearer which economic activities most contribute to meeting the EU's environmental objectives. | ||
| Sustainable use and protection of water and marine resources | EU Taxonomy term | One of the 5 objective of the EU taxonomy | ||
| Tar sands | unconventional fossil fuel also referred to as oil sands | A type of unconventional fossil fuel, sometimes (more accurately) referred to as oil sands. Consisting of sand, bitumen (dense crude oil), clay, minerals and water, it is heavy and frequently requires significant amounts of water and energy to extract and refine. Greenpeace (May 2021) estimates that the amount of greenhouse gases emitted per barrel of tar sands oil can be 30% higher than conventional oil. | ||
| TBL or 3BL | Tripe bottom line : Social - Environment - Economic | Triple Bottom Line or TBL means the accounting framework originally developed in an effort to measure sustainability. TBL goes beyond traditional measures to incorporate three additional dimensions of performance: social, environmental (or ecological) and economic. | ||
| TCFD | Task force to improve and increase reporting on climate related financial disclosures | The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial decision-making information. Governments are encouraging firms to make disclosures aligned to the TCFD framework to enable investors to compare them and allocate capital accordingly. The UK Government is making TCFD reporting mandatory for all listed companies and large asset owners in 2022. | ||
| TEG | EU TEchincal expert group - addressing definition of EU taxonomy , EU green bond standard and climate benchmarks | EU TEchincal expert group started in July 2018 . Main reporting completed by 2021. The taxonomy and Taxonomy tools are helpful for coding and anlaysing business activities. | ||
| TFND | Task Force for Nature Related Disclosures (TFND) | Task Force for Nature Related Disclosures (TFND)The Taskforce on Nature-Related Financial Disclosures is an international initiative that builds on a model developed by the Taskforce on Climate-Related Financial Disclosures (TCFD). Its mission is to provide a framework for how organizations can address environmental risks and opportunities with the ultimate goal of channelling capital flows into positive action. | ||
| Thermal coal | Coal is mined above or below ground as a heating source . Globally perhaps 40% of electricity generation is coal | More commonly referred to as just "coal." Currently the heat source for around 40% of electricity generation (www.carbonbrief.org). Distinct from coking / metallurgical coal, which has a higher energy content and is used to make iron and steel. Both have high emissions, but most investor action to date has been targeting thermal coal given the lack of viable alternatives for metallurgical coal. | ||
| TPT | Transition Plan Taskforce- UK Gov initiative to support private sector cliamte tranision planning | Transition Plan Taskforce (TPT)The Transition Plan Taskforce (TPT) was launched by HM Treasury in April 2022 to develop the gold standard for private sector climate transition plans. The TPT is informing and building on international disclosure standards. | ||
| Transition Fiance | Transition Finance - products and services to supprot transition to greener economy | Transition FinanceFinancial products and services that support higher emitting companies to shift towards a green economy. These instruments are generally used by companies seeking to reduce greenhouse gas emissions and should be part of a credible decarbonisation pathway that is consistent with global climate goals. Many of the products and services being developed for decarbonisation also have the potential to be used in companies nature positive transition journeys. | ||
| Transition to a circular economy | EU Taxonomy term | One of the 5 objective of the EU taxonomy is to encoruage circular economy | ||
| UKGT | A tool to provide investors with definitions of which economic activities should be labelled as green. | A tool to provide investors with definitions of which economic activities should be labelled as green. This will support the quality of standards, labels and disclosures used in the industry for green finance activity. The UK Government proposes that nuclearas a key technology within our pathways to reach net zerowill be included within the UKs Green Taxonomy, subject to consultation. After the Taxonomy has been finalised, UK Gov will initially expect companies to report voluntarily against it for a period of at least two reporting years after which they will explore mandating disclosures. | Investment-Term | |
| UN Global Compact (UNGC) | A corporate sustainability initiative that calls on business to align with universal pricniples on corruption,human rights , labour and environmental issues | A corporate sustainability initiative that calls on businesses to align with universal principles on corruption, human rights, labour and environmental issues and to take strategic action to advance broader societal goals, such as the UN Sustainable Development Goals. A collaboration between a growing number (currently c.13,000) of companies. Investors can use the UNGC for investment by determining whether companies are following them or in breach. Data providers will provide data and analysis that can be used for this purpose and investors should do additional due diligence to determine if firm behaviours are in line with the principles. | https://unglobalcompact.org/ | |
| UN Guiding Principles on Business and Human Rights (UNGP) | Guidelines for States and organization to rpevent and address human rights abuses | The UN Guiding Principles on Business and Human Rights are a set of guidelines for States and companies to prevent, address and remedy human rights abuses committed in business operations. They are also called the Ruggie Principles and were created to encourage the practical implementation of the Universal Declaration of Human Rights and its related conventions by countries and companies. Investors can use these principles for investment by determining whether companies are following them or in breach and data providers will provide data and analysis that can be used for this purpose. However, investors should do additional due diligence to determine if firm behaviour are in line with the principles. They were endorsed by the UN Human Rights Council in 2011. They are split into three sections, covering: 1) The state duty to protect human rights; 2) The corporate responsibility to respect human rights; and 3) Access to remedy. | https://www.undp.org/sites/g/files/zskgke326/files/migration/in/UNGP-Brochure.pdf | |
| Unconventional fossil fuels | Lower volume sources such as oil sands, shale oil and arctic oil | Typically refers to oil / tar sands, shale oil & gas, deepwater oil and Arctic oil. | ||
| Value chain | Value chain is defined by GRI under GRI 1: Foundation 2021 as arange of activities carried out by the organization, and by entities upstream and downstream from the organization, to bring the organizations products or services from their conception to their end useس, including the supply chain. The Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Scope 3 Standard), which guides companies to quantify and report their GHG indirect emissions from value chain activities, defines value chain asall of the upstream and downstream activities associated with the operations of the reporting company, including the use of sold products by consumers and the end-of-life treatment of sold products after consumer use Similarly, the draft European Sust | Value chain is defined by GRI under GRI 1: Foundation 2021 as arange of activities carried out by the organization, and by entities upstream and downstream from the organization, to bring the organizations products or services from their conception to their end useس, including the supply chain. The Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Scope 3 Standard), which guides companies to quantify and report their GHG indirect emissions from value chain activities, defines value chain asall of the upstream and downstream activities associated with the operations of the reporting company, including the use of sold products by consumers and the end-of-life treatment of sold products after consumer use Similarly, the draft European Sust | ||
| VCMI | Voluntary Carbon Markets Initiative (VCMI) - international non profit with a mission to encourage effective voluntary markets in carbon | The Voluntary Carbon Markets Integrity Initiative (VCMI) is an international non-profit organization with a mission to enable high-integrity voluntary carbon markets (VCMs) that deliver real and additional benefits to the atmosphere, help protect nature, and accelerate the transition to ambitious, economy-wide climate policies and regulation. The organization is fully aligned with the goals of the Paris Agreement and is committed to a world on track to 1.5 degrees and net zero emissions by mid-century, achieved through a just transition that enhances equality and sustainable development for all. | https://vcmintegrity.org/ | |
| Work-life balance | Workذlife balance is defined in the draft European Sustainability Reporting Standards ESRS S1 Own Workforce as a satisfactory state of equilibrium between an individuals work and private life. Worklife balance encompasses not only the balance between work and private life given family or care responsibilities, but also time allocation between time spent at work and in private life beyond family responsibilities The National Guidelines on Responsible Business Conduct (NGRBC) state that it is abroad concept including proper balancing ofwork (career and ambition) on one hand andlife (pleasure, leisure, family, and spiritual development) on the other. Related, though broader, terms includelifestyle balance andlife balance | Workذlife balance is defined in the draft European Sustainability Reporting Standards ESRS S1 Own Workforce as asatisfactory state of equilibrium between an individuals work and private life. Workذlife balance encompasses not only the balance between work and private life given family or care responsibilities, but also time allocation between time spent at work and in private life beyond family responsibilities The National Guidelines on Responsible Business Conduct (NGRBC) state that it is abroad concept including proper balancing ofwork (career and ambition) on one hand andlife (pleasure, leisure, family, and spiritual development) on the other. Related, though broader, terms includelifestyle balance andlife balance | ||
| Worst forms of child labor | Worst forms of child labor are defined by the International Labour Organization in the Worst Forms of Child Labour Convention (C182) comprisingall forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict; the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances; the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties; work which, by its nature or the circumstances in which it is carried out, is likely to harm the health morals or safety of children. | Worst forms of child labor are defined by the International Labour Organization in the Worst Forms of Child Labour Convention (C182) comprisingall forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict; the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances; the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties; work which, by its nature or the circumstances in which it is carried out, is likely to harm the health morals or safety of children. |
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