The big glossary of sustainability terms
With the importance of taking care of our planet on the rise, so is the list of common sustainability terms that are used every day. In this glossary, get familiar with the key sustainability terms, acronyms and organizations you may need to know.
Sustainability is trending right now – and with good reason. Taking care of the limited resources we have available on our planet is more than just a passing fad. It is critical to maintaining our global ecosystem. Therefore, it is no surprise that it is being widely considered as important and disruptive as the continuing shift to digital. In a recent survey of more than 1,000 IT decision-makers, 92% said it was a priority. (Even if that priority is being questioned in a barrage of worldwide uncertainty.)
The responsibility of sustainability does not lie with one person or one department within a company. It is a shared responsibility – at least to a certain degree. While you may not need to be an expert, you should understand the key sustainability terms to maintain a conversation when it comes up at the next meeting (or even at the water cooler).
Below, you can find a big, constantly updated glossary of sustainability terms that will help you through the jungle of confusing jargon, acronyms and buzzwords. It will be updated regularly to help you stay one step ahead in the sustainability stakes.
The Agenda 2030 for Sustainable Development is a plan of action launched at a UN Summit in New York in September 2015. It is designed to put an end to global poverty in all its forms. The Agenda says that all countries and stakeholders acting in collaborative partnership are “resolved to free the human race from the tyranny of poverty and want to heal and secure our planet”.1
Federal Financial Supervisory Authority (BaFin for short) Is Germany’s financial regulator, established in 2002, to look after the integrity of the country’s financial system. It is focused on regulating financial institutions in Germany and reports directly to The German Federal Ministry of Finance.2
Certified B Corporations, also known as B Corps, are organizations verified by B Lab that meet a high set of standards for social and environmental performance, transparency, and accountability. B Corp is a nonprofit international network set up to transform the global economy to “benefit all people, communities, and the planet“.3
A carbon credit is a tradeable certificate or permit that enables the holder to emit a certain amount of carbon dioxide or other greenhouse gases. One carbon credit currently permits the emission of one ton of carbon dioxide or its greenhouse gas equivalent. Supporters of the carbon credit system maintain that it leads to measurable emissions, and eventual reductions of greenhouse gases from certified projects. Once purchased the credit is retired and cannot be used again. Each has a serial number and can be tracked through publicly available emission registries.
Carbon dioxide (CO2) is a colorless greenhouse gas that comes from the extraction and burning of fossil fuels, such as oil, coal, and natural gas, and from natural events such as volcanic eruptions. Carbon dioxide in the atmosphere heats up the planet, triggering climate change. According to NASA, human activities have pushed the atmosphere's carbon dioxide content up by 50% in less than 200 years.4
A carbon footprint refers to the best estimate of total greenhouse gas emissions released into the atmosphere that can be attributed to an individual, product, organization, or activity.
Carbon Intensity refers to the volume of carbon emissions per unit of gross domestic product (GDP). Decreasing carbon intensity means that energy use is more efficient.
Carbon neutral means having a balance between emitting and reducing carbon released into the atmosphere through offsetting, for example, to achieve net zero. Most organizations cannot go straight to net zero, so join offset programs which may include purchasing carbon credits, planting trees or setting up renewable energy projects.
Carbon offsetting refers to purchasing carbon credits and retiring them to compensate for greenhouse gas emissions. There are a large number of offset projects across the world that individuals and companies can invest in by purchasing carbon credits. These include maintaining solar and hydro projects to decrease reliance on fossil fuels, reforestation to industrial gas destruction.
Carbon pricing is the process of putting a price on carbon emissions to make emitters responsible for their actions. Carbon pricing can be introduced as a carbon tax or fee or a cap-and-trade system. In the latter, the total allowable emissions in a country, for example, are set in advance. The idea is that it will encourage low-carbon behaviors amongst organizations. There are currently no international standards for carbon pricing.
A carbon tax is a tax levied in the burning of fossil fuels, primarily coal, oil, gasoline, and natural gas. Carbon taxes are designed to reduce the usage of fossil fuels. It is in essence a Pigouvian tax as it is a tax that is placed on activities that create a negative impact.
The Carbon Disclosure Project is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, and government to manage their environmental impact. It measures and manages their risk and opportunities on climate change, water security and deforestation through an independent scoring methodology. This is designed to score their journey through disclosure towards environmental leadership and incentivize change.5
The circular economy is a framework of production and consumption where everything has a value, and nothing is wasted. Its circularity is designed to transform a throw-away economy into one that eliminates waste. This is done by circulating resources and giving them as much longevity as possible by reusing and recycling as well as adopting low-carbon efficiencies.
Coalition for Environmentally Responsible Economies/CERES
CERES is a not-for-profit sustainability advocacy organization founded in the US in 1989. Over the years, CERES has built up a network of investors, companies, and nonprofits to provide data-driven resources on sustainability, risks, and opportunities. to be endorsed by CERES organizations must commit to a ten-point code of conduct known as the CERES principles. These are a set of guide rails to assist them with their sustainability behaviors. In addition, members must measure their performance against the principles annually and produce a publicly available environmental report.6
Climate change is a long-term change in global or regional climate and temperature patterns. Historically, climate change has occurred naturally via solar radiation and shifting ocean currents. At present, however, it is most influenced by greenhouse gas-emitting human activities and the disruption of natural carbon sinks. The term is often used interchangeably with “global warming,” though global warming refers to the steady and consistent change in global temperatures.
Climate disclosures are a pivotal step in reaching net zero carbon emissions. By meeting investor and public demands for disclosure, it is hoped that transparency will make organizations greener. The US released a proposed ruling in March 2022 to make it mandatory for all publicly listed companies to make disclosures. The rule amendments would require domestic and foreign registrants to include certain climate-related data in their registration statements and reports. These include climate-related risks and their actual or impacts on the registrant’s business, strategy, and roadmap, information about climate-related targets and certain climate-related financial metrics.
Climate Neutral Now
The Climate Neutral Now initiative was launched by the United Nations Framework Convention on Climate Change (UNFCC) to grow climate action by encouraging and supporting organizations and individuals to work together voluntarily to achieve a climate neutral planet by 2050, as outlined in the Paris Agreement.
Carbon neutrality refers to the mitigation of greenhouse gases. This can be achieved by balancing new emissions with gas removal, such as through carbon offsetting, or by eliminating emissions altogether.
Closed Loop (closed system)
Closed Loop refers to a zero-waste system where all material in a supply chain is reused, recycled, or composted. This approach is designed to stop excessive waste from entering landfills, conserve natural resources, and increase environmental efficiencies. The idea is that recycled items require less labor and energy. In an ideal world, products would be in a continuous circle of closed loop recycling.
Code of Conduct
A Code of Conduct is a guiding document that outlines an organization’s mission, values, and professional conduct standards, often prioritizing goals and aspirations. Many ESG frameworks, such as the Global Reporting Initiative (GRI) include codes of conduct.
Conference of the Parties (COP)
For nearly ten years, the United Nations (UN) has been bringing together every country in the world for global climate summits for Conference of the Parties or COPs. The meetings are responsible for monitoring and reviewing the United Nation’s Framework Convention on Climate Change. COP21, held in Paris in 2015, was historic in its creation of the first international climate change agreement.
Deforestation is the deliberate clearing of forested land. Deforestation has dramatically altered landscapes across the globe. Today the largest deforestation projects are happening in tropical rainforests for roads, logging as well as to create large cattle ranches, oil palm and rubber plantations.
D&I or DEI
Diversity and inclusion or diversity, equity, and inclusion broadly outline the programs and policies that organizations put in place to ensure that employees feel safe and supported. Diversity and inclusion efforts often focus on increasing the representation of women, people of color, LGBTQI individuals, and those with disabilities. The more diverse companies are, the more likely they are to outperform their less diverse peers on profitability, according to a McKinsey report.7
Emissions are particles, substances, or radiation released into the atmosphere. Emissions are one of the driving forces behind global warming and climate change.
End of Life
End of life describes the final stage of a product’s useful life where it is then disposed of, reused, or recycled.
Environment Management System (EMS)
An EMS is a set of processes and practices that allow organizations to reduce their environmental impact and at the same time increase operational efficiencies. This is achieved through consistent review, evaluation, and enhancement of environmental performance. Each EMS is designed to meet the specific requirements of the organization.
Environment, Social, and Corporate Governance (ESG)
ESG describes an organization's corporate commercial interests that focus on sustainable and ethical impacts. Captial markets are increasingly using these non-financial factors as part of their analysis in evaluating an organization and identifying material risks and growth opportunities.
ESG integration is the addition of ESG factors to traditional financial analysis on a systematic basis into the investment process.
ESG investing is sometimes referred to as “social responsibility investing.” It refers to investments that prioritize ESG factors. The integration of ESG metrics in the investment process is being seen as a more efficient way of allocating capital to enhance investors’ returns, while having a positive impact on the environment and wider society. Without international accounting and reporting standards for ESG, however, it has made it difficult for organizations to share best practices.
European Green Deal
The European Union’s (EU) Green Deal presented in 2019 is a strategy designed to make the EU the first climate neutral continent by 2050. It is designed to build the EU into a sustainable economy by turning climate and environmental challenges into opportunities by transitioning to a cleaner, circular economy. It is backed by an investment plan totaling 1 trillion Euros.
The EU Taxonomy created by the European Commission is a green classification that translates the EU’s climate and environmental objectives into criteria for investment purposes. Organizations can use the EU Taxonomy to plan climate and environmental transitions and raise funding for their transformations. Financial institutions can use the EU Taxonomy to innovate green financial products. The EU Taxonomy, however, is not a mandatory list of economic activities for investors to invest in or a set of compulsory requirements on environmental performance.
Extended Producer Responsibility (EPR)
EPR is a regulatory tool that mandates producers take responsibility for the environmental impact at all stages of product use and disposal, including end-of-life recycling, reuse, and buyback of materials. This can be done via financial payments or through physical collections.
Fairtrade is a system of certification designed to ensure that a set of standards are met in the production and supply of a product or ingredient. It is focused on producers in developing countries, where there is a higher likelihood of worker underpayment and poor working conditions. Fairtrade itself is an independent non-profit that works to improve the lives of workers, raise awareness, and build ethical trading links.8
Fossil fuel is a generic term that is used for non-renewable fuels such as coal and its byproducts, natural and derived gas, crude oil, and petroleum materials The term refers to the fact that they are made up of decomposed, buried carbon-based organisms that died millions of years ago. Fossil fuels are used to produce energy. Their supply is limited, and they will eventually run out.
Greenhouse gases or GHGs are gases in the earth’s atmosphere that occur naturally and capture heat to keep our planet at a habitable temperature. These gases act like a greenhouse which is why they have been christened GHGs. They include carbon dioxide, methane, nitrous oxide, and water vapor. Together they work to keep the earth's temperature at an average of 14 degrees Centigrade (57 Fahrenheit). Human activities are altering the earth’s natural balance with greenhouse gases, triggering global warming and climate change.
Global Reporting Initiative is an independent global body that helps governments, companies, and other organizations to take responsibility for their environmental impacts via a set of widely adopted standards – the GRI standards. They have been designed to enable public reporting on economic, environmental, and social impacts, contributing towards sustainable development.9
Green bonds are debt securities designed to finance environmentally friendly programs. They sit under the category of ESG (environmental, social, and governance) and can be used to offset emissions in proportion to investment. They have become a thriving source of sustainable investment.
“Green” vs. “Sustainable”
Green refers to all facets of being environmentally friendly, from the activist movement itself to fashion, furniture, and buildings. Sustainability goes one step beyond the environment and is also concerned with health, economic, and social equity.
The greenhouse effect is used to explain the way heat is trapped close to the earth’s surface by greenhouses gases to maintain its optimum temperature. It is a naturally occurring phenomena, but human activities are increasing the greenhouse effect and contributing to global warming. Slight changes to the global temperature can have a catastrophic impact, such as causing glaciers to melt.
Protocol Established in 1998, the Greenhouse Gas Protocol (GHGP) is a standards institution formed by the World Resources Institute and the World Business Council for Sustainable Development. It has established a comprehensive global framework to measure and manage greenhouse gas emissions from private and public sector operations, value chains, and mitigation actions. The GHG protocol supplies the world’s most widely used greenhouse gas accounting standards.10
Greenwashing is the practice of making an unproven claim that deceives consumers into believing that an organization's products or services are environmentally friendly.
International Financial Reporting Standards (IFRS) Foundation
The IFRS Foundation is a not-for-profit organization established to develop high-quality, understandable, enforceable, and globally accepting accounting and disclosure standards. These standards outline how a company discloses information about sustainability-related factors that may help or impede it in creating value.11
International Integrated Reporting Council (IIRC)
The IIRC was formed in 2010 and is made up of a cross-section of industry leaders from the corporate, accounting, securities, investment, regulatory, and academic worlds. Its integrated reporting framework is used to connect financial statements and sustainability-related financial disclosures.12
Impact investing looks to generate social and/or environmental benefits while delivering a financial return for investors.
Intergovernmental Panel on Climate Change (IPCC)
The IPCC is the United Nations (UN) body for assessing the science related to climate change. The IPCC was established in 1988 by the World Meteorological Organization (WMO) and the United Nationals Environment Program (UNEP). Its objective is to provide governments with scientific data that they can use to develop their climate change policies.13
International Organization of Securities Commissions (IOSCO)
OSCO is a global association of securities regulatory agencies which is recognized for setting global standards for securities. These form the foundation for evaluation of the securities sector for the Financial Sector Assessment Programs (FSAPs) and the International Monetary Fund (IMF) and the World Bank.14
ISO 14001 Certification
ISO 14001 is an internationally agreed upon and recognized standard for Environmental Management Systems. It applies to all types and sizes of organizations, including public and private sector and non-profit.
ISO 26000 Guidance
ISO 2600 is defined as an international standard developed to help organizations assess and address their social responsibilities. It is designed to serve as guidance and is not a certification.
Lifecycle Assessment (LCA)
An LCA is a systematic analysis of products or services throughout their entire lifecycle to check for the potential of environmental impacts. Every part of the lifecycle is examined from extraction of raw materials to production and what happens to it at the end of life.
A materiality assessment identifies and prioritizes the ESG issues that are most important to an organization and its stakeholders. As well as providing an opportunity to analyze risks and opportunities in an organization, it is also a route towards making a business case to senior executives on the importance of reporting ESG data.
Methane is a highly flammable gas made up of carbon and hydrogen. Methane enters the atmosphere by both natural and human related activities. It has been cited as a potent greenhouse gas causing climate change.
This is the process of greenhouse gas removal from the atmosphere through negative emissions. This involves more greenhouse gases been removed from the atmosphere than are added. This can be done by using forests to absorb carbon dioxide, for example. It is hoped that negative emissions technologies will be innovated at scale.
Net-zero emissions is the goal of achieving a balance between greenhouse gas emissions produced and those removed from the atmosphere. To avoid a climate disaster greenhouse gas emission needs to be kept as low as possible.
The Paris Agreement is a legally binding international treaty on climate change that was ratified by 196 parties at COP 21 in Paris on 12 December 2015. It came into force on 4 November 2016. The Paris Agreement is designed to work on a 5-year cycle of increasingly ambitious climate actions by member countries. Under the Paris Agreement enhanced transparency framework, countries will report transparently on their progress with climate change mitigation, starting in 2024.
Regenerative agriculture is focused on improving soil health, which has deteriorated due to the use of fertilizers and insecticides. The idea is that healthy soil can be more productive, store more carbon, and increase biodiversity.
Renewable energy is energy that comes from natural resources that can be renewed at a faster rate than it is consumed. Wind, solar, geothermal, biomass, and hydropower are all examples of renewable energy.
Sustainability Accounting Standards Board (SASB)
SASB is a not-for-profit whose mission is to help companies report on sustainability topics. SASB standards have been developed to guide companies' disclosure of sustainability information by companies to their investors. Available in 77 industries, the standards framework identifies a subset of environmental, social and governance issues most relevant to financial performance in each industry.15
Sustainable Development Goals (SDGs)
Developed by the United Nations (UN) the Sustainable Development Goals (SDGs) are a group of 17 interlinked global goals designed as a “blueprint to achieve a better and more sustainable future”. The SDGs have a 2030 deadline for implementation. They include no poverty, zero hunger, good health and well-being, quality education, gender equality, clean water and sanitation, affordable and clean energy, decent work and economic growth, industry innovation and infrastructure, reduced inequality, sustainable cities and communities, responsible production and consumption, climate action, life below water, life on land, peace and justice, strong institutions, and partnership to achieve goals.16
The Greenhouse Gas Protocol (GHG) has defined three scopes of emissions. Scope 1 pertains to all direct emissions from the activities of an organization, such as running a fleet of vehicles. Scope 2 refers to indirect emissions, such as electricity purchased and used by a factory. Scope 3 includes all other indirect emissions that are out of control of an organization, such as business travel.
Social enterprises are organizations with a social purpose. Like any other business, social enterprises strive to be commercially successful., but they are designed to transform lives and communities through how they operate, who they employ, and how they utilize their profits. Cafes employing ex-offenders are examples of social enterprises.
Social Impact Bonds
Social impact bonds are public-private partnerships that fund efficient and effective social services via performance-based contracts. These services may, for example, revolve around helping the homeless with affordable housing or providing training for refugees.
Supply Chain Traceability
Supply chain traceability enables companies to identify, track, and trace a product and its components as it moves along the supply chain, from raw materials to finished product. This data plays a vital role in provenance and sustainability.
Supply Chain Transparency
Supply chain transparency refers to visibility and accessibility to data at every stage within the supply chain. Supply chain transparency is the best way to build trust between companies, their partners, and customers.
Supply Chain Visibility (SCV)
Supply chain visibility is the ability to track every component of a product from raw material to the customer. For retail operations, this extends to tracking goods from suppliers through to the end customer. As well as improving customer service, inventory management, and cost controls, supply chain visibility can show sustainable proficiency against competitors.
Sustainability bonds are bonds whose proceeds are used to finance or re-finance environmental and/or social projects.
Sustainability means having the ability to maintain and support a process continuously. In 1987 the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. 17
Sustainability governance defines and implements a company’s various sustainability initiatives and incorporates them into decision making. It helps to implement a sustainability strategy across the organization, strengthens reporting, and provides overarching accountability.
Sustainability reporting is the disclosure of ESG goals by an organization and includes communication on its sustainability strategy and ESG objectives. The benefits of producing regular sustainability reports include enhanced risk management, better decision-making, and providing a reputation boost amongst investors and customers.
Task Force on Climate-related Financial Disclosures (TCFD)
The Financial Stability Board (FSB) developed the TCFD to develop recommendations on various data points that companies should disclose to support investors, lenders, and insurance underwriters in assessing risks linked to climate change. 18
United Nations Global Compact (UNGC)
The UNGC claims to be the world’s largest corporate sustainability initiative. Its aim is to mobilize a global movement of sustainable companies and stakeholders. To make this happen, it supports businesses with principles on human rights, labor, environment, and anti-corruption. It also takes action to advance wider societal goals, such as the UN Sustainable Development goals.19
United Nations Framework Convention on Climate Change (UNFCCC)
The UNFCCC is the United Nations (UN) Framework Convention on Climate Change. It sets out a basic legal framework and principles for international climate change cooperation between participating nations.
United Nations Principles for Responsible Investment (UNPRI)
The UNPRI is an international organization that works to promote the inclusion of ESG into investment decision making. It relies on voluntary disclosures from participating members who are also called signatories.
World Economic Forum
Established in 1971 as a not-for-profit organization, the World Economic Forum looks to engage political, business, and cultural leaders to shape global, regional and industry agendas.20
- Sustain.Life – Glossary of Sustainable Terms
- Paul Weiss, Rifkind, Wharton & Garrison LLP