ESG Glossary

5. Scope 3:

A. Environmental terms

1. Carbon Footprint:

The total greenhouse gas emissions (measured in CO₂ equivalents) caused directly or indirectly by an individual, organization, or product.

2. Circular Economy:

Reducing waste by reusing, repurposing and recycling.
Designing systems to maximise resources and minimise environmental impact.

3. Scope 1:

Direct emissions that are controlled and / or owned by your organisation
(e.g. your facilities, vehicles etc.)

4. Scope 2:

Indirect GHG emissions associated with the purchase of electricity, heat etc. to run your organisation.
They are the result of your organisation's use of energy (e.g. gas bill of your facilities).

The GHG of your chain of suppliers. You don't control their emissions,
but you control how you choose your suppliers.

6. Biodiversity Offsetting:

Measures taken to compensate for biodiversity losses due to development by restoring or protecting other areas.

7. Carbon Neutral:

Is the result of offsetting the CO₂ produced.

8. Carbon Negative:

The reduction of an entity's carbon footprint to less than neutral.

9. Net Zero:

Achieving a balance between the carbon emitted into the atmosphere, and the carbon removed from it.

B. Social terms

1. Stakeholder Engagement:

The process of involving stakeholders (employees, customers, local communities) in ESG decisions and strategies

2. Diversity, Equity, and Inclusion (DEI):

Policies and practices promoting fair treatment and opportunities across gender, race, age, and more

3. Supply Chain Transparency:

The practice of ensuring visibility and accountability for social and environmental conditions within the supply chain

4. Community Impact Assessment:

Evaluating how business activities or projects affect local communities in terms of social and economic factors

C. Governance glossary

1. ESG Integration:

Embedding environmental, social, and governance considerations into investment decision-making or business strategy

2. Materiality Assessment:

Identifying the ESG issues that are most significant to a company’s stakeholders and business

3. Greenwashing:

The act of making misleading claims about a company’s environmental practices to appear more sustainable

4. ESG Risk Management:

The process of identifying and mitigating risks related to environmental, social, or governance issues

5. Sustainability Reporting
Frameworks:

Standards used to report ESG performance (e.g., GRI, SASB, TCFD)

6. SBTi (Science Based
Targets Initiative)

Emissions reductions targets adopted by companies to reduce GHG emissions are considered “science-based” if they are in line with the level of decarbonization