Resources
Sustainability glossary
Plain-language definitions for ESG, climate, and EU-compliance terms - written for SMEs, without the corporate jargon.
Reporting
8 terms- climate transition planA time-bound plan showing how a company will shift its business model to a low-carbon economy.
- CSRDEU directive requiring large and listed companies to disclose sustainability information under ESRS.
- double materialityCSRD principle: report topics material either to your business (financial) or to people & planet (impact).
- materiality assessmentProcess of identifying which sustainability topics are significant enough to disclose under CSRD/ESRS.
- PIEPublic-Interest Entity — listed companies, banks, insurers and other entities designated by EU member states.
- TCFDFramework for disclosing climate-related financial risks — now absorbed into ISSB and ESRS E1.
- TNFDFramework for disclosing nature-related risks and dependencies, complementary to TCFD.
- VSMEVoluntary reporting standard from EFRAG designed for non-listed SMEs — a simplified alternative to full ESRS.
Carbon & GHG
20 terms- activity dataThe physical quantity of a resource consumed — e.g. litres of diesel or kWh of electricity — used with an emission factor.
- avoided emissionsEmissions reductions occurring outside a company's inventory boundary due to its products or services.
- biogenic emissionsCO₂ emissions from combustion or decomposition of biomass — reported separately from fossil emissions.
- carbon accountingThe practice of quantifying an organisation's GHG emissions using a recognised methodology.
- carbon footprintTotal GHG emissions caused by an organisation, product or activity, in tonnes of CO₂-equivalent.
- carbon offsetCredit representing one tonne of CO₂e avoided or removed elsewhere — used to compensate residual emissions.
- carbon removalPermanently removing CO₂ from the atmosphere via nature-based sinks or engineered solutions like DAC.
- emission factorA coefficient that converts activity data (kWh, litres, km) into CO₂-equivalent emissions.
- GHGGreenhouse gas — atmospheric gases (CO₂, CH₄, N₂O, HFCs, PFCs, SF₆, NF₃) that trap heat and cause warming.
- LCAStandardised methodology (ISO 14040/44) to assess environmental impacts across a product's life cycle.
- location-basedScope 2 method using the average emissions intensity of the grid where consumption occurs.
- market-basedScope 2 method using contractual instruments (PPAs, GOs, RECs) to reflect purchased electricity attributes.
- net zeroReducing GHG emissions as close to zero as possible and neutralising residual emissions with permanent removals.
- PCFThe lifecycle GHG emissions of a specific product, from raw materials to end-of-life.
- SBTiInitiative validating corporate emissions targets against a 1.5°C-aligned pathway.
- science-based targetEmissions target aligned with the Paris Agreement's 1.5°C pathway, validated by SBTi.
- Scope 1Direct GHG emissions from sources you own or control — fuel combustion, company vehicles, fugitive emissions.
- Scope 2Indirect emissions from purchased electricity, steam, heat and cooling consumed by your organisation.
- Scope 3All other indirect emissions across your value chain — purchased goods, travel, transport, use of sold products.
- tCO₂eTonnes of carbon-dioxide-equivalent — the standard unit that normalises all greenhouse gases to CO₂.
EU Policy
7 terms- CBAMEU mechanism putting a carbon price on imports of cement, steel, aluminium, fertilisers, hydrogen and electricity.
- EU ETSEU cap-and-trade system for carbon allowances covering power, heavy industry and intra-EU aviation.
- EU TaxonomyEU classification system defining which economic activities count as environmentally sustainable.
- Fit for 55EU legislative package to cut net greenhouse gas emissions by at least 55% by 2030 versus 1990.
- Green DealThe EU's overarching strategy to become climate-neutral by 2050 across all sectors of the economy.
- Paris Agreement2015 UN treaty committing signatories to limit global warming to well below 2°C, pursuing 1.5°C.
- SFDREU regulation requiring financial market participants to disclose sustainability risks and impacts.
Standards
6 terms- ESRSThe 12 European Sustainability Reporting Standards companies use to comply with CSRD.
- GHG ProtocolThe global standard for corporate GHG accounting, defining Scope 1/2/3 boundaries.
- GRIWidely adopted multi-stakeholder sustainability reporting framework focused on impact materiality.
- ISSBIFRS Foundation body issuing global sustainability disclosure standards (IFRS S1 and S2).
- LSMESimplified ESRS standard for listed small and medium-sized enterprises, effective from FY 2028 reporting.
- SASBIndustry-specific sustainability accounting standards, now under the IFRS Foundation.
Finance
5 terms- Guarantee of OriginEU electronic certificate certifying that electricity was produced from renewable sources.
- physical riskFinancial risk from acute (storms, floods) or chronic (heat, sea-level rise) climate impacts.
- PPALong-term contract to buy electricity from a specific generator, often used to source renewables.
- RECTradable certificate representing the environmental attributes of one MWh of renewable electricity.
- transition riskFinancial risk from policy, technology, market or reputational shifts as economies decarbonise.
General
6 terms- biodiversityThe variety of life on Earth — species, genes, ecosystems — increasingly disclosed under ESRS E4 and TNFD.
- circular economyAn economic model designed to eliminate waste and keep materials in use through reuse, repair and recycling.
- ESGEnvironmental, Social and Governance — the three pillars used to assess corporate sustainability performance.
- greenwashingMisleading claims that overstate the environmental benefits of a company, product or activity.
- just transitionEnsuring the shift to a low-carbon economy is fair for workers and communities affected by change.
- renewable energyEnergy from sources that replenish naturally on a human timescale — solar, wind, hydro, geothermal, biomass.