15 mins

ESG Terms & Reporting: Your Comprehensive Guide to Navigating the ESG Landscape

This glossary demystifies the vast landscape of ESG by presenting an in-depth exploration of key terminologies and concepts, providing a comprehensive guide for anyone seeking to understand the intricacies of ESG reporting and its critical role in shaping a sustainable future.

In a rapidly evolving world where the environmental, social, and governance (ESG) landscape is increasingly at the forefront, understanding the terminologies and jargon associated with it can be a daunting task. ESG terms span across a broad spectrum of disciplines, from finance and investing, to environmental science, policy-making, and corporate governance. Whether you're an investor, a corporate executive, an analyst, a sustainability enthusiast, or simply curious, this glossary will serve as an essential guide to navigate the intricate ESG universe.

We've meticulously assembled a comprehensive list of key ESG terms, striving for inclusivity while maintaining focus on relevance and prominence in current discussions. Each term is a crucial piece of the ESG puzzle, offering a clearer picture of the multifaceted challenges and opportunities we face in our journey towards a sustainable future.

From 'Active Ownership' to 'Water Footprint', and everything in between, we delve into the core of ESG, unscrambling the complex lexicon and unveiling the intricacies behind each term. This glossary will serve as your ESG compass, guiding you through the labyrinth of sustainability and responsible investing, helping to decode complex concepts and trends, and ultimately assisting you in making informed decisions.

Welcome to the fascinating world of ESG. Let's unravel the ESG code together.


Active Ownership in the context of ESG (Environmental, Social, and Governance) refers to the approach where investors actively leverage their equity stakes in a company to engage in dialogue and interaction with the company's management. This is usually done with the aim of influencing the company's behavior in ESG matters.

Active owners may express their concerns about ESG risks and encourage the company to improve its practices or disclose more information about ESG issues. They might also use their voting rights at shareholder meetings to support resolutions that promote good ESG practices.

By practicing active ownership, investors can drive positive change in corporate behavior, mitigate investment risks, and ultimately enhance long-term shareholder value.

Adaptation Finance refers to the funding directed towards adjusting economic, social, or physical systems in response to actual or expected climate change impacts. These adjustments can include both reactive measures, taken in response to climate changes that have already occurred, and proactive measures, designed to safeguard against anticipated climate change impacts.

Adaptation Finance can be used for a wide range of interventions, from infrastructure enhancements (such as building sea walls or improving water management systems to handle increased flooding risk) to supporting changes in agricultural practices for changing weather patterns, to investing in new technologies that increase resilience to climate change impacts.

Adaptation Finance can originate from public, private, domestic or international sources, and is an essential component of the global response to climate change, helping societies manage risks and seize opportunities associated with a changing climate.


Biodiversity is the variety of life in a particular habitat or ecosystem, encompassing the diversity of species, genetic variability and the variety of ecosystems. In corporate and investment spheres, it's recognized for its crucial role in maintaining the health of ecosystems that provide essential services like pollination, water purification, climate regulation, and disease control, which can directly or indirectly impact the sustainability and profitability of businesses. Therefore, companies' and investors' considerations of biodiversity reflect their commitment to the preservation of ecosystems, aligning with their broader environmental responsibilities and sustainability goals.

Biodiversity Finance is the practice of raising and managing capital, as well as improving the effectiveness of financial flows to support biodiversity conservation and sustainable use. It involves economic sectors, financial instruments, and funding sources that invest in activities with biodiversity benefits. The goal of biodiversity finance is to create economic incentives for the conservation and sustainable use of biodiversity, while reducing threats to the world's biodiversity. This can include activities like green bonds for reforestation projects, sustainable agriculture practices, and investments in businesses that promote or protect biodiversity.

Bloomberg ESG is a service provided by Bloomberg that assigns a score from 1 to 100 to companies based on their level of environmental, social, and governance (ESG) and sustainability disclosure. The focus is on the transparency and completeness of a company's sustainability reporting, rather than evaluating the quality of the company's ESG performance. It provides a tool for investors and other stakeholders to assess a company's commitment to transparent disclosure of its sustainability initiatives, risks, and impacts.

Blue Economy is an economic model that simultaneously promotes the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs, while preserving the health of the ocean ecosystem. It encompasses a wide range of sectors including sustainable fisheries, maritime transport, renewable energy, waste management, climate change, and coastal tourism. The Blue Economy approach is highly connected to the concepts of the green economy, circular economy and the decarbonisation agenda, emphasizing conservation as much as it does innovation and economic growth.


CAF - The Center for Climate Aligned Finance (CAF) is an organization established by the Rocky Mountain Institute in collaboration with Wells Fargo, Goldman Sachs, Bank of America, and JPMorgan Chase. Launched in July 2020, CAF's mission is to guide and support the financial industry in aligning its practices with the goals of the Paris Agreement, particularly facilitating a transition in the global economy to net-zero emissions by mid-century. The center works with financial, industrial and political stakeholders to develop strategies, methodologies, tools, and policies that promote climate alignment within the finance sector.

Carbon Credits are certificates that represent the reduction, avoidance, or sequestration of one metric ton of carbon dioxide emissions, or equivalent emissions of other greenhouse gases. They are a key component of national and international emissions trading schemes. Companies, governments, or other entities can purchase these credits to offset their own greenhouse gas emissions and meet their carbon reduction goals. Additionally, the funds raised by selling carbon credits can finance projects that reduce greenhouse gas emissions, such as renewable energy, energy efficiency, or reforestation projects.

Carbon footprint is the total amount of greenhouse gases, specifically carbon dioxide, that are emitted directly or indirectly by an individual, organization, event, or product. It's usually measured in tons of CO2 equivalent per year. This can include emissions from activities like driving a car, using electricity, or consuming goods and services. The concept is critical in understanding one's impact on climate change and in identifying opportunities to reduce that impact.

Carbon neutral means achieving a state where the net amount of carbon dioxide or other carbon compounds emitted into the atmosphere is balanced by an equivalent amount being removed. This can be achieved through a combination of reducing emissions and investing in activities that either remove carbon from the atmosphere or prevent more carbon from being emitted. This could include projects like reforestation, which absorbs CO2, or investing in renewable energy projects, which produce energy without releasing CO2.

Carbon Offset is a reduction in emissions of carbon dioxide or other greenhouse gases made to compensate for emissions made elsewhere. These are usually quantified and sold in the form of 'credits', where each credit represents the avoidance or removal of greenhouse gases equivalent to one metric ton of carbon dioxide. Entities can purchase carbon offsets to mitigate their own greenhouse gas emissions, effectively balancing out their environmental impact. These offsets can fund a range of projects, from renewable energy initiatives to reforestation efforts, which reduce future emissions or remove existing atmospheric CO2.

Carbon Pricing is an economic strategy aimed at reducing greenhouse gas emissions by assigning a cost to emitting carbon dioxide and other greenhouse gases. This cost, often referred to as a carbon price, is typically implemented through one of two systems: a carbon tax or a cap-and-trade system. 

A carbon tax directly sets a price on carbon by defining a tax rate on greenhouse gas emissions or - more commonly - on the carbon content of fossil fuels. 

Cap-and-trade systems, on the other hand, set a maximum level of emissions (a cap) and then allow firms to buy and sell rights to emit CO2, known as allowances. The cap typically decreases over time, providing an economic incentive for businesses to reduce their emissions.

Carbon Tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas). It is a form of carbon pricing, and it's intended to reduce carbon dioxide (CO2) emissions by making fossil fuels more expensive, thereby encouraging industries and individuals to decrease their carbon use. The tax is typically levied on the carbon content of fossil fuels, reflecting the amount of CO2 that each type of fuel will emit when burned. The revenue generated from a carbon tax can be used in various ways, including to fund renewable energy projects, to lower other taxes, or to be returned to citizens in the form of a dividend.

CDP - formerly known as the Carbon Disclosure Project, is a global non-profit organization that drives companies, cities, states, and regions to measure and manage their environmental impacts. With a focus on the disclosure of greenhouse gas emissions, water usage, and deforestation activities, CDP operates a global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. CDP uses the power of measurement and information disclosure to improve the management of environmental risk. It provides a platform where organizations disclose their environmental impact data, helping them make strategic decisions, reduce emissions, and improve their environmental performance.

CDSB - The Climate Disclosure Standards Board (CDSB) is an international consortium of business and environmental non-governmental organizations. It offers a framework for companies to report environmental and natural capital information in their mainstream reports, such as the annual report. CDSB's goal is to provide decision-useful environmental information to investors via the mainstream corporate report, enhancing the efficient allocation of capital. Its efforts are key to advancing environmental disclosure and promoting sustainable economic systems.

Circular economy is an economic system aimed at minimizing waste and making the most of resources. This regenerative approach contrasts with the traditional linear economy, which has a 'take, make, dispose' model of production. In a circular economy, we keep resources in use for as long as possible, extract the maximum value from them while in use, then recover and regenerate products and materials at the end of their service life. It is underpinned by a transition to renewable energy sources, aims to design waste out of the system and is enabled by digital technology.

Clean Technology, also known as Cleantech, in the context of ESG, refers to products, services, or processes that use technology to significantly reduce environmental impacts. This can involve renewable energy production, energy-efficient devices, environmentally friendly manufacturing processes, waste management, water purification, and other technologies that contribute to a sustainable and low-carbon economy. By reducing emissions, waste, or other environmental impacts, clean technology can enhance a company's environmental performance and thus positively influence its ESG ratings and attractiveness to sustainable investors.

Climate Change is a significant and lasting alteration in global weather patterns and temperatures, largely driven by human activities, notably the burning of fossil fuels and deforestation, which increase the concentration of greenhouse gases in the Earth's atmosphere. In the context of Environmental, Social, and Governance (ESG), climate change is considered an environmental risk that companies and investors must address. Businesses can contribute to mitigating climate change through strategies such as reducing carbon emissions, implementing sustainable practices, and innovating in clean energy technologies. Moreover, companies are expected to disclose their climate change risks and what actions they are taking to mitigate those risks. This transparency allows investors to make informed decisions and support businesses that align with their own values and risk assessments related to climate change.

Climate change mitigation is the act of reducing or preventing the emission of greenhouse gases into the atmosphere to limit the extent of global warming and associated climate change. It involves implementing practices and technologies that increase energy efficiency, reduce carbon intensity from the energy sector, protect and restore forests, and promote sustainable agricultural practices. 

Climate change mitigation measures are integral to the environmental stewardship of a company. These measures can range from reducing energy use and shifting to renewable energy sources, to innovating low-carbon and carbon-neutral products and services. Companies often set and report on emission reduction targets to show their commitment to mitigating their climate impact.

Climate Finance is the funding directed towards climate change mitigation and adaptation projects and programs. This includes investments in renewable energy, energy efficiency, and sustainable transport, as well as funding for initiatives that increase resilience to climate change's impacts, such as sea-level rise and increased frequency of extreme weather events. Climate Finance can come from public, private, and alternative sources and can be used at both a national and international level. It plays a critical role in achieving the emission reductions outlined in the Paris Agreement and in supporting the transition towards a low-carbon, climate-resilient global economy.

Climate Resilience is the ability of a system, organization, community, or ecosystem to withstand and adapt to the impacts of climate change. It encompasses strategies, practices, and measures implemented to minimize vulnerabilities and increase the capacity to cope with and recover from climate-related hazards, shocks, and stresses.

Climate resilience involves both proactive and reactive approaches. Proactively, it entails identifying and assessing climate risks, integrating them into decision-making processes, and implementing measures to reduce or avoid those risks. Reactive resilience focuses on the ability to recover quickly and effectively from climate-related events, such as extreme weather events, sea-level rise, or temperature fluctuations.

By fostering climate resilience, organizations and communities can enhance their ability to navigate climate change challenges, reduce potential disruptions, protect assets, safeguard livelihoods, and create more sustainable and adaptive environments for the future.

Climate-related opportunity refers to favorable circumstances and potential advantages that arise from the challenges and transitions associated with climate change. These opportunities emerge as societies, organizations, and investors seek to address climate-related risks and capitalize on sustainable solutions. Climate-related opportunities are closely linked to the transition to a low-carbon and resilient economy.

Climate-related opportunities not only provide economic and financial benefits but also contribute to environmental stewardship, social well-being, and long-term sustainability. Identifying and harnessing these opportunities can drive positive change and support the transition to a more sustainable and resilient future. 

Climate-related risk is the potential negative impacts and uncertainties that arise from climate change and its associated hazards. These risks stem from the physical impacts of climate change, such as extreme weather events, rising sea levels, and changing precipitation patterns, as well as the transition to a low-carbon economy. Key aspects of climate-related risk include: Physical Risks, Transition Risks, Liability Risks and Reputational Risks. 

It is important for organizations to assess and manage climate-related risks as part of their overall risk management strategy. This involves conducting climate risk assessments, scenario analysis, and stress testing to understand potential vulnerabilities and develop appropriate risk mitigation measures. By addressing climate-related risks, organizations can protect their financial performance, reputation, and long-term sustainability in the face of a changing climate.

Community Impact Investing is an investment approach that aims to generate positive social and environmental impacts alongside financial returns. It focuses on directing investment capital towards projects, businesses, and initiatives that benefit local communities, particularly those underserved or marginalized.

Community Impact Investing recognizes that financial capital can be a force for positive change and that investments can contribute to the betterment of local communities. It aligns with the broader principles of ESG investing by integrating social and environmental considerations into investment decisions, ultimately driving positive outcomes for people and the planet.

Conservation Finance refers to the use of financial mechanisms and strategies to support and advance conservation objectives, including the protection and sustainable management of natural resources, ecosystems, and biodiversity. It involves leveraging financial tools and capital to address environmental challenges and promote conservation initiatives. Key aspects of Conservation Finance include: Funding Mechanisms, Sustainable Land and Resource Management, Biodiversity Protection, Return on Investment, Partnerships and Collaboration, 

Conservation Finance plays a critical role in addressing environmental challenges, conserving biodiversity, and promoting sustainable development. By leveraging financial resources and tools, it aims to align economic incentives with conservation goals, demonstrating that environmental stewardship can be both financially viable and environmentally beneficial.

Corporate Governance refers to the systems and processes by which a company is controlled and directed. It includes the structure and functioning of the board of directors, its committees, and the roles of key officers such as the CEO and CFO. It also concerns itself with issues like the rights of shareholders, transparency, accountability, and disclosure of information.

In the context of Environmental, Social, and Governance (ESG), corporate governance specifically deals with the 'Governance' aspect. It becomes important in assessing a company's ethical standards, risk management strategies, and leadership effectiveness, all of which can impact the long-term sustainability and success of a company. It also involves ensuring that corporate practices align with societal expectations and norms, thereby reducing potential conflicts with shareholders, employees, customers, and the broader community.

Corporate Social Responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social, and environmental benefits for all stakeholders. It is a concept where companies integrate social and environmental concerns in their business operations and interactions with their stakeholders on a voluntary basis.

In the context of Environmental, Social, and Governance (ESG), CSR falls primarily under the 'Social' component, but also touches on 'Environmental' and 'Governance' aspects. For example, a company's CSR initiatives might involve reducing its carbon footprint, improving labor practices, contributing to educational and social programs, or ensuring transparent corporate governance.

CSR Reporting, also often referred to as Sustainability Reporting, is the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance towards the goal of sustainable development. This is a broad concept that can include everything from environmental stewardship to employee rights and community development.

CSR Reporting involves providing a detailed account of the initiatives and programs undertaken by a company related to its social, economic, and environmental impacts. This includes how a company's operations affect stakeholders such as employees, customers, communities, and the environment.


Decarbonisation refers to the process of reducing and ultimately eliminating carbon dioxide emissions produced by a country, industry, or company. This is primarily achieved by reducing the reliance on fossil fuels that emit carbon dioxide when burned, such as coal, oil, and gas. Decarbonisation strategies often involve shifting towards renewable sources of energy like wind, solar, and hydro power, improving energy efficiency, and developing technologies to capture and store carbon.

Discloser  - is a comprehensive ESG reporting platform that provides faster, more compliant, and collaborative reporting with unparalleled flexibility, designed to fit your unique business needs.

Divestment - often refers to the strategy of selling investments that are not aligned with ESG principles. For instance, this could mean divesting from companies or industries that have a large carbon footprint, do not uphold social responsibilities, or have poor governance practices.

Divestment can be a tool for investors to manage their ESG-related risks, express their social or ethical values, and exert pressure on companies to improve their practices. An example of this is fossil fuel divestment, where funds and investors remove stocks, bonds, or investment funds that are connected with companies extracting fossil fuels, as a response to climate change concerns.

DJIA (Dow Jones Sustainability Index) - is a family of indices evaluating the sustainability performance of thousands of companies trading publicly around the world.  The DJSI considers various factors including corporate governance, risk management, branding, climate change mitigation, supply chain standards, and labor practices. It uses a 'best in class' approach, analyzing companies across each industry to identify leaders in the field of sustainability.

The DJSI offers investors a way of gauging the impact of sustainability factors on a company's long-term value. It provides a benchmark for investors who wish to invest in companies that are leaders in adopting sustainable practices, thus demonstrating a commitment to ESG principles.

Double Bottom Line - is a business term that refers to the measurement of business performance based on two categories: social impact and financial performance. The "double" bottom line means that business success is not just about profit (the traditional bottom line), but also the positive social impact a company generates.

The Double Bottom Line can be seen as a precursor to the more holistic concept of the Triple Bottom Line, which adds 'Environmental' performance as a third metric alongside 'Social' impact and 'Financial' performance. However, even under the Double Bottom Line approach, many of the social considerations can overlap with environmental and governance issues.


Ecosystem Services - refer to the multitude of benefits that humans freely gain from the natural environment and from properly-functioning ecosystems. These include services such as clean water, air, fertile soil, timber, and fish, as well as less tangible benefits like climate regulation, flood mitigation, pollination of crops, and recreational opportunities. Ecosystem services can be grouped into four main categories: Provisioning Services, Regulating Services, Cultural Services, and Supporting Services.

Environmental Impact Assessment (EIA) -  is a process that evaluates the potential environmental effects that a proposed project may have on the natural surroundings. The goal of an EIA is to ensure that decision makers consider environmental impacts before deciding whether to proceed with new projects.

Environmental Justice - Environmental Justice is the principle that all people have the right to enjoy clean air, pure water, and to live, work, learn, and play in an environment that is safe, healthy, and free from life-threatening conditions, irrespective of their race, national origin, or income.

The concept emerged in response to the disproportionate environmental burdens (like pollution and waste disposal) often borne by marginalized communities, and the disparities in access to environmental benefits, such as clean air and water, green spaces, and healthy food.

Environmental, Social and Governance (ESG) - is a set of standards for a company’s operations that socially conscious investors use to screen potential investments.

  • Environmental criteria consider how a company performs as a steward of nature. This could include a company's energy use, waste, pollution, natural resource conservation, treatment of animals, and compliance with environmental regulations.
  • Social criteria examine how a company manages relationships with employees, suppliers, customers, and the communities in which it operates. This could involve aspects such as employee relations, diversity, working conditions, human rights, consumer protection, and community development.
  • Governance deals with a company’s leadership, executive pay, audits, internal controls, shareholder rights, and transparency about corporate governance. Essentially, it covers the corporate policies and procedures that guide the day-to-day operations and long-term strategic planning of the company.

Investors who apply ESG criteria believe that these factors can affect a company's profitability, risk profile, and societal impact. ESG factors have increasingly been integrated into investment decision-making processes, with many investors and fund managers believing that companies with strong ESG profiles may perform better financially and represent lower risks.

Equator Principles or EPs - The Equator Principles (EPs) are a risk management framework, adopted by financial institutions, for determining, assessing, and managing environmental and social risk in projects. They are primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.

The Equator Principles offer a framework for banks and other financial institutions to assess and manage the environmental and social risks associated with the projects they finance, playing a key role in promoting sustainable and responsible financial practices.

ESG Analysis - refers to the examination of a company's environmental, social, and governance (ESG) factors with the goal of assessing its ethical impact and sustainability practices. This can be used by investors to enhance traditional financial analysis by identifying potential risks and opportunities that are often overlooked in financial reporting.

ESG Analysis aims to provide investors with a more comprehensive understanding of the non-financial factors that can impact a company's financial performance, reputation, and long-term sustainability. Investors can use ESG analysis to guide decision-making, align investments with their values, and potentially enhance returns and minimize risk.

ESG Data Convergence Initiative (EDCI) stands as an unprecedented, industry-guided endeavour initiated by the private equity sector. Its primary aim is to streamline and unify significant ESG metrics, which in turn, would lead to the production of comparative, performance-driven ESG data.

ESG Engagement - refers to the process of investors and shareholders actively interacting with companies on environmental, social, and governance (ESG) issues. The objective is to encourage companies to improve their ESG practices, enhance their performance on ESG metrics, and better manage ESG risks.

ESG Engagement is a proactive strategy that enables investors to contribute to positive change and promote sustainable business practices. It is an integral part of a comprehensive ESG investment strategy, complementing other approaches such as ESG integration, screening, and thematic investing.

ESG Fund - is  a type of investment fund that selects assets based primarily on Environmental, Social, and Governance (ESG) criteria. ESG funds aim to generate competitive financial returns while also having a positive societal impact.

The assets within an ESG fund can range across various asset classes, industries, and regions, and the fund itself can come in different forms such as mutual funds, ETFs, or hedge funds.

ESG Integration - the practice of incorporating environmental, social, and governance (ESG) factors into investment analysis and decision-making processes. The goal of ESG integration is to improve long-term returns and mitigate systemic risks.

ESG Integration recognizes that ESG factors can have a material impact on a company's performance and can therefore affect investment returns. By integrating ESG factors into their analysis, investors aim to make more informed investment decisions and better manage risk. It represents a more holistic approach to investing that considers a wide range of factors beyond just financial metrics.

ESG Rating -  is a measure of a company's performance in environmental, social, and governance (ESG) areas. These ratings are often produced by specialized ESG research and data firms, and provide investors with standardized evaluations of a company's ESG risks, practices, and performance.

Investors can use ESG ratings to guide their investment decisions, align their portfolios with their values, manage risk, and engage with companies on ESG issues. However, given the variation in ratings methodologies, it's important for investors to understand how each ratings firm defines and measures ESG performance.

EU Taxonomy Regulation - is a classification system established by the European Union for sustainable economic activities. Introduced as part of the EU's Sustainable Finance Action Plan, the Taxonomy Regulation provides a framework to help investors, companies, issuers, and project promoters navigate the transition to a low-carbon, resilient, and resource-efficient economy.

The taxonomy is a tool to help investors understand whether an economic activity is environmentally sustainable, and to navigate the transition to a low-carbon economy.

European Union Non-Financial Reporting Directive (NFRD), also known as Directive 2014/95/EU, is a regulation that requires certain large companies in EU member states to disclose non-financial and diversity information. It was adopted in 2014 and has been in effect since the 2018 reporting season.

The directive applies to large public-interest entities (which can include listed companies, banks, insurance companies, and other companies that are so designated by Member States) with more than 500 employees. 

The purpose of the NFRD is to increase the transparency and consistency of the non-financial information provided by companies, to help investors, consumers, policy makers, and other stakeholders to make more informed decisions.

European Union Sustainable Finance Taxonomy -  is a classification system established by the European Union to define what economic activities can be considered environmentally sustainable. The aim is to guide investors, companies, and policymakers towards investments and activities that are compatible with a low-carbon, climate-resilient economy.

The EU Taxonomy is a key component of the EU's Action Plan on Sustainable Finance, which aims to reorient capital flows towards sustainable investment, manage financial risks stemming from climate change and environmental degradation, and foster transparency and long-termism in financial and economic activity


Global Reporting Initiative (GRI) - is an international independent organization that has pioneered corporate sustainability reporting since 1997. GRI helps businesses and governments worldwide understand and communicate their impact on critical sustainability issues such as climate change, human rights, governance, and social well-being.

Essentially, the GRI provides a standardized way for organizations to report on their sustainability performance so that stakeholders, including investors, employees, customers, suppliers, and regulators, can make more informed decisions.

GRI Standards - represent the global best practice for reporting on a range of economic, environmental, and social impacts. They are designed to help organizations of all types, sizes, and sectors understand and communicate their impact on critical sustainability issues. The GRI Standards consist of a modular, interrelated structure, and are designed to be used as a set by organizations to report about their impacts on the economy, environment, and society.

The purpose of the GRI Standards is to promote transparency, accountability, and efficiency among organizations worldwide, and to help businesses, governments, and other organizations understand and communicate their impacts on sustainability issues. The Standards also enable organizations to contribute to and influence the sustainable development agenda. By using the GRI Standards, organizations can gain a clear view of their impacts, both positive and negative, enabling them to take steps to mitigate risks and capitalize on opportunities.

GHG Inventory is an account of the amount of greenhouse gases produced by a specific source over a fixed period. Greenhouse gases include a number of gases that contribute to global warming and climate change, such as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), among others.

GHG inventories are usually carried out by companies, cities, regions, or entire countries. They are crucial for understanding the source and amount of GHG emissions, and provide a baseline against which future emissions can be compared. This can help entities identify where reductions can be made, and track progress over time.

Green Bonds - are a type of fixed-income instrument that is specifically aimed at raising money for climate and environmental projects. These could be new or existing undertakings related to renewable energy, energy efficiency, pollution prevention, sustainable agriculture, fishery and forestry, the protection of aquatic and terrestrial ecosystems, clean transportation, sustainable water management, and the cultivation of environmentally friendly technologies.

Green bonds are typically asset-linked and backed by the issuing entity's balance sheet, so they usually carry the same credit rating as their issuers' other debt obligations.

Green Investing - also known as environmental investing, refers to the practice of investing in companies and projects that are committed to conserving natural resources, producing and discovering renewable energy sources, implementing or advancing environmentally friendly technologies, and other actions aimed at promoting sustainability.

Green investing can be a part of a broader strategy of socially responsible or ESG (environmental, social, governance) investing. But while ESG investing considers a range of ethical and societal factors, green investing specifically focuses on investments that are expected to have a positive impact on the environment.

Greenhouse Gases (GHGs) - are gases in the Earth's atmosphere that trap heat. They allow sunlight to enter the atmosphere freely, but when sunlight strikes the Earth's surface and is reflected back towards space as heat, greenhouse gases absorb this heat and trap it in the atmosphere. This process is known as the greenhouse effect.

The main greenhouse gases in the Earth's atmosphere are: Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), and Fluorinated Gases

Greenwashing - is a term used to describe the practice of conveying a false impression or providing misleading information about how a company's products, services, or operations are environmentally friendly or sustainable.

The term is derived from "whitewashing," which refers to providing a false or misleading picture of something to conceal unpleasant or incriminating facts. In a similar vein, greenwashing is the process of deceptively spinning products and policies as environmentally friendly, such as through misleading eco-labels or by making vague, unsubstantiated, or irrelevant claims.


Human Rights Watch - is an international non-governmental organization that conducts research and advocacy on human rights. The group pressures governments, policy makers, companies, and individual human rights abusers to denounce abuse and respect human rights, and it often works on behalf of refugees, children, migrants, and political prisoners.

In the ESG space, HRW plays an important role in highlighting human rights abuses and social injustices. Their reports and advocacy can help inform investment decisions and corporate policies, with a view to ensuring respect for human rights and social justice. It provides valuable information for stakeholders seeking to ensure their actions and investments are aligned with human rights standards.


IIRC - The International Integrated Reporting Council - is a global coalition of regulators, investors, companies, standard setters, the accounting profession, and NGOs. It promotes communication about value creation as the next step in the evolution of corporate reporting.

ISS - Institutional Shareholder Services - is a leading provider of corporate governance and responsible investment (RI) solutions, market intelligence, and fund services, and events and editorial content for institutional investors and corporations, globally. The company provides a variety of services, including operational software and services, proxy voting and governance research, and ESG (environmental, social, and governance) data, analytics, and research.

Impact Investing - refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. It can be seen as an extension of socially responsible investing but goes a step further by looking for businesses that can make a positive impact.

Impact investments provide capital to address social and/or environmental issues. They can be made in both emerging and developed markets and target a range of returns from below-market to market rate, depending on the investors' strategic goals.

Institutional Investors Group on Climate Change (IIGCC) - The Institutional Investors Group on Climate Change (IIGCC) is a European membership body for investor collaboration on climate change. It provides a platform for investors to collaborate and encourages public policies, investment practices, and corporate behavior that address long-term risks and opportunities associated with climate change.

Integrated Reporting or IR - is a holistic approach to corporate reporting that goes beyond the traditional focus on financial performance to include information on a company's environmental, social, and governance (ESG) performance.

The key goal of IR is to provide a comprehensive, multidimensional view of a company's performance and value creation over time. It seeks to explain how a company creates value not just financially, but also through its relationships, resources, and the environment in which it operates.

Intergovernmental Panel on Climate Change (IPCC) -  is an international body that evaluates the state of climate science. It was established in 1988 by two United Nations organizations, the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP), to provide policymakers with regular scientific assessments on climate change, its implications and potential future risks, as well as to put forward adaptation and mitigation options.

The IPCC's assessments often form the basis for company and investor strategies on climate change. They provide the underlying data that supports target setting, risk assessments, and disclosure around climate change.

International Energy Agency (IEA) - is a Paris-based autonomous agency within the framework of the Organisation for Economic Co-operation and Development (OECD) that works to ensure reliable, affordable, and clean energy for its member countries and beyond. Established in 1974 following the 1973 oil crisis, the IEA was initially designed to help countries coordinate a collective response to major disruptions in oil supply.

The IEA's mandate has broadened over time, and it now focuses on a full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management, and much more. The IEA acts as a policy adviser to its member countries and also works with non-member countries, especially China, India, and Russia.

International Sustainability Standards Board (ISSB) - is a self-governing entity within the private sector that takes on the responsibility for the creation and endorsement of IFRS Sustainability Disclosure Standards (IFRS SDS). Supervised by the IFRS Foundation, the ISSB came into existence in 2021 as a response to the growing need for universal sustainability standards and to clarify the role the Foundation could play in the development of these standards. This was accompanied by proposed changes to the IFRS Foundation Constitution to facilitate the establishment of a new sustainability standards board under its governance structure.

The ISSB typically consists of 14 members, some of whom serve on a part-time basis. The crucial prerequisites for membership in the ISSB are professional proficiency and applicable professional experience. Geographic representation is ensured with three members each from Asia-Oceania, Europe, and the Americas, one member from Africa, and four members from any region.

ISO 26000 - is an international standard developed by the International Organization for Standardization (ISO) that provides guidance on how businesses and organizations can operate in a socially responsible manner. This means acting in an ethical and transparent way that contributes to the health and welfare of society.

ISO 26000 was published for the first time in November 2010 and provides guidance rather than requirements, so it cannot be certified unlike some other well-known ISO standards. Instead, it helps clarify what social responsibility is, helps businesses and organizations translate principles into effective actions, and shares best practices relating to social responsibility, globally. It is aimed at all types of organizations regardless of their activity, size, or location.


Just Transition - is a concept that represents a set of principles, processes, and practices that ensure a fair shift to a low-carbon economy. It is a framework developed by the trade union movement to encompass a range of social interventions needed to secure workers' rights and livelihoods when economies are shifting to sustainable production. 

A Just Transition acknowledges that while the shift towards a low-carbon and climate-resilient economy (necessary to mitigate the worst impacts of climate change) is essential, it can lead to significant changes in employment and potentially negative social and economic implications for workers and communities in carbon-intensive industries.

MSCI, or Morgan Stanley Capital International is a leading provider of decision support tools and services for global investment communities. MSCI products include indexes, analytics, ESG tools, and real estate benchmarks and tools. MSCI is best known for its indexes, which are used worldwide as benchmarks for investment portfolios and to measure market performance.


Negative Screening is an investment approach that excludes certain sectors, companies, or practices from investment consideration due to specific environmental, social, or governance (ESG) criteria. This strategy allows investors to avoid industries and companies that may pose certain ethical, moral, or financial risks because of their business activities. Examples could include companies involved in the production of tobacco, fossil fuels, or weapons, or those that have poor labor practices or environmental violations.

Net-Zero refers to the balance achieved when the amount of greenhouse gases emitted into the atmosphere is equivalent to the amount being removed. This can be attained either by minimizing carbon emissions as much as possible through the use of renewable energy and energy-efficient technologies, or by enhancing carbon removal from the atmosphere through carbon capture and storage techniques or natural solutions such as reforestation. A net-zero target indicates a commitment to counteract all carbon emissions with carbon reductions or offsets, aiming to effectively reduce the company's or a country's carbon footprint to zero.

Net-Zero Target is a commitment made by a company, a city, a region, or even a country to reduce its greenhouse gas emissions to a level where the amount of carbon emitted is balanced by the amount removed from the atmosphere, effectively bringing its net carbon emissions to zero. This goal is typically set for a specific future date, such as 2050, and is a critical component of global efforts to mitigate the impacts of climate change. Achieving a net-zero target involves reducing emissions as much as possible and implementing measures to offset any remaining emissions, such as planting trees or using carbon capture and storage technologies.

Net0 is a climate action platform, designed to reduce emissions at scale. From emissions measurement to reduction planning and supplier engagement, the Net0 platform is rapidly becoming the centrepiece for the modern climate tech stack.

Non-Financial Reporting Directive (NFRD) is a mandate by the European Union that requires certain large companies to disclose information about their social, environmental, and governance performance. The objective is to enhance business transparency and accountability on non-financial issues such as their treatment of employees, respect for human rights, anti-corruption efforts, and environmental impacts. This directive enables stakeholders, including investors, to gain a more comprehensive understanding of a company's performance beyond the traditional financial metrics.


OECD MNEs, or Multinational Enterprises that operate in countries part of the Organisation for Economic Co-operation and Development (OECD), are required to adhere to the OECD Guidelines for Multinational Enterprises. These guidelines outline recommended principles and standards for responsible business conduct in areas such as environment, social issues, and governance.

From an environmental perspective, the guidelines encourage MNEs to consider sustainable development in their operations and to reduce the adverse impacts of their operations on the environment.

From a social perspective, MNEs are urged to respect human rights, foster local capacity building, and encourage community development.

In terms of governance, MNEs are expected to combat bribery, uphold transparency, engage with stakeholders, and respect the rule of law.

Therefore, OECD MNEs in the context of ESG refers to multinational enterprises that follow these OECD Guidelines to ensure their operations are environmentally sound, socially responsible, and governed in an ethical and transparent way.


Paris Agreement is a landmark international treaty adopted by nearly every nation at the 21st Conference of Parties (COP21) of the United Nations Framework Convention on Climate Change (UNFCCC) in December 2015. In the context of Environmental, Social, and Governance (ESG), it's a pivotal development.

The Agreement's main goal is to limit global warming to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius, compared to pre-industrial levels. To achieve this, countries have pledged to reach peak greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.

For businesses, the Paris Agreement signifies a global commitment to a transition towards a low-carbon economy. It creates regulatory, reputational, and physical risks, but also opportunities. Companies are expected to align their operations and strategies with the goals of the Agreement, including setting science-based targets for emissions reduction. The Agreement also encourages full disclosure of climate-related risks and opportunities, which is a key aspect of ESG reporting.

Paris Agreement Capital Transition Assessment (PACTA) is a free, open-source methodology that allows financial institutions to assess the alignment of their portfolios with various climate scenarios. Developed by the non-profit think tank, Two Degrees Investing Initiative (2DII) in partnership with academic and NGO organizations and funding from European governments, PACTA offers a way to measure the alignment of equity and bond portfolios with the goals of the Paris Agreement on climate change.

The PACTA methodology helps to map the exposure of financial portfolios to transition risks and opportunities. It considers different sectors that are key in the transition to a low-carbon economy, such as power, automotive, and fossil fuels. Using the tool, investors can gain insights into how the companies they invest in are positioned for the transition and how their financial portfolios may need to change over time to remain aligned with the Paris Agreement's climate targets.

Partnership for Carbon Accounting Financials (PCAF) is a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the greenhouse gas emissions (GHG) of their loans and investments. By doing so, they aim to contribute to the Paris Climate Agreement's goal to limit global warming to well below 2 degrees Celsius.

The goal of the PCAF is to enable transparency and accountability and to assist financial institutions to assess climate risks and opportunities. Through the standardization of carbon accounting for different asset classes, financial institutions can better understand their impact on climate change and make more informed decisions. The PCAF's approach supports a variety of climate-related strategies and policies, including engagement, target-setting, and risk management.

Portfolio Tilting is an investment strategy where the weightage of certain assets within a portfolio is adjusted, or "tilted", towards sectors, industries or individual companies that score highly on environmental, social and governance (ESG) criteria. The strategy does not completely exclude any sectors or companies but over-weights the ones that align better with ESG principles.

This method is often used as an alternative to traditional methods such as negative screening, where certain sectors or companies are completely excluded based on their ESG performance. Portfolio Tilting allows investors to maintain a diversified portfolio while favoring ESG-compliant investments. It's part of a broader approach to incorporate ESG factors into investment decision-making and portfolio management, helping to manage risk and generate sustainable, long-term returns.

Poseidon Principles are a global framework for assessing and disclosing the climate alignment of ship finance portfolios. They establish a common, global baseline that allows for consistency and transparency in assessing whether a bank's lending portfolio is in line with adopted climate goals. These principles apply to lenders, relevant lessors, and financial guarantors including export credit agencies.

The Poseidon Principles specifically aim to enhance the role of maritime finance in addressing global environmental issues, particularly the goal of reducing the shipping industry’s greenhouse gas emissions. By signing up to the Poseidon Principles, institutions commit to measuring the carbon intensity and climate alignment of their shipping portfolios on an annual basis, with the results subject to independent verification and then disclosed publicly.

Positive Screening is an investment strategy that involves selecting stocks based on a company's performance on a set of positive ESG criteria. Investors seek to invest in companies that demonstrate exceptional performance in areas such as environmental sustainability, social responsibility, and strong corporate governance.

This approach is often contrasted with negative screening, where investors avoid companies that engage in certain activities deemed harmful or contrary to their ethical guidelines. Positive screening, on the other hand, emphasizes investment in companies that are making a positive impact. It allows investors to contribute to societal and environmental progress, while also potentially benefitting from the growing consumer and regulatory preference for sustainability.

Principles for Responsible Banking is a framework launched by the United Nations Environment Programme Finance Initiative (UNEP FI) in September 2019. It's designed to provide the banking industry with a single, comprehensive framework that embeds sustainability at the strategic, portfolio, and transactional levels across all business areas.

The Principles lay out the banking industry’s role and responsibility in shaping a sustainable future and aligns the sector with the objectives of the UN Sustainable Development Goals and the Paris Climate Agreement. They are as follows:

  1. Alignment: Banks commit to align their business strategy to be consistent with individuals' needs and society's goals, as expressed in the Sustainable Development Goals and the Paris Climate Agreement.
  2. Impact & Target Setting: Banks should continually increase their positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from their activities, products, and services.
  3. Clients & Customers: Banks will work responsibly with clients and customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
  4. Stakeholders: In order to achieve society's goals, banks will proactively and responsibly consult, engage, and partner with relevant stakeholders.
  5. Governance & Culture: To implement these Principles, banks should establish effective governance structures and implement a culture of responsible banking.
  6. Transparency & Accountability: Banks should periodically review their individual and collective implementation of these Principles and be transparent about and accountable for their positive and negative impacts and contribution to society’s goals.

Principles for Responsible Investment (PRI) is an international network of investors working together to implement a set of voluntary principles that provide a framework for integrating Environmental, Social, and Governance (ESG) considerations into investment decision-making and ownership practices. Endorsed by the United Nations, the six principles are:

  • Incorporating ESG issues into investment analysis and decision-making processes.
  • Being active owners and incorporating ESG issues into their ownership policies and practices.
  • Seeking appropriate disclosure on ESG issues from the entities in which they invest.
  • Promoting acceptance and implementation of the Principles within the investment industry.
  • Working together to enhance their effectiveness in implementing the Principles.
  • Reporting on their activities and progress towards implementing the Principles.


Regenerative Agriculture is an approach to farming and grazing that focuses on improving and revitalizing soil health. It's predicated on a range of farming and livestock management practices that, among other benefits, reverse climate change by rebuilding soil organic matter and restoring degraded soil biodiversity. This results in both carbon drawdown and an improvement in the water cycle.

Companies investing in or implementing regenerative agricultural practices demonstrate a commitment to environmental sustainability and stewardship. These practices can reduce a company's carbon footprint, improve product quality, enhance resilience to climate change, and foster better relationships with communities, all of which align with the principles of responsible investment and can contribute positively to a company's ESG rating.

Renewable Energy Certificates (RECs) are tradable commodities proving that certain electricity is generated using renewable sources. In the ESG context, they play an important role in documenting and tracking the production of renewable energy. Each REC represents one megawatt-hour (MWh) of renewable electricity generated and delivered to the power grid.

Companies can purchase RECs to offset their non-renewable energy use, demonstrating their commitment to renewable energy and reducing their environmental footprint. This can significantly contribute to their ESG goals and enhance their reputation with stakeholders. However, the use of RECs should be part of a broader sustainability strategy, as the purchase of RECs alone does not reduce a company's direct emissions.

Renewable energy pertains to energy that is generated from natural resources that are continually replenished. This includes power derived from sunlight, wind, rain, tides, waves, and geothermal heat. From an ESG perspective, the use of renewable energy sources is crucial due to their low environmental impact, particularly in terms of greenhouse gas emissions. Investment in renewable energy technologies, their development and use, aligns with a company's environmental responsibility, demonstrating a commitment to sustainable operations and contributing to global efforts to mitigate climate change. The sourcing, development, and integration of renewable energy can also influence a company's ESG rating and attractiveness to investors.

Responsible investment is an investment strategy that considers ESG factors in addition to traditional financial metrics in investment decision-making processes. The goal is to generate both financial return and positive societal impact. This strategy can help identify potential risks and opportunities that might not be revealed through traditional financial analysis. Responsible investment can be achieved through various strategies including screening (exclusionary, positive, or negative), ESG integration, active ownership (through voting or engagement), impact investing, and thematic investing. It reflects a recognition that ESG factors can materially affect investment performance and acknowledges the relevance of sustainability to investor outcomes.


SEC Climate & ESG Task Force is an initiative launched by the U.S. Securities and Exchange Commission (SEC) to proactively identify ESG-related misconduct. The task force's primary focus is to identify any gaps or misstatements within the disclosure of climate risks under existing rules. It is responsible for scrutinizing and evaluating the practices of public companies, ensuring they meet the disclosure standards set by the SEC regarding climate change and wider ESG factors. By doing this, it aims to enhance transparency and consistency, making it easier for investors to compare and assess ESG risks across different companies. The task force also investigates any potential violations and proposes new initiatives to update existing SEC rules, policies, and guidance.

Science-Based Target (SBT) is a company's goals 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, as stated in the Paris Agreement on climate change. This type of target grounding in scientific data provides companies with a clearly defined pathway to future-proof growth and sustainability by specifying how much and how quickly they need to reduce their greenhouse gas emissions. SBTs are validated by the Science Based Targets initiative (SBTi) to ensure they are in line with the latest climate science.

Scope 1, Scope 2, Scope 3 emissions are defined as follows:

  • Scope 1 Emissions: These are direct greenhouse gas (GHG) emissions that occur from sources that are controlled or owned by an organization. Examples include emissions from combustion in owned or controlled boilers, furnaces, vehicles, and emissions from chemical production in owned or controlled process equipment.
  • Scope 2 Emissions: These are indirect GHG emissions from consumption of purchased electricity, heat, or steam. They relate to the energy used by an organization that is produced by a third party, typically through burning fossil fuels.
  • Scope 3 Emissions: These are all other indirect emissions not included in Scope 2 that occur in the value chain of the reporting company, including both upstream and downstream emissions. This can involve a range of activities such as business travel, procurement, waste disposal, and use of sold products and services.

Understanding and managing these emissions are critical to an organization's ESG efforts as they directly impact climate change. Investors and stakeholders are increasingly interested in an organization's full carbon footprint, including all three Scopes, to assess its environmental impact and progress towards sustainability goals.

Socially Responsible Investing (SRI) is an investment strategy that considers not only financial returns but also social and environmental impact. In the context of Environmental, Social, and Governance (ESG), SRI involves investing in companies that demonstrate adherence to a set of ethical, social, and environmental standards.

SRI investors typically avoid investing in businesses involved in industries like fossil fuels, weapons, tobacco, and gambling, viewing these as harmful to society or the environment. Instead, they favor companies that promote environmental stewardship, consumer protection, human rights, and diversity.

SRI can be implemented using various strategies, such as positive or negative screening of companies, shareholder activism, and community investing. The goal of SRI is not just to generate financial returns, but also to promote positive societal change. Despite its ethical focus, numerous studies suggest that SRI can achieve competitive financial returns alongside its societal impact.

Sustainable Development Goals (SDGs) are a collection of 17 global goals established by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030. These goals, ranging from No Poverty and Zero Hunger to Responsible Consumption and Production, and Climate Action, form a blueprint for achieving a more sustainable future.

In the context of ESG, the SDGs serve as a guideline for companies to align their sustainability strategies and reporting practices. They provide a clear framework for businesses to demonstrate their contribution to sustainable development and showcase how their operations, strategies, and investments are making a positive impact. By aligning their ESG efforts with the SDGs, companies can also highlight their commitment to global priorities, gain a competitive edge, and attract socially conscious investors.

Sustainable Finance Disclosure Regulation (SFDR) is a European Union regulation that came into effect in March 2021. It aims to increase transparency in the finance sector about how sustainability risks are integrated into investment decisions and advisory processes. SFDR requires financial market participants and financial advisers to disclose specific information regarding their approaches to the integration of ESG risks and opportunities.

Key elements include the disclosure of adverse impacts of investment decisions on sustainability factors and the transparency of information related to the sustainability characteristics or objectives of financial products. In essence, SFDR is a major step towards making sustainability risks and opportunities central to financial decision making and preventing greenwashing.

Sustainable Finance is the incorporation of environmental, social, and governance factors into business or investment decisions, with the aim to create long-term competitive financial returns and positive societal impact. This approach recognizes that financial performance is not solely dependent on economic conditions, but also on the successful management of these non-financial ESG factors.

Sustainable finance covers a broad spectrum of considerations including climate change, resource depletion, corporate governance, and social inequality. It encourages transparency and disclosure, pushing companies and investors to consider risks and opportunities related to ESG issues, and promote more resilient and sustainable markets.

Instruments like green bonds, sustainable bonds, ESG funds, and social impact bonds are key components of sustainable finance. It is also supported by a wide array of regulations and voluntary guidelines such as the UN Principles for Responsible Investment (PRI), the Task Force on Climate-Related Financial Disclosures (TCFD), and the EU's Sustainable Finance Disclosure Regulation (SFDR).

The Sustainability Accounting Standards Board (SASB) is an independent, non-profit entity that sets standards to guide the disclosure of financially material sustainability information by companies to their investors. SASB standards are designed to improve the effectiveness and comparability of corporate disclosure on environmental, social, and governance (ESG) factors.

SASB identifies sustainability issues that are likely to affect a company's financial condition, operating performance, or risk profile. It develops sector-specific standards that help companies disclose these sustainability metrics in a way that is useful for investors and other stakeholders. By utilizing these standards, companies can provide more meaningful and relevant information about their performance and prospects in a world where ESG factors are increasingly pertinent.


Task Force on Climate-related Financial Disclosures (TCFD) is a global, market-driven initiative, established by the Financial Stability Board. It aims to increase and standardize company disclosures of climate-related financial information, to help investors, lenders, and insurance underwriters manage climate risks and opportunities.

TCFD encourages firms to disclose how they assess climate-related risks and opportunities in four key areas: governance, strategy, risk management, and metrics and targets. Disclosures recommended by the TCFD are forward-looking, incorporating scenario analysis, and are intended to be incorporated into mainstream financial filings.

For companies, implementing TCFD recommendations can improve risk management processes and provide clarity to investors about how they are managing climate-related risks and opportunities. For investors, it provides more reliable and consistent data for financial decision-making.


United Nations Framework Convention on Climate Change (UNFCCC) is a critical international environmental treaty that provides a framework for managing greenhouse gas emissions to combat climate change. In the context of ESG (Environmental, Social, and Governance), the UNFCCC is important as it drives global regulatory standards and norms around climate change mitigation.

Adopted in 1992, the UNFCCC has led to several important international agreements, including the Kyoto Protocol and the Paris Agreement, which set specific targets and timelines for reducing emissions. Companies that align their ESG strategies with the objectives of the UNFCCC can demonstrate commitment to global climate goals, manage climate-related risks, and seize opportunities arising from the transition to a low-carbon economy. The UNFCCC also plays a significant role in driving transparency and disclosure of climate-related risks, as detailed in guidelines by groups such as the Task Force on Climate-related Financial Disclosures (TCFD).


Value Reporting Foundation (VRF) is a key organization in the ESG landscape that aims to simplify the corporate reporting landscape by integrating the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB). The foundation provides comprehensive resources for business reporting to help businesses and investors make more informed decisions. Its objective is to offer a globally accepted framework for connected, consistent, and comparable sustainability disclosure standards, helping companies communicate their full value creation story and investors to assess ESG risks and opportunities effectively.


Water Footprint is a measure of the total volume of fresh water used directly or indirectly by a company to produce goods and services. This includes water used in manufacturing processes, in the supply chain, and in the overall operations of a company. Evaluating a company's water footprint provides insights into its water efficiency and the potential risks it faces due to water scarcity. As a part of a company's ESG performance, a lower water footprint can indicate better resource efficiency, less exposure to water-related risks, and a stronger commitment to sustainability.

Sofia Fominova
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