A-Z OF ESG TERMS2022-02-06T16:36:16+00:00

All subjects have their jargon and acronyms. These plain English definitions should help you navigate the topic with confidence.

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Alt-proteins: Alternative proteins, or meat alternatives, are plant-based or food-technology (‘clean meat’) alternatives to animal protein.

Anthropocene: Current geological age, viewed as the period in which human activity has been the dominant influence on climate and the environment.

Biodegradable: Capable of being decomposed by bacteria or other living organisms and thereby avoiding pollution.

Biodiversity: The variety of life on Earth, including all plant and animal species.

Biomass: Plant or animal material used for energy production, or in industrial processes as raw substance for various products. Types include purposely-grown energy crops, wood or forest residues, waste from food crops, horticulture, food processing, animal farming, or human waste from sewage plants.

Biomimicry: Emulating the models, systems, and elements of nature to solve complex human problems.

Blockchain: A digital record of transactions. The name comes from its structure, in which individual records called blocks are linked together in a single list, called a chain.

Carbon capture and storage (CCS): The process of capturing and storing carbon dioxide before it is released into the atmosphere.

Carbon credit: A permit which allows a country or organization to produce a certain amount of carbon emissions and which can be traded if the full allowance is not used.

Carbon dioxide: A naturally occurring gas in Earth’s atmosphere. It is the main greenhouse gas released by human activities such as burning fossil fuels and biomass, industrial processes, and land-use change.

Carbon footprint: The amount of carbon dioxide released into the atmosphere as a result of the activities of a particular individual, organization, or community.

Carbon offsetting: A carbon offset is a reduction in emissions of carbon dioxide or other greenhouse gases made to compensate for emissions made elsewhere. Offsets are measured in tonnes of carbon dioxide equivalent.

Carbon neutrality: Carbon neutrality refers to achieving net zero carbon dioxide emissions by balancing them with removal elsewhere or eliminating them altogether.

Carbon tax: A carbon tax is a tax levied on the carbon content of fuels, in sectors like transport and energy. Carbon taxes aim to reduce carbon dioxide emissions by increasing the price of fossil fuels and decreasing the demand for them. They are a form of carbon pricing.

Circular economy: A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.

Climate change: A significant change in climate persisting over an extended period of time, typically for a number of decades or more.

Climate crisis: A headline descriptor for the threat of dangerous and irreversible changes to the world’s climate.

Climate positive: Climate positive describes an activity that goes beyond achieving net zero carbon emissions to creating an environmental benefit by removing additional carbon dioxide from the atmosphere.

Closed loop: A system that does not accept inputs from, or create outputs to, another system.

Compostable: Capable of being used as compost. Compostable materials are materials that break down completely into non-toxic components (water, carbon dioxide, and biomass) that will not harm the environment.

Conscious consumerism: Increased consumer awareness of the impact of their purchase decisions on the environment and society.

COP: A Conference Of Parties is the governing body of an international convention – in this context to discuss global climate change.

Cradle to cradle: A sustainable business strategy that mimics the regenerative cycle of nature in which waste is reused. Building on the cradle to grave approach of decreasing waste, cradle to cradle goes a step further and attempts to eliminate waste altogether.

CSR: Corporate Social Responsibility is a management concept in which companies integrate social and environmental concerns into their business operations and interactions with suppliers and customers.

Doughnut economics: A visual framework for sustainable development – shaped like a doughnut – combining the concept of planetary boundaries with the complementary concept of social boundaries.

Downstream emissions: Emissions that occur in the life cycle of a material/ product after the sale by the producer (including distribution and storage, use of the product and end-of-life).

Earth overshoot day: This marks the date each year when humanity has exhausted nature’s budget for the year, as tracked by: footprintnetwork.org.

Ecosystem: A natural system consisting of all living organisms (plants, animals, and microorganisms) in a specific area functioning together.

Environmental footprint: The effect that a person, company, or activity has on the environment – for example, the amount of natural resources used and the amount of harmful greenhouse gases (GHGs) produced.

ESG: Environmental, Social, and Corporate Governance refers to the three central factors in measuring the sustainability and societal impact of financial investment in a company or business venture.

Ethical: Relating to beliefs about what is morally right and wrong

Fairtrade: Fairtrade refers to producers in developing countries being paid a fair price for their work by companies in developed countries. The price paid provides enough for producers to afford essentials such as food, education and healthcare.

Fossil fuels: Fossil fuels are made from decomposing plants and animals. They are found in the Earth’s crust and contain carbon and hydrogen, which can be burned for energy. Examples include coal, oil, and natural gas.

Frugal innovation: Frugal innovation or frugal engineering is the process of reducing the complexity and cost of goods and their production. It usually refers to removing nonessential features from goods such as cars or mobile phones to sell them in developing countries.

Global warming: The gradual increase in Earth’s average atmospheric and ocean temperatures.

Good Life Goals: The Good Life Goals (created by the World Business Council for Sustainable Development) are 17 suggestions that explain how individuals can change their personal behaviour to help achieve the equivalent Sustainable Development Goals. (see Sustainable Development Goals)

Great acceleration: A term refering to the world’s unprecedented growth since around the 1950s and, as a result, the unprecedented deterioration of the natural resources needed to fuel this growth.

Green recovery: Packages of environmental, regulatory and fiscal reforms to recover prosperity in a responsible way after the COVID-19 pandemic.

Greenhouse gases (GHGs): Atmospheric gases of human or natural origin that absorb and emit heat. This results in heat being trapped in the climate system. The main greenhouse gases in the atmosphere are carbon dioxide, nitrous oxide, methane, and water vapour.

Green growth: A path of economic growth that uses resources in a sustainable way (unlike traditional economic growth that typically does not account for environmental damage).

Greenwashing: To make people believe that your company is doing more to protect the environment than it really is.

Human capital: Value derived from employees: physical presence, knowledge, skills, abilities, intellectual capacity, spirituality, empathy, and passion.

Impact investing: Investments made with the intention of generating positive, measurable social and environmental impact as well as a financial return.

Inertia principle: This is a guiding principle of the circular economy, as introduced by Walter Stahel. “Do not repair what is not broken, do not remanufacture something that can be repaired, do not recycle a product that can be remanufactured. Replace or treat only the smallest possible part in order to maintain the existing economic value”.

LGBTQ: Acronym for lesbian, gay, bisexual, transgender and queer or questioning – terms are used to describe a person’s sexual orientation or gender identity.

Living wage: A wage that is high enough to maintain a normal standard of living in the relevant country.

Linear economy: A linear economy traditionally follows the “take-make-use-waste” plan. Raw materials are collected and transformed into products that are used until they are discarded as waste.

Manufactured capital: Infrastructure and tangible goods that an organisation owns (or leases) to produce its outputs.

Moral: Relating to the standards of good or bad behaviour, fairness, honesty, etc. that each person believes in, rather than to laws.

Natural capital: The world’s stocks of natural assets, which include geology, soil, air, water and all living things. From this humans get: food, drinking water, plants (for medicine, fuel, building materials), natural flood defences, carbon storage (peatlands, etc), pollination of crops from insects.

Natural capitalism: A global economy in which business and environmental interests overlap, recognizing the interdependencies that exist between the production and use of human-made capital and flows of natural capital.

Nature-based solutions: The use of nature to jointly tackle social and environmental issues, such as climate change, food and water security, pollution and disaster risk. For example, reforestation to act as a natural carbon capture and storage (CSS) facility.

Net zero: A state in which the activities of a company result in no net impact on climate from greenhouse gas emissions. This is achieved by reducing emissions to zero or counterbalancing their effect with an appropriate amount of carbon removal elsewhere in the business.

Organic: Relating to or derived from living matter.

Paris agreement: The Paris agreement, signed in 2016, was a United Nations convention on Climate Change that aimed to deal with greenhouse gas emissions.

Planetary boundaries: Set of nine parameters within which humanity can develop and thrive for generations to come, so long as they are not exceeded.

Recycling: The action or process of converting waste into reusable material.

Remanufacturing: To manufacture into a new product.

Repurposing: Finding a new use for an idea, product, or building.

Rewild: Restore an area of land to its natural state, either through the reintroduction of species that have been driven out or exterminated, or by returning the land to natural, usually non-agricultural use.

Science based targets initiative (SBTi): The Science Based Targets initiative champions science-based target setting to boost companies’ competitive advantage in the transition to the low-carbon economy. It is a collaboration between Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), and one of the We Mean Business Coalition commitments.

Sustainable: Able to continue over a period of time. In relation to the environment, causing little or no damage to the environment and therefore able to continue for a long time.

Sustainable Development Goals (SDGs): The 17 goals adopted by all United Nations Member States 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. (see Good Life Goals)

Stakeholder: In a corporation, a stakeholder is a member of groups without whose support the organization would cease to exist, as defined in the first use of the word in a 1963 internal memorandum at the Stanford Research Institute.

Tipping point: The critical point in a situation, process, or system beyond which a significant and often unstoppable effect or change takes place.

Upcycling: Upcycling, also known as creative reuse, is the process of transforming by-products, waste materials, or unwanted products into new materials or products perceived to be of greater quality – often through artistic or environmental value.

Upstream emissions: Emissions that occur in the life cycle of a material/ product up to the point of sale by the producer.