This page describes vocabulary applicable to any ESG Reporting Framework. Find below equivalent pages to describe framework-specific vocabulary.
Ecovadis
CDP
BCorp
IFRS
A
Assurance: Independent evaluation of the accuracy and reliability of sustainability reports and data.
Auditor Independence: The requirement that auditors reviewing sustainability reports must be independent from the company they are auditing, ensuring unbiased verification of the ESG disclosures.
B
Biodiversity: The variety of life in the world or a particular habitat.
C
Circular Economy: An economic system aimed at eliminating waste and the continual use of resources.
Climate Change: Long-term alteration of temperature and typical weather patterns in a place.
Compliance: Adherence to laws, regulations, guidelines, and specifications relevant to sustainability reporting.
Compliance Statement: A declaration included in the sustainability report confirming that the company complies with the ESG Framework requirement.
Consultation Process: The period during which stakeholders, including companies, investors, and civil society, can provide feedback on draft ESG Framework content developed by a specific institution (e.g. EFRAG for CSRD).
Corporate Governance: The system by which companies are directed and controlled.
D
Disclosure Requirement (DR): Specific information that companies are mandated to disclose under the CSRD, detailing various aspects of their sustainability performance.
Datapoints / Indicator: Specific quantitative or qualitative data required to be reported under a specific ESG Framework to provide measurable insights into a company's sustainability practices.
Due Diligence: The investigation or audit of a potential investment or product to confirm all facts.
E
Eligibility: Criteria that determine which companies are required to comply with a particular ESG Framework or Standard.
Emissions: The act of releasing something, especially gas or radiation.
Environmental Impact: The effect of human activities on the environment.
ESG: Environmental, Social, and Governance. A set of criteria used to measure the sustainability and ethical impact of a company.
External stakeholders: individuals or groups outside the organization who can affect or are affected by its activities. It includes (mong others) Investors and Lenders, Suppliers, Consumers, NGOs or even Regulatory Authorities. External stakeholders are vital for providing feedback and perspectives that help shape the company's sustainability strategies and reporting practices. They are also very important to determine the company's financial materiality analysis.
F
Financial Materiality: Information that could influence the economic decisions of users.
G
Global Reporting Initiative (GRI): An international independent standards organization that helps businesses and governments understand and communicate their impacts on critical sustainability issues.
Governance Disclosures: Part of the DR under CSRD, requiring companies to disclose their governance structures, policies, and practices related to sustainability.
Greenwashing: Misleading consumers about the environmental practices of a company or the environmental benefits of a product or service.
H
Human Rights: Rights inherent to all human beings.
I
Impact Materiality: Part of the double materiality concept, focusing on the significant impacts a company has on the environment and society.
Impact Reporting: Disclosure of the positive and negative impacts a company has on the environment and society.
Internal Stakeholder: individuals or groups within the organization who are directly involved in its operations and decision-making processes, and should be involved in the ESG reporting project as contributors mostly for double materiality or collection of information. They typically include employees, management representatives, consultants included within internal teams or even Board Members.
K
Key Performance Indicators (KPIs): Quantifiable measures used to evaluate the success of an organization in achieving objectives.
L
Lifecycle Assessment (LCA): A technique to assess environmental impacts associated with all the stages of a product's life.
M
Mandatory Assurance: The requirement for third-party verification of disclosed sustainability information to ensure accuracy and reliability.
Materiality Assessment: A process for companies to identify and prioritize the most relevant sustainability issues to be reported, considering both financial and impact materiality.
N
Natural Capital: World's stocks of natural assets which include geology, soil, air, water, and all living things.
O
Operational Boundaries: The limits within which a company’s sustainability impacts are measured and reported, including all operations under the company’s control or influence.
P
Public Interest Entity (PIE): refers to companies of significant public interest due to their size, number of employees, or nature of business, which are subject to stricter reporting requirements.
Q
Quantitative Metrics: Numerical data to measure a company’s sustainability performance, such as greenhouse gas emissions, energy consumption, and water usage.
R
Reasonable Assurance: A higher level of assurance provided by auditors where they conduct more extensive tests and procedures to verify the accuracy of sustainability disclosures.
Reporting Framework: The structured approach that companies must follow to prepare their sustainability reports.
Risk Assessment: The evaluation of potential risks related to sustainability that companies must disclose under some ESG Frameworks.
S
Scope 1, 2, and 3 Emissions: Categories of greenhouse gas emissions. Scope 1 are direct emissions, Scope 2 are indirect emissions from purchased energy, and Scope 3 are all other indirect emissions.
Social Impact: The effect of an organization's actions on the well-being of the community.
Sustainable Development Goals (SDGs): A collection of 17 global goals set by the United Nations to address global challenges.
Sustainability Report: A comprehensive document that companies must produce annually, detailing their sustainability performance and compliance.
T
Task Force on Climate-related Financial Disclosures (TCFD): An organization that develops voluntary, consistent climate-related financial risk disclosures for companies.
Transparency: The quality of being open and honest. It involves clear, accurate, and comprehensive reporting of sustainability information.
V
Value Chain: The full range of activities that businesses go through to bring a product or service to their customers.
Value Chain Reporting: Under some ESG frameworks, companies must disclose information about their entire value chain, including upstream and downstream activities, to provide a comprehensive view of their sustainability impact.
X
eXtensible Business Reporting Language (XBRL): A standard for digital business reporting that allows companies to tag their financial and sustainability data, making it easier to compare and analyze.