Demystifying Common Sustainability Terms
To help you navigate the world of sustainability and the alphabet soup of acronyms we have provided this list of sustainability terms:
| Term | Definition |
|---|---|
| Afforestation | This involves planting trees in areas where there were none before. |
| Biodiversity | The variety of life on earth and the systems supporting it, such as plants, animals and micro-organisms and the ecosystems where they live. |
| Carbon credit | This is a permit allowing the owner to emit a specific amount of carbon dioxide or greenhouse gas. The units can be traded, offset or retired to achieve climate goals. Carbon credits can be compliance or voluntary. |
| Carbon footprint | The total greenhouse gas emissions caused directly or indirectly by an organisation, person, event or product. |
| Carbon neutral | If an organisation or activity is carbon neutral it does not add to the total amount of carbon dioxide in the atmosphere. This can be done by reducing emissions as much as possible, then any emissions which can't be eliminated can be offset using voluntary carbon offsets for example. This usually includes only scope 1 and 2 emissions, not scope 3. |
| CDP | The Carbon Disclosure Project is an international not for profit organisation which allows companies, regions and cities to disclose their environmental impact. It provides a disclosure system allowing tracking of climate change, water and supply chain sustainability. |
| Circular economy | This is a system where materials never become waste and nature is regenerated. Products and materials are kept in circulation due to recycling, maintenance, reuse, refurbishment, remanufacture and composting. It decouples economic activity from the consumption of finite resources. This is the opposite of linear economy. |
| CSR | The management of companies' impacts on society, it aims to maximise positive and minimise negative impacts. This may involve working with employees, the local community and society at large to improve their quality of life. |
| CSRD (Corporate Stainability Reporting Directive) | Corporate Stainability Reporting Directive. This is the European Union's reporting directive. Large and listed companies doing business in the EU need to report under this framework from early 2025. They need to share information on how they will monitor a considerable range of ESG issues and their impact on our planet. It impacts more companies than any other sustainability directive. It is expected to apply to small and medium companies at a later date. |
| Deforestation | The removal of forests, this usually causes biodiversity loss and contributes to climate change. |
| Double materiality | This concept examines financial materiality- how environmental and social issues impact a company and impact materiality- how a company impacts on society and the environment. It is often addressed in sustainability reports. |
| Energy efficiency | This involves reducing the amount of energy required to create a product or service or delivering the same service with less goods. It could be achieved by using more efficient lightbulbs or insulating a building better for example. |
| Fossil fuels | Sources of energy such as coal, oil or natural gas, formed in geological deposits from the carbon rich remains of prehistoric plants, microbes and animals. |
| ESG | Environmental, social and governance. It is the framework or set of standards used to measure an organisation's impact. The aim of ESG is to capture a firms non-financial risks and opportunities from a firm's day to day undertakings. |
| Greenwashing | To disseminate misleading information about a company's environmental performance to achieve a more favourable image. |
| GHG | Greenhouse gas. This refers to the gases in the atmosphere that raise the surface temperature of our planet, for example carbon dioxide, methane, nitrous oxide and chlorofluorocarbons. |
| GHG Protocol | This is the world's most widely used greenhouse gas accounting standard and a source of guidance. It can be used by companies and governments to measure their emissions support their goals. |
| ISSB | The International Sustainability Standards Board, which develops global sustainability standards such as IFRS Sustainability Reporting Standard. This framework is mandatory in some countries like Brazil and a voluntary standard in other jurisdictions. |
| LEED | This stands for Leadership in Energy and Environmental Design. It is a certification program offered by the US Green Building Council, it rates building and their phases: Design and construction, renovation and interior design. It has four levels: Certified, Silver, Gold and Platinum. |
| Life Cycle Analysis (LCA) | A systems-oriented approach to product design, it aims to calculate the total environmental impact of goods, processes or services throughout all stages of its life cycle, from 'cradle' to 'grave.' This is achieved through the compilation of an 'inventory' of energy and resource usage, emissions, waste generation and discharges. An LCA can be used to compare the relative environmental merits of particular product categories. |
| Lifecycle thinking | An approach taken which focuses on assessing and minimising environmental, social and economic impacts of a product throughout its life from creation to disposal. |
| Nature-based Solutions (NBS) | Measures taken to protect nature, natural processes and ecosystems, these measures should also address societal issues. |
| Net zero | This refers to when the amount of greenhouse gas emissions that are removed from the atmosphere are equal to those emitted by human activity. It refers to scope 1,2 and 3 emissions and all greenhouse gases, not just carbon. Companies must reduce emissions in line with science based targets, following a pathway to limit global temperature rises to 1.5 degrees Celsius. According to the Science Based Targets emissions must be reduced by up to 90% before relying on offsets. |
| Paris Agreement | A legally binding international treaty signed in 2015 on climate change. It was adopted by 196 parties at the UN Climate Change Conference (COP 21) in Paris. It initially aimed to hold "The increase in the global average temperature to well below 2°C above pre-industrial levels" and "to limit the temperature increase to 1.5°C by the end of this century. More recently world leaders have stressed the urgent need to limit global warming to 1.5°C by the end of this century. |
| Reforestation | This involves replanting in deforested areas. |
| SBTI | Science Based Target Initiative. This firm sets out clear, actionable targets for companies to help them align their emission reductions to the Paris agreement emission reduction goals. |
| Scope 1, 2 and 3 emissions | Scope 1 refers to direct emissions owned or controlled by a firms operations. Scope 2 refers to indirect emissions from purchased electricity, heat, cooling or steam. Scope 3 relates to indirect emissions from supply chains, transportation, product use and other indirect activities. Scope 3 emissions often account for 70-95% of a company's emissions. |
| SECR | Streamlined Energy and Carbon Reporting. This is a mandatory carbon and energy consumption reporting framework introduced by the UK government in 2019 for quoted or large companies. |
| Sustainability | It can be described as the ability to maintain or support economic, environmental or social processes over time without depleting natural or physical resources. |
| Sustainable development | The most quoted definition of sustainable development comes from the Bruntland Report in 1987 and is "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs". |
| Sustainable supply chain | This involves managing materials, information, and finances as they move through a supply chain with minimal environmental impact. |
| TCFD | Task Force on Climate-Related Financial Disclosures- this was created by the Financial Stability Board (FSB), It was established to develop recommendations for companies to disclose climate-related financial risks. It is mandatory for large and listed firms in the UK. |
| Triple bottom line | This is a business concept that focuses on measuring a company's commitment to environmental, social and economic performance. It can be summarised as People, Planet, Profit. It encourages firms to create positive impacts as well as focus on delivering profit. |
| Value chain | This concerns the value created by the supply chain at each stage, especially for end-use customers. |