Sustainability glossary: definitions of key terms and concepts for business

If you're stuck for a simple breakdown of the sustainability concepts, regulations, and organisations shaping the business world today, you're in the right place. This ever-growing list gives you a quick overview of the landscape.

Business acronyms, abbreviations, and terms explained

Carbon Disclosure Project (CDP)

CDP is a global environmental disclosure platform that enables companies, cities, states, and regions to measure and disclose their environmental impacts, including carbon emissions, water use, and deforestation. CDP collects data from thousands of organisations worldwide and provides insights to investors and other stakeholders.

Corporate Sustainability Reporting Directive (CSRD)

European Union (EU) legislation that requires EU businesses (and qualifying subsidiaries) to disclose their environmental and social impacts, and how their environmental, social and governance (ESG) actions affect their business. CSRD requires companies to report on their sustainability performance against the EU Taxonomy. Read about the context of CSRD and the benefits of CSRD on our blog.

Double Materiality

Double materiality assessment is the starting point for sustainability reporting under ESRS. It requires companies to disclose how environmental and social factors impact their business and how their operations affect society and the environment. This two-way assessment leads to a more comprehensive evaluation of sustainability.

Global Reporting Initiative (GRI)

GRI is an international organisation that promotes sustainability reporting. The GRI Standards are a framework for companies to report on their economic, environmental, and social performance. CSRD may not directly align with the GRI framework, companies subject to CSRD requirements may choose to use GRI Standards or principles to guide their sustainability reporting practices.

Greenhouse Gas (GHG)

GHG refers to gases in the Earth's atmosphere that trap heat, leading to the greenhouse effect and global warming. Common GHGs include carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O).

Environmental, Social, and Governance (ESG)

ESG refers to a set of criteria used to evaluate a company's performance and impact on environmental, social, and governance issues. Investors and stakeholders use ESG pillars to assess a company's sustainability and ethical practices.

EU Taxonomy Regulation

Introduced as part of the European Commission’s Sustainable Finance Package, EU Taxonomy requires companies to disclose the sustainability performance of their activities and must reflect this information in their CSRD disclosures. It took effect in 2021. As of January 2023, stakeholders are additionally obliged to adhere to the SFDR Regulatory Technical Standards (RTS), which offer more detailed guidelines for compliance.

European Banking Authority (EBA) – an ESA

Our mission is to contribute to the stability and effectiveness of the European financial system through simple, consistent, transparent, fair regulation and supervision that benefits all EU citizens.

European Financial Reporting Advisory Group (EFRAG)

A private association established in 2001 to serve the public interest. While EFRAG itself does not have legislative authority, its recommendations and assessments carry significant weight in the European Union's decision-making process regarding accounting standards.

European Green Deal

The EU Green Deal is a comprehensive policy agenda to transform the European Union into a more sustainable, climate-neutral economy. It encompasses a wide range of measures and initiatives to tackle climate change, protect the environment, and promote sustainable growth. The EU Green Deal has targets across various sectors, including energy, transportation, agriculture, and industry, with the goal of achieving net-zero greenhouse gas emissions by 2050. It seeks to drive economic growth, create new jobs, and improve the quality of life for EU citizens while ensuring a just transition for the regions and industries most affected by the transition to a greener economy.

European Insurance and Occupational Pensions Authority (EIOPA) – an ESA

EIOPA is at the heart of insurance and occupational pensions supervision in the European Union; The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory institution.

European Securities and Markets Authority (ESMA) – an ESA

ESMA is the EU’s financial markets regulator and supervisor. ESMA’s mission is to enhance investor protection, promote orderly financial markets and safeguard financial stability.

European Single Access Point (ESAP)

ESAP is a centralised gateway for accessing public company information and financial disclosures across the European Union (EU). Developed by the European Commission, ESAP aims to streamline and simplify access to financial data (such as annual reports, financial statements, and other regulatory filings) for investors, analysts, regulators, and other stakeholders. Consolidating information from various national databases and regulatory authorities within the EU, ESAP enhances transparency, comparability, and accessibility of financial information for cross-border investment and decision-making.

European Single Electronic Format (ESEF)

Companies must file reports such as for CSRD and SFDR via the standardised European Single Electronic Format (ESEF) and digitally tag information by using Inline eXtensible Business Reporting Language (iXBRL) so that it is machine-readable for use in the European Single Access Point.

European Supervisory Authorities (ESAs)

The European System of Financial Supervision (ESFS) is a network cantered around three European Supervisory Authorities (ESAs), the European Systemic Risk Board, and national supervisors. Its main task is to ensure consistent and appropriate financial supervision throughout the EU. With growing demand for sustainability-related products and the rapidly evolving regulatory regimes and sustainability-related product offerings, the ESAs launched a Call for Evidence on greenwashing, the results of which informed the SFDR.

European Sustainability Reporting Standards (ESRS)

The EFRAG developed the ESRS to align with the Task Force on Climate-Related Financial Disclosures and Global Reporting Index. It outlines the metrics companies must report and how to report them.

Non-Financial Reporting Directive (NFRD)

An EU directive that required certain large companies to disclose information on environmental, social, and governance (ESG) matters in their annual reports. These disclosures typically covered policies, outcomes, risks, and key performance indicators (KPIs) related to sustainability. NFRD has been superseded by the Corporate Sustainability Reporting Directive (CSRD).

Science-Based Targets initiative (SBTi)

SBTi is a collaborative initiative that helps companies set science-based targets to reduce greenhouse gas emissions in line with the goals of the Paris Agreement. Science-based targets are emissions reduction targets that are consistent with limiting global warming to well below 2°C above pre-industrial levels.

Sustainable Development Goals (SDGs)

SDGs are a collection of 17 global goals set by the United Nations to address urgent global challenges and achieve sustainable development by 2030. Sometimes referred to as UN SDGs, the goals cover a range of social, economic, and environmental issues, including poverty, inequality, climate change, and clean energy. The goals are no poverty; zero hunger; good health and wellbeing; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry, innovation and infrastructure; reduced inequalities; sustainable cities and communities; responsible consumption and production; climate action; life below water; life on land; peace, justice and strong institutions; and partnerships for the goals.

Sustainable Finance Disclosure Regulation (SFDR)

ESG transparency in the realm of sustainable investments-- disclosures are required at both the entity level and the product level. The EU sustainable finance framework includes the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD), and the Sustainable Finance Disclosure Regulation (SFDR). CSRD and SFDR are aligned disclosure requirements.

Sustainability Accounting Standards Board (SASB)

The SASB is an independent, non-profit organisation that develops sustainability accounting standards for use by companies in disclosing material sustainability information to investors. SASB standards are industry-specific and focus on financially material ESG issues.

Task Force on Climate-Related Financial Disclosures (TCFD)

TCFD is a global initiative established by the Financial Stability Board (FSB) to develop voluntary, consistent climate-related financial risk disclosures for companies. It aims to help investors, lenders, insurers, and other stakeholders understand climate-related risks and opportunities. Their framework provides recommendations for disclosing climate-related information across governance, strategy, risk management, metrics, and targets. Its goal is to promote more effective risk assessments, improve market transparency, and enable more informed decision-making regarding climate change.

Triple bottom line

Sometimes referred to as the three Ps, the triple bottom line is a framework that evaluates a company's performance and success through the lens of people, planet, and profit (rather than profit alone). In also considering the environmental and social outcomes of the business, this approach encourages businesses to take a broader perspective on their operations and be accountable to all stakeholders, not just shareholders.