Glossary.

Everything you need to know about ESG management and Artificial Intelligence

A

  • Is the collection of detailed company data on specific activities that directly quantify resource usage or emissions. Examples are the Energy consumption (kWh), Fuel used (l), and Waste generated (kg). These values can then be converted into CO2e emissions.

  • Refers to the simulation of human intelligence processes by machines to perform tasks that typically require human intelligence, such as learning, reasoning, problem-solving, and language understanding.

B

  • Is short for Better World. Our main goal is to guide you to understand your environmental impact with effortless carbon accounting.

  • The variety of living organisms and ecosystems on Earth. Biodiversity is essential for ecosystem resilience, providing ecosystem services such as pollination, water purification, and climate regulation. Conservation efforts aim to protect and restore biodiversity to maintain healthy ecosystems and support sustainable development.

  • Renewable fuels derived from biological sources, such as plants, algae, and organic waste. Biofuels can be used to replace fossil fuels in transportation, heating, and electricity generation, reducing greenhouse gas emissions and dependence on non-renewable resources.

C

  • Quantifies the impact of an organization's business activities based on the emitted greenhouse gas emissions as CO2e emissions.

  • Tradable permit or certificate that represents the right to emit one ton of CO2e emissions. It is often used in emissions trading schemes, where companies or countries can buy and sell these credits to meet emissions reduction targets.

  • Also referred to as Greenhouse Gas emissions, are the CO₂e emissions released into the atmosphere from activities such as burning fossil fuels, industrial processes, and deforestation, contributing to global warming and climate change.

  • Is the calculation of CO2e emissions produced by a single person or group over a year.

  • Achieving a balance between the amount of CO2e emissions emitted and the amount removed from the atmosphere, resulting in a net-zero carbon footprint.

  • It is a reduction/removal of emissions of carbon dioxide (or other GHG)  to compensate for emissions made elsewhere.  It is a transferable financial instrument certified to represent an emission reduction that can then be bought or sold and is measured in tons of CO2e. Learn more about Carbon Offset here.

  • Instrument that captures external cost of CO2e emissions – costs related to climate change – and ties them to their sources through a price per CO2e emitted.

  • Price tag on **CO2e emissions, and therefore a type of carbon pricing.

  • It is a carbon tariff on carbon intensive products, such as cement and some electricity,  imported by the European Union.

  • Process in which a pure stream of carbon dioxide from industrial sources is separated, treated, and transported to a long-term storage location. Can be added after incineration plants for example.

  • Organization dedicated to improving how companies report climate-related information in their financial reports, helping investors and stakeholders make better-informed decisions. They develop frameworks and guidance for consistent and comparable disclosure of climate risks and opportunities, enhancing transparency and accountability in financial reporting.

  • In their annual report the Circularity Gap Reporting Initiative highlights the urgent need to transition to a circular economy. The goal is to inspire action and realize a global circular economy. The Circularity Gap Report is launched annually during The World Economic Forum's Annual Meeting in Davos.

  • Is a metric measure used to compare the emissions from various greenhouse gases based on their GWP (Global Warming Potentials), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming.

  • It is a translation factor that can be used to turn activity or spent-based data into total CO2e emissions. It is the value of how much CO2e is produced using one unit of a good or service.

  • COPs are convened under the UNFCCC, where Parties (governments) assess global efforts to advance the key Paris Agreement aim of limiting global warming to as close as possible to 1.5 °C above pre-industrial levels.

  • Made by the European Commission with the aim of fostering sustainable and responsible corporate behavior and to anchor human rights and environmental considerations in companies’ operations and corporate governance. Affects large EU companies.

  • A way for companies to self-regulate and take responsibility by integrating social, environmental, ethical, consumer, and human rights concerns into their business strategy and operations.

  • Requires companies to report on the impact of corporate activities on the environment and society in an ESG report and requires the audit of reported information.

D

  • Is a series of processes and tools that collect, transform, and move data from one or more sources to a destination, such as a database, data warehouse, or analytics platform.

  • Refers to the process of reducing or eliminating carbon dioxide (CO2) emissions from various sources, with the goal of mitigating climate change and transitioning to a low-carbon economy. This process involves implementing measures to reduce reliance on fossil fuels, increasing energy efficiency, transitioning to renewable energy sources such as solar and wind power, electrifying transportation, and adopting sustainable practices across industries.

  • Classified in scope 1, cover emissions that a company generates while performing business activities. In general, these are emissions that occur from the company’s owned and controlled assets.  

  • Refers to the dual consideration of how sustainability issues impact a company's financial performance (i.e., their materiality to the company) and how a company's activities impact the environment and society (i.e., their materiality to external stakeholders and the broader world). An analysis is conducted for an ESG report.

E

  • Measures human demand on Earth's ecosystems by calculating the amount of biologically productive land and water needed to sustainably support human activities, including resource consumption and waste production. It provides insight into our impact on the environment and helps guide efforts towards sustainability and conservation.

  • The private association that drafted the ESRS.

  • Approved in 2020, is a set of policy initiatives by the European commission. The overall goal is to make the European Union climate neutral by 2050 by reviewing old laws and making new ones while keeping their benefits for the climate in mind.

  • Release of gases or particles into the atmosphere, often as a result of human activities such as burning fossil fuels, industrial processes, agriculture, and transportation. These emissions can include greenhouse gases like carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and others, which contribute to global warming and climate change.

  • Structured frameworks adopted by organizations to manage environmental impacts, and enhance sustainability through policies, procedures, and monitoring. EMS frameworks often follow standards such as ISO 14001 to provide a structured approach to environmental management.

  • Danish term referring to the electricity consumption details provided to consumers by their energy suppliers. It includes information on usage patterns, billing details, and possibly energy-saving tips. Find more details about how it can be integrated in the BeWo Platform.

  • Defined by International Organization for Standardization (ISO), is a declaration that quantifies environmental information on the life cycle of a product to enable comparisons between products fulfilling the same function based on their LCA. Learn more about ESG and ESG Reporting here.

  • It is a set of aspects considered when investing in companies. The focus lies on taking environmental issues, social issues, and corporate governance issues into account.

  • An ESG framework will guide the direction of ESG reporting but does not provide a methodology for the collection of information, data, or the reporting itself. They are useful to use alongside ESG standards, or when a well-defined standard does not exist.

  • They determine how information and data are collected, and how a report needs to be produced (what topics and business areas to include). This way frameworks are more actionable, by ensuring comparable, consistent, and reliable disclosure.

  • Defines the content of the ESG reports required by the European Commission in the CSRD. Videos and documents describing the requirements can be found here.

  • Tradable permit under the EU ETS representing the right to emit one ton of carbon dioxide or its equivalent, aiming to regulate greenhouse gas emissions within the European Union.

  • Empowers the EU Commission to adopt delegated and implementing acts to specify how competent authorities and market participants shall comply with the obligations laid down in the regulation.

  • The classification system established by the European Parliament to clarify which investments are environmentally  sustainable to prevent greenwashing and help investors make sustainable choices.

  • Cap-and-trade system to control greenhouse gas emissions from industries in participating countries. Under the EU ETS, a cap is set on the total amount of certain greenhouse gases that can be emitted by covered entities, such as power plants, factories, and airlines.

F

  • Non-renewable energy sources that include coal, oil, and natural gas. Fossil fuels are major contributors to carbon dioxide (CO2) emissions when burned, making them a significant factor in climate change and environmental degradation.

G

  • Gases in the atmosphere that raise the surface temperature of  planets  such as the Earth. The Kyoto protocol declares 6 main ones: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride (SF6).

  • Gradual rise in Earth's temperature caused by human activities, like burning fossil fuels, which release greenhouse gases into the atmosphere, leading to climate change and environmental challenges.

  • Fixed-income financial instruments issued by governments, municipalities, corporations, or financial institutions to raise capital for projects and initiatives with environmental benefits. These projects can include renewable energy, energy efficiency, clean transportation, and other eco-friendly initiatives.

    The key feature of green bonds is that the proceeds are allocated exclusively to finance environmentally sustainable projects. Investors in green bonds seek financial returns while supporting environmentally responsible initiatives, making green bonds an important tool for financing the transition to a more sustainable economy.

  • It refers to the geographical focus of green bond investments. It shows that the money from these bonds is set aside for projects in certain places, focusing on environmental goals and making those areas better in a sustainable way. This way, the money raised goes to help the environment and support sustainability efforts in specific locations.

  • Refers to the segment of the financial market that deals with the issuance, trading, and investment in green bonds.

    This market involves different groups like companies, investors, and government agencies. It focuses on how green bonds are bought and sold, their prices, how easy it is to sell them, and how risky they are. It shows how more people are interested in investing in environmentally friendly projects and how financial tools are being created to support these initiatives.

  • Establishes comprehensive global standardized frameworks to measure and manage greenhouse gas emissions from private and public sector operations and value chains. It also offers standards for Product Life Cycles, cities, and mitigation goals. The standards can be found here

  • The publishing of an environmental claim about a product or service that cannot be backed up by evidence. To get a more detailed overview of this topic, read the BeWo whitepaper on Greenwashing.

  • Releases an international independent standards organization that helps organizations understand and communicate their impacts on issues such as climate change, human rights, and corruption.

  • The GWP of a gas measures its ability to trap heat in the atmosphere relative to CO2 over a certain period, usually 100 years. For instance, methane has a GWP of 28, therefore one ton of methane can trap 28 times more heat than one ton of CO2 over 100 years. The higher the GWP of a gas, the more it contributes to global warming.

I

  • Accounting standards constitute a standardized way of describing the company's financial performance and position so that company financial statements  are understandable and comparable across international boundaries.

  • Classified in scope 2 & 3, cover emissions that are generated on behalf of the company, such as energy purchase, or activities associated with the production and transportation of goods and services used by a company.

  • A reporting system that combines financial and ESG information clearly. It gives everyone a complete understanding of a company's performance, including its money matters and its efforts towards sustainability. The aim is to be transparent and accountable, helping people see how the company creates value and makes responsible decisions for the long term.

  • Founded by the IFRS to fill the demand for transparent financial-related sustainability disclosure by companies. Their key objectives are to develop standards for a global baseline of sustainability disclosures, to meet the information needs of investors, and to enable companies to provide comprehensive sustainability information to global capital markets.

  • International Standard Development Organization, which is composed of representatives from the national standards organizations of member countries. The ISO 14000 is a family related to environmental management.

K

  • Specific metrics used to assess and measure the ESG performance of an organization. These indicators help track progress towards sustainability goals, such as reducing carbon emissions, improving social equity, or enhancing corporate governance practices.

  • It was adopted in 1997 by the UNFCCC, committing industrialized countries and economies in transition to limit and reduce greenhouse gas emissions in accordance with agreed individual target.

L

  • Is a methodology for assessing the environmental impacts for all the stages of the life cycle of a commercial product, process, or service. ISO standards 14040 – 14049 cover this topic.

  • Describes technologies, practices, and lifestyles that minimize greenhouse gas emissions, particularly carbon dioxide. Transitioning to a low-carbon economy is essential for mitigating climate change and achieving sustainability.

M

  • In sustainability reporting and corporate responsibility, materiality refers to the significance or relevance of ESG issues to a company's business operations and stakeholders. Materiality assessments help organizations prioritize sustainability initiatives and disclose relevant information to investors and the public.

  • Involves actions taken to reduce or prevent the adverse impacts of human activities on the environment, particularly regarding climate change. This includes efforts to decrease greenhouse gas emissions, conserve natural resources, and implement strategies to adapt to changing environmental conditions.

N

  • It is achieved when a business minimizes greenhouse gas emissions and offsets any remaining emissions by methods like ocean and forest absorption. It means eliminating all possible carbon emissions and compensating for any remaining emissions through mitigation strategies beyond the value chain.

  • Adopted by the European Union in 2014 requiring certain companies to provide non-financial disclosure documents along with their annual reports. Is amended and updated by the CSRD 2022.

O

  • Refers to the excessive use of resources beyond what is necessary for human well-being and ecological balance. It often leads to environmental degradation, depletion of natural resources, and social inequalities.

P

  • Requires financial market participants under the SFDR to publish any impact of investment decisions and advice on ESG sustainability factors.

  • Legally binding international treaty on climate change at the COP21 in 2015. Its overarching goal is to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

  • Proposed by the European Commission to have a common way of measuring environmental performance. That and the Organization Environmental Footprint (OEF) are the EU recommended LCA based methods to quantify the environmental impacts of products (goods or services) and organizations.

R

  • Also called Certificates of Origin, they validate the purchase of renewable energy, crucial for reducing carbon footprints. These certificates confirm the source of energy, enabling platforms to classify electricity data as renewable, adjusting calculations accordingly. Learn more about how we certificate your energy here.

  • Refer to energy resources that are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat. These sources are sustainable and environmentally friendly because they do not deplete finite resources or produce harmful emissions during energy generation. Learn more about benefits to switch to renewable here.

  • Timeframe during which an organization compiles and presents data on its ESG performance and initiatives. This period allows stakeholders to assess the organization's progress toward sustainability goals and commitments, typically spanning a calendar year or aligning with financial reporting cycles. See how you can create and manage your Reporting Years BeWo.

S

  • One of the most popular standards for EGS reporting. Identifies the subset of environmental, social and governance issues most relevant to financial performance and enterprise value for 77 industries.

  • Categories used to classify greenhouse gas emissions in relation to their source.

    Understanding and categorizing emissions into these scopes helps organizations identify and prioritize areas for emission reductions and develop strategies to mitigate their overall carbon footprint. Learn more here.

  • Direct emissions that a company generates from company-owned and controlled resources. Examples of activities that can contribute to scope 1 emissions can include the generation of electricity, heat, or steam on-site; manufacturing of materials and products and transportation using vehicles owned or controlled by the company.

  • Classified as indirect emissions from purchased or acquired energy that is generated off-site and consumed by the company. Activities that can contribute to scope 2 emissions include purchased electricity, purchased heating, purchased cooling. All emissions in scope 2 are utility providers scope 1 emissions.

  • Indirect greenhouse gas emissions that occur from sources not owned or controlled by the reporting entity but are associated with its activities. This includes emissions from the entire value chain, such as purchased goods and services, business travel, employee commuting, and transportation and distribution of products.

  • Applies to financial market participants (investment firms, pension funds, …) and imposes disclosure obligations on them, including information about ESG policies, risks, impacts and performance. Also includes EU Taxonomy, which establishes specific environmental criteria relating to economic activities for investment purposes.

  • Is the collection of financial company data, reflecting the monetary expenditure on products and services. Examples are the total spend on electricity or business travel. These values can then be converted in CO2e emissions.

  • It is a voluntary and clearly defined pathway for companies to reduce their greenhouse gas emissions, and to keep global temperature increase well below 2 degrees Celsius compared to pre-industrial levels, as outlined in the Paris Agreement.

  • Refers to practices that meet the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable practices aim to conserve resources, minimize environmental impact, promote social equity, and support economic prosperity.

T

  • Initiative established to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.

U

  • It is a collection of 17 interlinked objectives designed to serve as a blueprint for peace and prosperity for people and the planet, now and into the future.

  • Has 198 parties that established a treaty that called for ongoing scientific research and regular meetings, negotiations, and future policy agreements designed to allow  ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.

  • It is an initiative from different United Nations agencies and provides information, analysis, and discussions on Voluntary Sustainability Standards at the intergovernmental level.

V

  • Rules and harmonized standards by the UNFSS that provide assurance a product follows certain sustainability metrics. They are catalysts of sustainable development by not just being a set of standards with mandatory practices but also going beyond to drive a change.

Z

  • Is a philosophy and goal aimed at minimizing waste generation and maximizing resource efficiency. It involves reducing, reusing, recycling, and composting materials to divert them from landfills and incinerators