Glossary

The ESG terms that come up most.

Plain-English definitions of the emissions, reporting and governance terms you'll meet while implementing an emissions management platform. Cite freely.

Scope 1 emissions: Direct greenhouse-gas emissions from sources owned or controlled by an organisation — for example, fuel combustion in company-owned vehicles, on-site industrial processes, and fugitive emissions from refrigerants.
Scope 2 emissions: Indirect emissions from purchased energy — primarily electricity, but also heating, cooling and steam. Reported using location-based and market-based methods.
Scope 3 emissions: Indirect emissions across the value chain that the organisation does not own or control. Includes purchased goods and services, transportation and logistics, business travel and employee commuting, waste, use of sold products, and investments. Typically the largest portion of a corporate footprint.
Emission factor: A multiplier that converts activity data (e.g. litres of diesel) into greenhouse-gas emissions (e.g. kgCO₂e). Factors vary by activity type, geography, time period and emissions methodology.
Activity data: The underlying operational data that drives emissions calculations — fuel volumes, electricity consumption, kilometres travelled, money spent on goods and services, and so on.
Audit trail: A complete, time-stamped record of who submitted, reviewed, approved and acted on each data point and calculation. Essential for surviving assurance and regulatory scrutiny.
GRI (Global Reporting Initiative): The most widely-used sustainability reporting framework globally. Provides universal standards plus topic-specific standards for economic, environmental and social disclosures.
SASB (Sustainability Accounting Standards Board): Industry-specific sustainability accounting standards focused on financially-material ESG topics. Now part of the IFRS Foundation alongside ISSB.
TCFD (Task Force on Climate-related Financial Disclosures): A framework for disclosing climate-related financial risks across four pillars: governance, strategy, risk management, and metrics & targets.
EU Taxonomy: The European Union's classification system for environmentally sustainable economic activities. Used to determine which corporate activities qualify as sustainable for disclosure under the SFDR and CSRD regimes.
SBTi (Science Based Targets initiative): An organisation that defines and certifies corporate emissions-reduction targets that are aligned with climate science — typically a 1.5°C or well-below-2°C trajectory.
ISSB (International Sustainability Standards Board): Part of the IFRS Foundation, the ISSB issues globally-applicable sustainability disclosure standards (IFRS S1 and S2) to give investors comparable, decision-useful information.
Net Zero: A state in which an organisation's residual greenhouse-gas emissions are balanced by an equivalent amount of carbon removals — typically achieved through deep reductions plus high-quality offsetting of unavoidable residual emissions.
Location-based method (Scope 2): Calculates emissions from purchased electricity using grid-average emission factors for the region where consumption occurs.
Market-based method (Scope 2): Calculates emissions from purchased electricity based on the actual energy product the organisation has contracted (e.g. renewable energy certificates, power purchase agreements).
Materiality assessment: The process of identifying which ESG topics are most significant to an organisation and its stakeholders — informing reporting priorities and strategy.
Double materiality: A framing used in EU disclosure regimes that considers both how sustainability issues affect the organisation financially (financial materiality) and how the organisation affects people and the environment (impact materiality).
Assurance (ESG): Independent third-party verification of an organisation's sustainability disclosures, providing limited or reasonable assurance that the data and claims are accurate.
Carbon accounting: The systematic measurement and tracking of greenhouse-gas emissions across an organisation's operations and value chain.
Audit-ready: A state in which emissions data, methodologies and calculations are sufficiently documented, traceable and consistent to withstand third-party assurance.