GREEN key terms

A reporting framework that evaluates organizational performance across three dimensions: profit (economic), people (social), and planet (environmental). It pushes beyond financial results to show how activities affect stakeholders and ecosystems.

The principle that a sustainability issue matters enough to influence stakeholder decisions and therefore must be measured and disclosed. Thresholds differ between financial materiality, which affects enterprise value, and impact materiality, which affects people and environment.

A two-way view requiring companies to report both how sustainability matters affect their financial performance and how their operations affect society and the environment. It underpins European sustainability reporting standards.

Misrepresenting or exaggerating environmental credentials through misleading claims, selective disclosure, or vague language so that stakeholders overestimate a product's or company's sustainability performance. It erodes trust and can trigger regulatory sanction.

The practice of deliberately under-reporting or staying silent about credible sustainability achievements, often to avoid scrutiny or accusations of greenwashing. It reduces transparency and slows the spread of proven practices.

A structured process of identifying parties affected by or interested in an organization, then consulting them to understand concerns, priorities, and expectations. Outputs inform materiality assessment, project design, and grievance mechanisms.

Seventeen global goals adopted by the United Nations in 2015, covering poverty, health, education, energy, climate, and ecosystems with targets for 2030. Organizations map activities and finance to these goals to demonstrate contribution.

A gas that absorbs and re-emits infrared radiation, trapping heat in the atmosphere. Key examples are carbon dioxide, methane, nitrous oxide, and fluorinated gases, each with a different atmospheric lifetime and warming strength.

A factor expressing how much heat a gas traps over a chosen period relative to carbon dioxide. Methane, for instance, is far more potent over 20 years than over 100 years, so the time horizon must be stated.

A common unit that converts emissions of different greenhouse gases into the warming effect of an equivalent mass of carbon dioxide, using global warming potentials. It allows aggregation across a portfolio or inventory.

Direct greenhouse gas emissions from sources owned or controlled by the reporting organization, such as fuel burned in boilers, furnaces, and company vehicles, plus fugitive leaks from equipment.

Indirect emissions from purchased electricity, steam, heating, or cooling consumed by the organization. They can be reported using location-based or market-based methods, which may produce materially different totals.

All other indirect emissions in an organization's value chain, both upstream such as purchased goods and business travel, and downstream such as product use and disposal. They often dominate a company's total footprint but rely on estimates.

An emissions reduction goal consistent with what climate science says is needed to limit warming, typically aligned with a 1.5 degree or well-below 2 degree pathway. It is validated against defined criteria rather than set arbitrarily.

A state in which anthropogenic greenhouse gas emissions released to the atmosphere are balanced by removals over a defined period. Reaching it requires deep emission cuts first, with residual emissions neutralized by durable removals.

The cumulative quantity of carbon dioxide that can still be emitted while keeping warming below a specified limit with a given probability. It translates temperature goals into a finite allowance for planning.

A credit representing one tonne of carbon dioxide avoided, reduced, or removed elsewhere, purchased to compensate for emissions that remain after reduction efforts. Quality depends on additionality, permanence, and verifiability.

The test of whether an emission reduction or removal would not have happened without the project or finance in question. Weak additionality undermines the credibility of offsets, credits, and labeled financial products.

The potential for harm from climate-related hazards such as floods, heatwaves, droughts, and sea-level rise, whether acute events or chronic shifts. It affects assets, supply chains, and communities directly.

The financial and operational exposure arising from the shift to a low-carbon economy, including policy changes, carbon pricing, technology shifts, and reputational pressure. It can strand assets or raise costs faster than expected.

A method of exploring plausible future climate and policy pathways to test how strategies and assets perform under uncertainty. Common reference scenarios include low-warming and high-warming trajectories over multi-decade horizons.

A debt instrument whose proceeds are earmarked exclusively for eligible environmental projects such as renewable energy, clean transport, or habitat restoration, and which commits to reporting on use of proceeds.

A bond whose financial characteristics, such as the coupon, can change if the issuer meets or misses predefined sustainability performance targets. Proceeds are for general purposes rather than earmarked projects.

The stated allocation of funds raised by a labeled instrument, describing which project categories are eligible and how unallocated balances are managed. Clear tracking and reporting are central to investor trust.

An independent assessment of a financial instrument's sustainability framework, evaluating alignment with market principles and the credibility of eligible projects or targets. It is published alongside the instrument before issuance.

Investment made with the explicit intention to generate measurable positive social or environmental outcomes alongside financial return. Managers commit to defining, measuring, and reporting that impact.

The practice of incorporating environmental, social, and governance factors into investment analysis and portfolio construction as financially relevant information, rather than applying them as a separate screen.

An asset that loses value prematurely because of regulatory, market, or technological change, such as fossil fuel reserves that cannot be burned under climate policy. The concept informs transition risk assessment.

An economic model designed to keep materials in use through reuse, repair, remanufacturing, and recycling, while regenerating natural systems. It contrasts with the linear take-make-dispose pattern by minimizing waste and resource extraction.

A structured method for quantifying environmental impacts of a product or service across raw material extraction, production, use, and end-of-life. Results depend heavily on system boundaries and assumptions, so scope must be disclosed.

A policy approach making producers financially or physically responsible for the end-of-life management of their products and packaging. It creates incentives for design that is durable, repairable, and recyclable.

A ranked order of waste management options, usually prevention first, then reuse, recycling, recovery, and disposal last. It guides policy and project design toward the greatest resource and emission savings.

A formal process that predicts the likely environmental effects of a proposed project before approval and identifies mitigation measures. It typically includes public consultation and feeds into permitting decisions.

A structured set of processes, responsibilities, and controls an organization uses to manage environmental aspects, comply with obligations, and improve performance over time. It is commonly certified against the ISO 14001 standard.

The idea that where serious or irreversible harm is possible, lack of full scientific certainty should not justify postponing cost-effective measures to prevent it. It shapes environmental regulation and project screening.

A framework for ensuring that the shift to a low-carbon economy is fair to workers and communities, through retraining, social protection, and new economic opportunities. It links climate action with labor and equity concerns.

The recognized rules protecting workers, covering freedom of association, collective bargaining, elimination of forced and child labor, non-discrimination, and safe working conditions. They derive from international conventions and national law.

An ongoing process by which a business identifies, prevents, mitigates, and accounts for how its activities may harm people's rights. It covers operations, suppliers, and business relationships, and includes grievance channels.

The right of Indigenous peoples and affected communities to give or withhold agreement to projects affecting their lands, resources, or livelihoods, based on full information and before activities begin. It is consent, not mere consultation.

A formal channel through which workers, communities, or other affected parties can raise complaints about project or company conduct and seek remedy. Effective mechanisms are accessible, transparent, and free from retaliation.

The degree to which a governing board's directors are free from relationships that could compromise objective oversight of management. Independent directors strengthen challenge, risk oversight, and accountability to shareholders.

Situations where a person's private interests or outside roles could improperly influence decisions made in a professional or fiduciary capacity. They are managed through disclosure, recusal, and approval procedures.

The reporting of suspected wrongdoing, such as fraud, safety breaches, or environmental violations, by someone inside or close to an organization. Protected channels and anti-retaliation rules are essential to its effectiveness.

The legal obligation of a person entrusted with others' money or interests to act prudently, loyally, and in their beneficiaries' best interest. In finance it frames how sustainability factors may be considered.

The compliance and reputational exposure a firm faces when its marketing or disclosure overstates sustainability performance relative to verifiable evidence. Managing it requires substantiation, review, and consistent claims across channels.

A living record of identified risks with their likelihood, impact, owners, and mitigation actions. For green projects it typically includes climate, environmental, social, regulatory, and reputational categories.

A sequence applied to project impacts: avoid harm first, then minimize, then restore, and only lastly offset residual effects. Following the order prevents offsets being used to excuse avoidable damage.

The publication of environmental, social, and governance data and narrative in reports, filings, or dedicated sustainability statements. Frameworks and standards vary, so comparability depends on stating the basis used.

A loan whose margin or terms adjust according to the borrower's performance against agreed sustainability key performance indicators. It rewards measurable improvement rather than earmarking funds to specific projects.