Resources
The ESG regulation space can be quite overwhelming, we are here to make it simple.
Updated CSRD Guide
LkSG Checklist
LkSG solution guide
Parters, perspectives and best practices KW23
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Parters, perspectives and best practices KW21
Parters, pesrspectives and best practices KW17
Regulatory update KW15
LkSG Webinar
EU Taxonomy Webinar
LkSG Webinar
ESRS / CSRD Webinar
LkSG Webinar
LkSG Webinar
Materiality Factsheet
ESRS Factsheet
LkSG Factsheet
CO2 Footprint Factsheet
LkSG Factsheet
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1.5° warmer
Temperature trajectory in which global warming has reached and been limited to 1.5 degree Celsius above pre-industrial level. Several aspects play a role for the assessment of risk and potential impacts in a 1.5-degree Celsius warmer world including overshoot magnitude, emission reduction strategy, and policy. Even if all emissions were stalled, elements of the climate system would still be disturbed and temperature would continue to rise for decades, which is why limiting temperature surge has a big impact on the environment.
Adaptation (transformational)
Adjustment to actual or expected climate and its effects, to moderate harm. Transformational adaptation changes the fundamental attributes of a socio-ecological system in anticipation of climate change and its impacts.
Afforestation
Planting new forests on lands that did not contain them historically.
Avoided emissions
The amount of carbon (CO2e) emissions produced per unit of another metric, often GDP (gross domestic product) or energy consumption.
Black Carbon (soot)
Natural process mostly formed by the incomplete combustion of fossil fuels, biofuels, and biomass.
Baseline Scenario
Also called business-as-usual (BAU) scenario, it refers to scenarios that assume that no mitigation policies or measures will be implemented beyond those that are already in place.
Blue Carbon
Carbon captured by living organisms in coastal and marine ecosystems (mangroves, salt marshes, seagrasses), and stored in biomass and sediments.
Carbon budget
The global carbon budget refers to the estimated cumulative amount of global carbon dioxide emissions that are estimated to limit global surface temperature to a given level above a refence period. It also refers to the distribution of the carbon budget to the regional, national, and sub-national level based on considerations of equity, costs, and efficiency.
Carbon neutrality
This is achieved when carbon dioxide (CO2) emissions are offset by eliminating the same amount through other avenues, leaving you with a balance of zero, also called a zero-carbon footprint.
CDSB, Climate Disclosure Standards Board
An association of international non-profit organizations. The main objective of this association is to enrich corporate reporting with information on so-called natural capital. To achieve this, the CDSB provides guidelines for sustainable reporting.
Carbon Footprint
A measure of all greenhouse gas emissions caused directly and indirectly by a product, or a person, during a certain period of time (for example, during production). The greenhouse gases are usually converted into CO₂-equivalents, hence the name.
Climate target
Refers to a temperature limit, concentration level, or emissions reduction goal used towards the aim of avoiding manmade interference with the climate system. For example, national climate targets may aim to reduce emissions by a certain amount over a given time horizon.
CSRD, Corporate Sustainability Reporting Directive
A directive that will replace the NFRD (Non-Financial Reporting Directive). Like its predecessor, the CSRD also obliges companies in the EU to produce sustainability reports. However, it is more complex and comprehensive. It is to apply from 2024 but already refers to the 2023 financial year.
Climate Governance
The means for deciding, managing, implementing, and monitoring policies and measures. The more inclusive concept of governance recognizes the role of the public and private sectors.
Climate change
This refers to a change in the state of the climate that can be identified (e.g., by using statistical tests) by changes in the mean and/or the variability of its properties and that persists for an extended period, typically decades or longer.
Carbon cycle
Term used to describe the flow of carbon through the atmosphere, hydrosphere, and terrestrial and marine biosphere and lithosphere. In most literature, 1GtC=10^15gC.
CSR, Corporate Social Responsibility
Corporate Social Responsibility describes the idea that companies are responsible for their social impact. It is therefore based upon the proposition that companies need to maximise positive and minimise negative impacts.
Carbon price
The price for avoided or released CO2 or CO2-equivalent emissions (rate of carbon tax per ton emitted or price of emission permit). Carbon pricing enables to evaluate the economic costs of mitigation.
Carbon dioxide Capture and Storage
CSS refers to the process by which CO2 is separated, conditioned, compressed and transported to a storage location for long-term isolation from the atmosphere.
Climate feedback
Interaction in which a perturbation in one climate quantity causes a change in a second and the change in the second quantity ultimately leads to an additional change in the first. Negative feedback occurs when the initial perturbation is weakened by the changes it causes, and positive feedback is one in which the initial perturbation is enhanced.
CDP, Carbon Disclosure Project
A non-profit organisation that collects ecological data from companies and other institutions on the basis of voluntary reports. This includes, for example, water consumption and greenhouse gas emissions. The main goal of these efforts is a carbon-neutral and sustainable world.
Climate resilient pathways
Iterative process for managing change within complex systems to reduce disruptions and enhance opportunities associated with climate change.
Carbon sequestration
The process of storing carbon in a carbon pool such as blue carbon, CCS, carbon uptake or sink.
Carbon footprint
Expressed in CO2e, this is a measure of the exclusive total amount of greenhouse gas emissions equivalents (carbon dioxide, methane, nitrous oxide, fluorinated gases) that are directly and indirectly caused by an individual, activity or are accumulated over the life stages of a product.
Carbon Sink
Area that absorbs or holds more carbon than it gives off (forests, oceans, soil). Trees absorb about 20 tons of carbon dioxide per hectare each year.
Carbone Intensity
The quantity of emissions of CO2 released per unit of another variable such as GDP, output energy use or transport.
Corporate Sustainability
Corporate Sustainability is a term according to which companies must consider not only their economic growth but also their environmental and social impact. Corporate sustainability includes, among others: sustainable growth, areas of corporate social responsibility (CSR), and corporate accountability theory.
Carbon Dioxide
CO2 is a naturally occurring gas and by-product of burning fossil fuels (oil, gas, coal), of burning biomass, of land-use changes, and of industrial processes. It is the reference gas against which other greenhouse gases are measured and therefore had a global warming potential of 1.
Climate projection
Stimulated response of the climate system to a scenario of future emission.
Carbon offset
A reduction in greenhouse gas emissions, such as through reforestation or renewable energy projects, which is used to compensate for emissions produced elsewhere.
Carbon credit
A permit or certificate that allows the holder to emit a certain amount of carbon dioxide or other greenhouse gases. One credit typically represents the right to emit one metric ton of CO2e.
CO2e
Also said “carbon dioxide equivalent”, it is a unit for all the different greenhouse gases released into the environment that expresses their impact in terms of how much carbon dioxide would have the same effect.
Double materiality
A process in which companies consider both the impact of sustainability issues on their own business (outside-in) and the impact of their own business on sustainability issues (inside-out).
Decoupling
When economic growth is no longer strongly associated with consumption of fossil fuels. Relative decoupling is when both grow but at different rates. Absolute decoupling is where economic growth happens but fossil fuels decline.
Decarbonization
The process by which countries, individuals, or entities aim to achieve zero fossil carbon existence.
Deforestation
Conversion of forest to non-forest.
Due diligence
The careful examination of the strengths and weaknesses of an item/target. In the context of ESG, such an examination considers environmental, social, and governance aspects. Due diligence thus reveals risks, value enhancement potential and eliminates information disparities.
ESG criteria
Three criteria are to be increasingly addressed in companies and in doing so will lead to a more sustainable world. The criteria are environmental, social, and governance. To put it simply, the ESG criteria are intended to make companies more aware of their impact on the outside world, but also to combat internal inequalities.
EU Sustainable Development Strategy
A plan, first formulated in 2001. Its goal was to make the EU a more sustainable and resource-efficient place in the long term. In 2016, the EU Sustainable Development Strategy was finally adopted by the EU as part of a framework. It obliges all member states to comply with this framework.
EFRAG, European Financial Reporting Advisory Group
A non-profit association founded in 2001. Its main task is to support the European Commission with the integration of the International Financial Reporting Standards (IFRS). EFRAG, therefore, advises the European Commission on which of those standards to adopt in the European Union.
ESG
A term under which environmental (E), social (S), and governance (G) aspects of a company are evaluated and assessed by investors.
Ecosystem
Functional unit consisting of living organisms, their non-living environment, and the interactions within and between them.
Emission scenario
Plausible representation of the future development of emissions of substances that are radiatively active based on a coherent and internally consistent set of assumptions about driving forces and their key relationships.
Emission inventory
A database or comprehensive list detailing all sources of greenhouse gas emissions for a particular region, organization, or product over a specific period.
Framework
Policies set forth in a work, that establish practices of a particular field. In the context of ESG, these rulebooks mainly relate to reporting standards and practices. Frameworks thus make reports comparable and allow measurability in complex areas.
Feasibility
The degree to which climate goals and response options are considered possible and desirable. Depends on geophysical, ecological, technological, economic, social, and institutional conditions for change.
Green Deal
The European Green Deal is a concept that aims to make the European Union carbon-neutral by 2050. To this end, it addresses areas such as sustainable finance, energy supply, and infrastructure.
GHG Protocol, Green House Gas Protocol
An institution that sets standards for how greenhouse gases can be measured. This applies to private, and public sectors as well as to value chains and mitigation actions. The GHG Protocol is often used for reporting to the Carbon Disclosure Projects (CDP).
Greenwashing
A term used to describe a company's outward efforts to be particularly sustainable and ecological without actually being so. This can occur in connection with donations or special PR measures. For example, when a company donates large sums of money to a sustainable organization in order to conceal unsustainable production in the company.
GRI, Global Reporting Initiative
The Global Reporting Initiative is an organization that sets standards regarding critical ESG data. These standards help organizations and businesses be transparent and fully understand their impacts on climate change, human rights, and corruption.
Governance (all types and capacity)
A comprehensive and inclusive concept of the full range of means for deciding, managing, implementing, and monitoring policies and measures. The ability of governance to co-ordinate, fund, implement, evaluate, and adjust policies and measures over the short, medium, and long term, adjusting for uncertainty, rapid change and wide-ranging impacts and multiple actors and demands.
IFRS, International Financial Reporting Standards
Guidelines according to which companies should prepare their financial statements. They are issued by the International Accounting Standards Board (IASB) and are intended to facilitate internationally comparable financial statements.
Impact assessment
The practice of identifying and evaluating, in monetary and/or non-monetary terms, the effects of climate change on natural and human systems.
ISSB, International Sustainability Standards Board
A framework currently developed by the International Financial Reporting Standards Foundation (IFRSF). This framework is intended to serve as a global basis for sustainable disclosure. It covers all ESG topics and intents to lead to greater transparency, fairness, and equality in operations.
LCA, Life Cycle Assessment
A process by which the environmental impact of a particular thing is evaluated. LCA, therefore, helps you determine whether a product has had a particularly negative or particularly positive effect on the world. In understanding your impact on the environment, this is critical information – not only for customers but also for companies.
Mitigation measures
In policy, mitigation measures are technologies, processes or practices that contribute to mitigation such as renewable energies.
Maladaptive actions
Actions that may lead to increased risk of adverse climate-related scenarios, including via increased GHG emissions, increased vulnerability to climate change. These actions are usually unintended consequences.
Negative emissions
Removal of greenhouse gases from the atmosphere by deliberate human activities, in addition to the removal via natural carbon cycle processes.
Net zero CO2 emissions
Achieved when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removals over a specific period. For this report, the term will be used between quotation marks.
Net negative emissions
Situation when, because of human activities, more greenhouse gas emissions are removed from the atmosphere than are emitted into it.
Net Zero, Net Zero Carbon Emissions
A term that expresses climate neutrality. A net zero company, therefore, emits no CO₂. This means that the carbon dioxide emissions of a company have been calculated, contained, and offset. In this way, CO2 emissions caused can be weighed against those avoided.
NFRD, Non-Financial Reporting Directive
A directive requiring large, publicly traded companies to make sustainability disclosures. The directive was adopted in 2014 and has been mandatory in the EU since 2018. The directive is currently being reformed. The changes are expected to affect the 2023 financial year.
Non-Financial Statement
A report by a company that relates to non-financial information, such as environmental, social, or governance (ESG) Information. In the EU, the Non-Financial Reporting Directive (NFRD) requires public-interest companies with more than 500 members to prepare a Non-Financial Statement according to the NFRD criteria.
Pathways (RCPs)
The temporal evolution of natural and/or human systems towards a future state (quantitative of qualitative scenarios or narratives).
Reforestation
Planting of forests on lands that have previously contained forests but that have been converted to some other use.
Representative concentration pathways
Scenarios that include time series of emissions and concentrations of the full suite of GHGs, aerosols, and chemically active gases, as well as land use and land cover.
Reference period
The period relative to which anomalies are computed.
Sustainability Report
A report in which companies prepare ESG data for external parties and present it in a comprehensible form.
SDGs
The 17 global goals for development for all countries established by the United Nations through a participatory process and elaborated in the 2030 Agenda for Sustainable Development.
SASB, Sustainability Accounting Standards Board
A non-profit organization that issues guidelines for sustainable accounting standards. It was founded in 2011. Since August 1, 2022, SASB has been integrated into the IFRS (International Financial Reporting Standards) Foundation. Its standards have been under the supervision of the ISSB (International Sustainability Standards Board) since then.
Sustainable maturity
A term that evaluates companies in terms of their environmental, social, and governmental awareness and resulting actions. By determining sustainable maturity, companies obtain information on their current status, open potentials, risks, and challenges regarding sustainable efforts.
Sequestration (or uptake)
The addition of substance of concern to a reservoir.
Supply Chain Act
The Supply Chain Act or Lieferkettengesetz is a law coming into force in 2023. It obliges German companies to take various measures for a more sustainable supply chain. These include, for example, a commitment to a grievance mechanism and compliance with human rights throughout the supply chain.
SDG, Sustainable Development Goals
17 goals aimed directly at prosperity, health, and peace on our planet. In 2015, all 193 member states of the United Nations (UN/UNO) committed to them. The overarching concern of these goals is to end poverty and oppression. To that end, the 17 points address education, health, inequality, economic growth, climate change, forest conservation, and ocean cleanup.
Scope emissions
The sources of GHG emissions: Scope 1: Direct emissions from owned or controlled sources. Scope 2: Indirect emissions from the generation of purchased energy. Scope 3: All other indirect emissions that occur in the value chain.
Taxonomy
A uniform method by which things can be divided into categories or classes. In the context of ESG, taxonomy is often meant in the context of the European Taxonomy Regulation. This regulation contains criteria for determining whether an economic activity is environmentally sustainable. As a result, companies that want to market a product as sustainable are required to comply with these specifications.
TCFD, Task Force on Climate-Related Financial Disclosures
A body established by the FSB (Financial Stability Board). Its task is to make proposals on the type of information that companies should disclose to investors and other stakeholders.
Temperature overshoot
Temporary exceedance of specified level of global warming (such as 1.5 degree Celsius).
Zero emission commitment
Climate change commitment that would result from setting anthropogenic emissions to zero. It is determined by both inertia in physical climate system components and carbon cycle inertia.
GRI
The 'Global Reporting Initiative' standards is a benchmark used internationally for sustainability reporting. It is structured as three complementary set of standards: Universal, Sector, and Topic. Based on materiality, users must report on the relevant indicators from all three standards.
Read moreUFLPA
The Uyghur Forced Labor Prevention Act prohibits the importation of goods into the United States manufactured wholly or in part with forced labor in China, especially from the Xinjiang region.
Read moreDNK
The German Sustainability Code is a non-financial reporting framework that aims to standardise sustainability performance disclosures. Compliance is achieved by reporting on 20 DNK criteria related to strategy and processes, environment, employee and society, and governance. Indicators are based on GRI or the European Federation of Financial Analysts Societies criteria.
Read moreISSB
The International Sustainability Standard Board, working under the IFRS foundation, has the intention of delivering a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make informed decisions.
Read moreEMAS
Developed by the European Commission, the Eco-Management and Audit Scheme is an environmental management tool that guides organizations to measure, report, and improve environmental performance. One of its purposes is to ensure transparency by users on their performance, benchmarked against a list of core indicators. ISO 14001 is integral to EMAS and EMAS users will achieve double compliance.
Read moreGRESB
The Global Real Estate Sustainable Benchmark assesses the sustainability of organizations in the real estate sector based on their ESG data.
Read moreSFDR
The Sustainable Finance Disclosure Regulation is a finance industry-specific directive that mandates financial institutions to report on their sustainability performance on two different levels: entity level and product level. Reporting criteria include remuneration and risk policies and the product information of ESG and non ESG-related products.
Read moreGHG Protocol
The Greenhouse Gas Protocol is a widely-used international standard for helping companies measure and understand emissions linked with their activities through the use of standardized approaches and principles.
Read moreSEC Climate Disclosure
Proposed legislation in the US that would make it mandatory for companies to disclose Scope 1 and 2 emissions in addition to climate-related risks and opportunities. The reporting requirements are strongly based on the TCFD’s four pillars and adopt a phase-in approach with other indicators such as Scope 3 emissions.
Read moreESRS
The European Sustainability Reporting Standards are a set of standards that provide a common framework for companies to comply with the European Corporate Sustainability Reporting Directive (CSRD).
Read moreEU Taxonomy
The EU taxonomy is a classification system used by investors to identify economic activities or investments that are deemed sustainable. The taxonomy identifies industries with the highest impact potential and companies must demonstrate that they meet at least one of six environmental objectives to qualify.
Read moreLieferkettengesetz
The German Supply Chain Due Diligence Act makes it obligatory for companies to do proper due diligence in order to assess and manage risks within their supply chain. Companies are held responsible for human rights and environmental violations that occur along the supply chain.
Read moreROSI
The 'Return on Sustainability Investment' is a metric used to measure the financial return on investment from sustainability initiatives, taking into account both financial and non-financial benefits.
Read moreNFRD
The Non-Financial Reporting Directive requires large EU companies to publicly disclose ESG information and management of ESG risks. It is meant as a framework to assess the non-financial information of a company and was amended in 2021 into the Corporate Sustainability Reporting Directive.
Read moreCDP
The 'Climate Disclosure Project' framework focuses on environmental disclosures especially climate change, water security, and deforestation. The disclosure system facilitates investor and stakeholder understanding of the environmental performance of a company.
Read moreFrench Loi de Vigilance
French companies with more than 5,000 employees are required to develop a due diligence and vigilance plan demonstrating appropriate measures taken to prevent and avoid human rights and environmental harm caused by their business activities.
Read moreTCFD
The 'Task Force on Climate-related Financial Disclosures' recommendations is a guideline for climate disclosures. Users report on climate-related risks and opportunities, the potential impacts of climate change including financial impact, mitigation and adaptation strategies, governance of climate risks, and metrics and targets used to manage risks and opportunities.
Read moreBritish SDRs
A planned framework to broaden sustainability disclosures in the UK, integrating climate reporting and other environmental indicators into one. SDRs emphasise the double materiality concept and will entail new labelling and reporting requirements for companies held by UK-registered funds.
Read moreSBTis
Science-based targets are a scientific approach to target-setting for emissions reductions that aligns with the Paris Agreement. The initiative provides supporting resources to calculate emission reduction targets in order to limit warming to 1.5C. It then assesses and approves targets submitted by companies.
Read moreSASB
The 'Sustainability Accounting Standards Board' standards are a set of industry-specific sustainability accounting standards that provide guidance for companies to disclose financial material sustainability information to investors.
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