Sustainability glossary

Glossary

Complex CSRD and sustainability terminology explained

Groundwater

Groundwater is the water found beneath the Earth's surface in the saturation zone, in direct contact with the ground or subsoil.

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Habitat

Habitat refers to the natural location or environment where an organism or population is found. It can also refer to the specific conditions needed by a species or its ecological niche.

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Habitat fragmentation

Habitat fragmentation is the process of dividing continuous habitats into smaller, isolated patches due to habitat loss. It can occur naturally or through human activities like forestry, agriculture, and urbanization.

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Harassment

Unwanted conduct related to discrimination that violates a person's dignity and creates a hostile or offensive environment based on protected grounds such as gender, religion, disability, age, or sexual orientation.

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Hazardous waste

Waste that exhibits any of the dangerous characteristics specified in Annex III of Directive 2008/98/EC of the European Parliament and Council on waste.

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High climate impact sectors

Sectors listed in Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council, as defined in Commission Delegated Regulation (EU) 2022/1288.

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IPCC

The IPCC (Intergovernmental Panel on Climate Change) is a scientific body established in 1988 by the UN and WMO. It assesses and synthesizes scientific research on climate change, providing policymakers with comprehensive information.

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IRO approach

IRO stands for Impacts, Risks, and Opportunities. They are factors that a company must identify and evaluate in its double materiality assessment (DMA).

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ISO 14001

ISO 14001 is an internationally recognized standard for environmental management systems (EMS). It provides a systematic framework for organizations to effectively manage their environmental impact, improve environmental performance, and demonstrate their commitment to sustainability.

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ISO 14064

ISO 14064 is a standard developed by the International Organization for Standardization (ISO) that provides guidelines for quantifying, monitoring, and reporting greenhouse gas (GHG) emissions and removals.

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Impact assessment

Evaluates how a company’s activities affect people and the environment.

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Impact drivers

Direct drivers of change, both natural and human-induced, have physical and behavioral impacts on nature. Indirect drivers alter and influence direct drivers, creating various relationships and impacts. Global indirect drivers include economic, demographic, governance, technological, and cultural factors, with institutions playing a significant role.

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Impact materiality

Under CSRD and ESRS, a matter is materially impactful if it has significant positive or negative effects on people or the environment across a company’s operations, value chain, products, or services - over the short, medium, or long term.

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Impacts

Impacts refer to the effects a company's operations and value chain have on the environment, people, and human rights. These effects can be positive or negative, intended or unintended, reversible or irreversible, and can occur over different time periods. Impacts indicate the company's contribution to sustainable development.

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Incident

A legal action or complaint filed with authorities, or a case of not following rules identified by a company through audits, monitoring, or grievance mechanisms.

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Incineration

Incineration is the process of burning waste at high temperatures, either with or without energy recovery.

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Independent board member

Independent board members are those who make decisions without being influenced by external factors or conflicts of interest. They must exercise objective judgment and not have any interests or relationships that could unduly influence their decision-making.

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Indigenous peoples

Indigenous peoples are not universally defined, but international agencies generally agree that they are distinct groups with their own customs and traditions, and a connection to a traditional area. Self-identification is a key criterion.

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Indirect GHG emissions

Indirect emissions refer to greenhouse gas (GHG) emissions that result from an entity's activities but occur at sources owned or controlled by another entity. These include both Scope 2 and Scope 3 GHG emissions.

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Installation

A fixed facility where activities that may impact emissions and pollution are conducted.

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Internal carbon price

Price is a tool used to evaluate the financial effects of changes in investment, production, and consumption, as well as potential technological advancements and costs related to reducing emissions in the future.

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Internal carbon pricing scheme

Internal carbon pricing is an arrangement that allows companies to factor in the cost of carbon emissions when making decisions. There are two types: shadow prices, which are theoretical costs used for assessment, and internal taxes or fees, which are charges based on emissions.

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Invasive or alien species

Alien species are introduced outside their natural distribution and can threaten biodiversity, food security, and human health. Invasive species modify ecosystems they are introduced to. A species can be alien without being invasive, and a native species can become invasive without being alien.

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Key Biodiversity Area (KBA)

Global Key Biodiversity Areas (KBAs) are sites that play a crucial role in preserving biodiversity in different ecosystems. These sites are identified based on 11 criteria, including threatened biodiversity, ecological integrity, and irreplaceability. The World Database of KBAs is managed by BirdLife International.

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LSME

LSME stands for Listed Small and Medium Enterprises. It is composed of SMEs, small banks and captive insurers that are required to report under CSRD.

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Land degradation

Biodiversity decline refers to the various factors causing the loss of species, ecosystem functions, and their benefits to humans, including the degradation of all land-based ecosystems.

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Land-system (change)

Land systems refer to the human use of land, including socio-economic, technological, and organizational aspects. It combines land-use activities with land cover characteristics observed from Earth.

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Land-use (change)

Land use refers to how humans utilize a particular area for various purposes, such as housing, farming, or industry. It is different from land cover, but changes in land use can result in changes in land cover.

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Landfill

A landfill is a site where waste is deposited onto or into land for disposal purposes.

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Legitimate representatives

Legitimate individuals, like elected trade union representatives or chosen representatives of affected stakeholders, who are recognized by law or practice and have the authority to represent and advocate for the interests of workers or other affected parties.

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Leverage

The capacity of an action to influence and transform the harmful actions of another party that contribute to negative environmental consequences.

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Lobbying activities

Activities aimed at influencing policy or legislation, including organizing events, participating in consultations, running communication campaigns, and producing research papers. These activities are carried out to influence decision-making processes of governments, regulators, and other institutions.

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Locked-in GHG emissions

Future greenhouse gas emissions estimates for an organization's main assets or products sold during their operational lifespan.

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Long-term value creation

A company’s ability to generate sustainable economic, social, and environmental value over time.

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Longevity

Designed to be long-lasting and easy to maintain, encouraging extended use. It also ensures that at the end of its life, the product can be recycled or reused without harming the environment.

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Marine resources

Marine resources refer to both living and non-living resources found in the oceans, such as minerals, gravels, and seafood products.

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Material opportunities

Sustainability-related opportunities that can positively influence financial outcomes. These include innovation, market trends, resource efficiency, or improved resilience, factors that affect cash flows, financing, or cost of capital over time.

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Material risks

Sustainability risks are negative financial impacts that can affect a company's cash flow, ability to obtain financing, or cost of capital in the short, medium, or long term.

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Materiality

Under CSRD, an issue is considered material if it meets the definition of impact materiality, financial materiality, or both.

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Materiality matrix

Visual tool used in CSRD reporting to rank sustainability topics by significance and prioritization. It combines impact and financial materiality, using Likert scales (1–5) to assess magnitude, from insignificant to significant, and likelihood, from very low to very high.

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Metrics

Metrics are qualitative and quantitative indicators used to measure and report on the effectiveness of sustainability policies and targets. They also help measure the impact on people, the environment, and the undertaking over time.

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Microplastics

Microplastics are small pieces of plastic that do not biodegrade and accumulate in the environment, including the sea. Their presence in water and potential impact on the environment and human health are growing concerns.

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Minimum Disclosure Requirement

A minimum disclosure requirement is the minimum amount of information that a company must include when reporting on its climate policies, actions, metrics, or targets, either through a standardized reporting system or on an individual basis.

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Natural resources

Natural assets are resources found in nature that can be utilized for economic purposes, such as production or consumption.

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Nature-based solutions

Actions that protect, restore, and sustainably manage ecosystems to address social, economic, and environmental challenges, while also providing benefits to human well-being, resilience, and biodiversity.

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Net Zero Emissions

Net zero emissions refers to the state in which the greenhouse gas (GHG) emissions produced by human activities are balanced by removing an equivalent amount of GHGs from the atmosphere.

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Net-zero target

Setting a net-zero target means reducing emissions in line with global goals and offsetting any remaining emissions by removing an equivalent amount of CO2 from the atmosphere. Sectoral variations may be allowed, but overall reductions must align with a recognized pathway.

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Non-employees

Non-employees in a company's workforce refer to both self-employed contractors and individuals provided by employment agencies (NACE Code N78).

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Non-listed SME

Small and medium-sized enterprises that are primarily not listed on the stock market. They are not covered by mandatory CSRD requirements, but are encouraged to adhere to voluntary reporting.

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Non-renewable energy

Non-renewable energy refers to energy sources that cannot be classified as coming from renewable sources.

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Omnibus Proposal

The Omnibus Proposal was published on February 26th, 2025 by the European Commission and outlines revisions to major ESG regulations including the CSRD, EU Taxonomy, and CSDDD.

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Operational control

Operational control refers to the authority of an organization to manage and oversee the activities and relationships of a specific entity, site, operation, or asset.

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Opportunities

Sustainability opportunities that have a positive impact on finances.

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Overtime

Overtime refers to the additional hours worked by an employee beyond their agreed-upon work schedule.

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Own workforce/own workers

Employees are individuals in a work relationship with a company. Non-employees can be independent contractors or individuals provided by companies engaged in employment activities.

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Ozone-depleting substances

The Montreal Protocol lists substances that harm the ozone layer.

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Packaging

Packaging refers to any materials used to contain, protect, handle, deliver, store, transport, and present goods, from raw materials to processed goods, throughout the supply chain.

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Pay

The total amount of money and benefits that a worker receives from their employer, including any additional or variable components. Pay level refers to the yearly and hourly pay, while median pay level is the amount that half of employees earn more than and half earn less than.

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Persons with disabilities

Individuals with disabilities who face obstacles that prevent them from fully participating in society on an equal level with others due to their impairments and various barriers.

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Physical risks

Nature-related physical risks are the result of an organization's reliance on natural systems and ecosystem services. These risks occur when natural systems are compromised, leading to changes in ecosystem conditions that organizations depend on. They are often associated with climate-related risks.

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Planetary boundaries

The concept of a safe operating space for humanity estimates the limits of Earth's processes that should not be exceeded to prevent harmful global environmental changes. These boundaries are quantified to guide sustainable actions.

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Policy

A policy is a set of objectives and principles that guide decision-making in an organization. It is implemented to address sustainability issues and is overseen by specific individuals. Policies are validated and reviewed according to governance rules and are carried out through action plans.

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Pollutant

Pollutant: A harmful substance, such as heat, noise, or chemicals, found in air, water, or soil that can negatively impact human health, the environment, property, or the enjoyment of the environment.

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Pollution

Pollution refers to the introduction of harmful substances into the air, water, or soil due to human activities. It can have negative effects on human health, the environment, property, and the overall enjoyment of the environment.

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Pollution of soil

Soil pollution refers to the introduction of harmful substances, vibrations, heat, or noise into the soil through human activities. This can cause damage to human health, the environment, property, and interfere with the use of the environment. Soil pollutants include inorganic and organic compounds, pesticides, and nitrogen and phosphorus compounds.

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Protected area

A designated area, legally protected, managed, and aimed at preserving nature, ecosystem services, and cultural values for the future.

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Purchased or acquired electricity, heat, steam, or cooling

"Acquired energy refers to when a company receives its electricity, heat, steam, or cooling from a third party. This can occur when a company, such as a tenant, does not directly purchase electricity but uses energy brought into their facility."

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Raw material

Raw or processed material used in the manufacturing of goods.

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Recognised quality standards for carbon credits

Quality standards for carbon credits ensure that they can be verified by independent third parties, have publicly available requirements and project reports, and meet criteria such as additionality, permanence, avoidance of double counting, and rules for calculating, monitoring, and verifying GHG emissions and removals.

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Recordable work-related injury or ill health

Work-related injury or ill health that causes death, time off work, restricted work, medical treatment, or loss of consciousness. Also includes significant injury or ill health diagnosed by a healthcare professional, even if it doesn't result in the above.

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Recovery

Waste-to-energy refers to any process that converts waste into a useful resource, either by replacing other materials or by preparing waste to fulfill a specific function, either within a facility or in the broader economy.

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Recycling

Waste recovery is the process of reprocessing waste materials into new products or substances. It does not include energy recovery or the reprocessing of materials for fuel or backfilling purposes.

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Remedy/remediation

Remediation refers to actions taken to offset or rectify the adverse effects caused by certain activities. This can include apologies, compensation, prevention measures, punitive measures, restitution, restoration, and rehabilitation.

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Renewable energy

Renewable energy sources include wind, solar, geothermal, ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas. These sources do not rely on fossil fuels and are sustainable for the environment.

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Renewable materials

Renewable materials are derived from quickly replenished resources, ensuring that the services they provide, along with other linked resources, are not endangered and can be accessed by future generations.

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Resource inflows

Input material used in a company's operations or processes.

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Resource outflows

Resource leaving the facilities of a project or organization.

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Resource regeneration

Enhancing the ability of natural systems to regenerate themselves and restore ecological processes that have been harmed or depleted by human activities.

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Resource use optimisation

Circular economy is a strategy that focuses on designing, producing, and distributing materials and products to maximize their use and value. It includes eco-design and tools like repair, reuse, and remanufacturing to optimize resource utilization.

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Reuse

Reuse is the process of using products and components again for their original purpose without major modifications, often involving cleaning or minor adjustments.

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Risk assessment

Process of identifying and evaluating potential threats to a company’s operations, sustainability goals, or regulatory compliance.

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Risks

Sustainability risks refer to negative financial impacts caused by environmental, social, or governance issues that can harm a company's financial position, performance, cash flow, access to finance, or cost of capital in the short, medium, or long term.

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River basin

Catchment: Land area where all surface run-off flows through streams, rivers, and possibly lakes, into the sea at a river mouth, estuary, or delta.

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SFDR

The Sustainable Finance Disclosure Regulation (SFDR) is a regulatory framework introduced by the European Union (EU) to promote sustainable finance and improve transparency in the financial industry.

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Scenario

Scenarios are hypothetical descriptions of the future based on assumptions about key factors. They are not predictions, but are used to understand the potential consequences of different developments and actions.

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Scenario analysis

Scenario analysis is a method used to evaluate various possible outcomes of future events in uncertain conditions.

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Scope 1 GHG emissions

Direct greenhouse gas (GHG) emissions from owned or controlled sources.

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Scope 2 GHG emissions

Indirect GHG emissions from the generation of purchased electricity, heat, steam, or cooling.

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Scope 3 GHG emissions

All other indirect emissions not covered in Scope 2. This includes emissions from purchased goods and services, logistics, product use, and disposal.

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Scope 3 category

Scope 3 GHG emissions are one of the 15 types of emissions identified by the GHG Protocol. They can be accounted for using ISO 14064-1:2018, excluding indirect GHG emissions from imported energy.

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Sensitive information

Sensitive information refers to data that is protected under Regulation (EU) 2021/697 of the European Parliament and of the Council, which establishes the European Defence Fund.

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Site

Site refers to the location of one or more physical installations, which may be owned or operated by different entities. If shared infrastructure and facilities are present, the entire area where the installations are located can be considered a site.

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Social dialogue

Dialogue refers to negotiations, consultations, or information exchange between government representatives, employers, workers' representatives, and their organizations. It can be tripartite, involving the government, or bipartite, involving only workers' representatives and management or trade unions and employers' organizations.

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Social protection

A collection of actions aimed at lessening and averting poverty and vulnerability throughout all stages of life.

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Soil

Soil is the upper layer of the Earth's crust, containing minerals, organic matter, water, air, and living organisms. It lies between the bedrock and the surface.

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Soil degradation

Soil degradation refers to the decline in the ability of soil to meet the needs of its users by providing essential resources and functions.

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Soil sealing

Soil sealing refers to covering soil in a manner that prevents water from penetrating it, such as with a road. This can have negative environmental effects, as outlined in EU Regulation (EU) 2018/2026.

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Specific loads

Specific load is the mass of pollutant released per mass of product manufactured. It helps compare environmental performance of installations regardless of production volumes, unaffected by mixing or dilution.

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Stakeholder engagement

Stakeholder engagement is a continuous process where the undertaking actively listens, comprehends, and addresses the interests and concerns of those involved, promoting effective communication and collaboration.

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Stakeholder mapping

The process of identifying individuals or groups affected by, or able to influence, a company’s activities.

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