ESG Investing Glossary

A certification system for forests and forest-based products intended to promote environmentally appropriate, socially beneficial and economically viable forest management.

Work or service exacted under threat of penalty and not offered voluntarily.

The significance of a sustainability-related risk or opportunity to an organisation's cash flows, access to finance, cost of capital or prospects.

A legal or equitable duty to act loyally, prudently and in the best interests of beneficiaries or the organisation.

A cost or benefit created by an activity that is not fully reflected in its market price and is borne or enjoyed by others.

A policy approach that makes producers responsible for specified environmental impacts of products, especially collection, recycling and end-of-life management.

The salary, incentives, benefits and other compensation awarded to senior executives.

The standards used by companies reporting under the CSRD, covering cross-cutting, environmental, social and governance disclosures.

The European Union classification system defining criteria for environmentally sustainable economic activities.

A voluntary European Union standard for bonds whose proceeds are allocated to activities aligned with the EU Taxonomy and subject to specified disclosure and review.

European Union rules requiring specified commodities and products placed on or exported from the EU market to be deforestation-free and legally produced.

An investment approach that selects or excludes assets according to moral, religious or values-based criteria.

Executive or employee pay that is partly determined by performance against specified ESG measures.

A time-bound qualitative or quantitative commitment to improve a defined ESG outcome or performance measure.

The possibility that environmental, social or governance factors adversely affect an organisation's strategy, operations, financial position, reputation or stakeholders.

An assessment that scores an entity, security or fund on selected ESG risks, practices or performance using a provider's methodology.