ESG Investing Glossary

A system in which emissions allowances or carbon credits are issued, bought, sold or retired.

The total greenhouse gas emissions associated with an organisation, product, activity, event or person within a defined boundary.

A common unit that expresses the warming effect of different greenhouse gases relative to carbon dioxide using global warming potentials.

A naturally occurring greenhouse gas released through respiration, decomposition, combustion and industrial processes and removed by oceans, vegetation and other sinks.

A tradable unit representing one metric tonne of carbon dioxide equivalent reduced, avoided or removed under a carbon-crediting programme.

The mix of relevant backgrounds, skills, experience, gender, ethnicity, age and perspectives represented on a board.

Carbon contained in biomass or released from biogenic sources such as plants, soils and bio-based products.

The decline in the variety, abundance, integrity or resilience of genes, species and ecosystems.

The variability among living organisms at genetic, species and ecosystem levels.

An investment approach that favours issuers with stronger ESG performance relative to peers in the same sector or category.

A historical year against which future performance, emissions, energy use or other ESG metrics are compared.

Estimated emissions that do not occur because a product, service or project replaces a higher-emitting alternative, measured against a defined baseline.

Independent work that increases confidence in sustainability information by evaluating it against suitable criteria.

Policies, controls and conduct intended to prevent bribery, facilitation payments, corruption, extortion and improper influence.

The physical and mental state of an animal in relation to the conditions in which it lives and dies.

An actual or potential negative effect that an organisation causes, contributes to, or is directly linked to through its operations, products, services or business relationships.