Complex CSRD and sustainability terminology explained
Actions are plans and decisions made by an organization to meet targets and address climate-related impacts, risks, and opportunities. This includes allocating resources such as money, people, and technology to support these plans.
Individuals or entities in the supply chain. Downstream actors receive products or services from a company, while upstream actors provide products or services used in the company's production process.
A fair wage that meets the worker's and their family's needs, taking into account the country's economic and social conditions.
The highest decision-making bodies in an organization, including committees. If there are no members from the administrative, management, or supervisory bodies, the CEO and deputy CEO (if applicable) should be included. In some cases, governance systems have two tiers, with separate supervision and management.
Affected communities refer to people or groups living or working in the same area as a reporting undertaking, who may be impacted by its operations or value chain. This includes local communities, as well as indigenous people who are actually or potentially affected.
Annual total remuneration to own workforce refers to the overall compensation given to employees, including salary, bonuses, stock and option awards, non-equity incentives, pension value changes, and deferred compensation earnings, provided within a year.
Financial impacts that do not meet the requirements for being included in the financial statements and are not accounted for in the current financial effects.
A water catchment is an area where various factors can cause water bodies to become polluted or decrease in quality, leading to problems with water availability, accessibility, and affordability for communities and facilities.
Regions with high or extremely high water withdrawal rates can be identified using the Aqueduct Water Risk Atlas tool by the World Resources Institute (WRI).
Auxiliary materials used in manufacturing, like lubricants for machinery, which are necessary for the production process but do not become part of the end product.
A report created under Directive 2010/75/EU that provides information on industrial emissions, techniques used, consumption levels, and emerging techniques. It considers criteria listed in Annex III of the directive.
BAT-associated emission level is the average emission range achieved using the best available techniques (BAT) during normal operations. It is measured over a specific time period and under defined reference conditions.
The term "best available techniques" refers to the most effective and advanced methods of operation and technology used in activities to reduce emissions and minimize environmental impact. These techniques should be economically and technically viable and accessible to operators.
A document that includes information on best available techniques, their description, emission levels, environmental performance levels, benchmarks for environmental management systems, monitoring, consumption levels, and site remediation measures.
Biodiversity loss refers to the decrease in genetic, species, and ecosystem diversity in a specific area due to death, destruction, or removal. It can occur at various scales, leading to reduced overall diversity.
Biodiversity refers to the diversity of living organisms in different ecosystems, including genetic, physical, and functional variations. It also encompasses changes in population and distribution over time and space within and between species, communities, and ecosystems.
Protected areas such as Natura 2000, UNESCO World Heritage sites, and Key Biodiversity Areas (KBAs) are important for conserving biodiversity and are defined in the Commission Delegated Regulation (EU) 2021/2139.
Ecosystem resilience refers to the capacity of a natural system to sustain ecological processes and a wide range of organisms.
The blue economy includes industries and sectors connected to oceans, seas, and coasts, both in the marine environment (like shipping and fisheries) and on land (such as ports and coastal tourism).
Bribery: Illegitimate practice of influencing someone's actions in one's own interest through the offering of money or other incentives.
The process of converting resources into results to achieve a company's goals and generate value in the short, medium, and long term. It is acknowledged that companies may have multiple business models.
Business relationships refer to the connections a company has with its partners, entities in its value chain, and other non-State or State entities that are directly linked to its operations, products, or services. These relationships can be both direct and indirect, including shareholding positions in joint ventures or investments.
A byproduct is a substance or object that is produced during a production process, but is not considered waste if it meets certain conditions, including being certain to be used, not needing further processing, and meeting all relevant requirements.
A carbon credit is a tradable unit that represents one metric tonne of CO2eq emission reduction or removal, issued and verified according to recognized quality standards.
Global Warming Potential (GWP) is a universal unit of measurement that compares the impact of greenhouse gases to carbon dioxide. It helps assess the release or avoidance of different gases in a standardized manner.
Child labor refers to work that is dangerous, harmful, or interferes with a child's education. The minimum age for work should be at least 15, but exceptions can be made for countries with underdeveloped economies. Children aged 13 to 15 may be allowed to do light work.
A sustainable economic system that aims to maximize the use of products and resources, minimize waste and the release of harmful substances, and reduce the environmental impact throughout their entire life cycle.
The European circular economy principles include usability, reusability, repairability, disassembly, remanufacturing, recycling, recirculation by the biological cycle, and other potential optimization of product and material use.
Recirculation involves strategies like maintenance, reuse, refurbishment, and recycling to extend the lifespan of materials and reduce waste. The use rate measures the proportion of materials that are reused in comparison to overall material use.
EU classified information refers to information that is classified and protected according to the security rules outlined in Council Decision 2013/488/EU, or classified by a Member State and marked accordingly.
Climate adaptation refers to the actions taken to cope with the effects of climate change, both current and anticipated. It involves adjusting to the changing climate and its impacts.
Limiting global warming to 1.5°C above pre-industrial levels by reducing greenhouse gas emissions, as outlined in the Paris Agreement.
Climate resilience refers to an organization's ability to adapt and respond to climate change, including managing risks and taking advantage of opportunities. It encompasses both strategic and operational resilience to climate-related changes and uncertainties.
Climate change mitigation and adaptation efforts can create opportunities for businesses. These opportunities will differ based on the location, market, and industry of the business.
Climate risks can be acute (event-driven) or chronic (long-term shifts). Acute risks include storms, floods, fires, and heatwaves. Chronic risks arise from temperature changes, rising sea levels, reduced water availability, biodiversity loss, and changes in land and soil productivity.
Transition risks refer to the potential dangers associated with shifting towards a low-carbon and climate-resilient economy. These risks encompass policy, legal, technology, market, and reputational aspects.
Collective bargaining refers to negotiations between employers and trade unions or worker representatives to determine working conditions, terms of employment, and regulate relations between employers and workers or their organizations.
Confirmed incidents of child or forced labor or human trafficking that have been proven to be true. Excludes incidents that are still being investigated during the reporting period.
Confirmed incidents of corruption or bribery that have been proven, excluding those still under investigation. Determination of substantiated cases can be made by a compliance officer or authority, without requiring a court ruling.
Consumers are people who buy and use products for personal use, not for selling or business purposes.
Corporate culture is the expression of goals through shared values and beliefs. It guides activities through assumptions, norms, and codes of conduct.
Corruption refers to the misuse of power for personal gain, involving practices like bribery, fraud, and money laundering. It includes offering or receiving gifts, loans, or rewards to influence dishonest or illegal actions, which can include cash, goods, or services.
Experienced individuals who engage with stakeholders from specific regions or contexts, such as women workers, indigenous peoples, or migrant workers. They can effectively communicate their concerns, with the help of NGOs, trade unions, civil society, and faith-based organizations.
Financial impacts in the present reporting period that are acknowledged in the main financial statements.
Mitigation actions include energy efficiency, electrification, fuel switching, renewable energy use, product change, and supply-chain decarbonisation, tailored to specific undertakings.
Deforestation refers to the human-driven process of converting forested areas into non-forested land, either temporarily or permanently.
Chronic human impacts cause biodiversity loss and disrupt the structure, composition, and functionality of ecosystems.
The reliance of a business on natural, human, and social resources for its operations.
Accumulation refers to the build-up of substances in the environment, whether from regular activities, incidents, or disposals. It can occur at the production site or elsewhere.
Land degradation in arid regions caused by climate change and human actions. Desertification excludes the natural growth of deserts.
Wastewater discharge refers to the release of water or substances into a water body from a specific or general source. Sewage effluent is the treated sewage that is discharged from a sewage treatment plant.
Discrimination can be direct or indirect. Direct discrimination is when someone is treated unfairly because of a specific characteristic, while indirect discrimination is when a seemingly neutral rule puts a person or group at a disadvantage compared to others.
Double materiality refers to the two dimensions of sustainability: impact materiality and financial materiality. A sustainability matter is considered double materiality if it is significant in terms of its impact or financial implications, or both.
Resilience refers to the capacity of a product, component, or material to maintain its functionality and relevance when utilized as intended.
Ecological threshold is the tipping point where a slight alteration in external factors triggers a sudden transformation in an ecosystem. Once crossed, the ecosystem may lose its ability to recover through its natural resilience.
Ecosystem asset refers to the size of a specific ecosystem type, which includes both living and non-living components and their interactions within a contiguous space.
Ecological restoration refers to deliberate actions taken to speed up the recovery of a damaged ecosystem and bring it back to its original healthy state.
Ecosystem services refer to the benefits that ecosystems provide to humans. These benefits can be categorized into supporting, regulating, provisioning, and cultural services. The Common International Classification of Ecosystem Services (CICES) classifies different types of ecosystem services.
An ecosystem is a dynamic system where plants, animals, microorganisms, and their environment interact. The IUCN Global Ecosystem Typology 2.0 categorizes different types of ecosystems.
Emissions refer to the release of substances, vibrations, heat, or noise into the air, water, or soil from various sources, either directly or indirectly.
An employee is someone who works for a company or organization and is legally recognized as being in an employment relationship, as defined by national laws and practices.
End users are the people who will ultimately use a specific product or service.
Ensuring fair and inclusive access to education, employment, and power, regardless of gender, race, nationality, religion, disability, age, or sexual orientation, without any form of discrimination.
Equal treatment is a principle in European law that requires treating similar situations or parties in the same way. In the context of ESRS S1, it also means no discrimination based on factors like sex, race, religion, disability, or sexual orientation.
Impacts on a company's financial status, performance, and cash flow resulting from risks and opportunities, occurring in the short, medium, or long term.
A sustainability matter is financially significant if it poses risks or opportunities that impact the company's financial position, performance, cash flows, access to finance, or cost of capital in the short, medium, or long term.
Forced labor refers to any work or service that is demanded from someone under the threat of punishment, without their voluntary agreement. It includes both historical and modern forms of coercion, such as human trafficking and modern slavery.
Non-renewable carbon-based energy sources include solid fuels, natural gas, and oil. These sources contribute to climate change and are not sustainable in the long term.
Free, Prior, and Informed Consent (FPIC) is a fundamental right of indigenous peoples, encompassing their right to be consulted, participate, and have control over their lands, territories, and resources. It is recognized under international human rights law, including the UNDRIP.
Groundwater and surface water have a low salinity level of less than 0.5 ‰, which is the maximum limit stated in the Water Framework Directive's Annex II.
Emission reductions refer to a decrease in greenhouse gas emissions by a company or organization. This can be achieved through various means such as energy efficiency, decarbonization of suppliers, or changes in activities. Removals and avoided emissions are not considered as emission reductions.
Anthropogenic removals are deliberate actions by humans to withdraw greenhouse gases (GHGs) from the atmosphere. This can be done through enhancing CO2 sinks and using chemical engineering for long-term storage. Carbon capture and storage (CCS) can remove CO2 if combined with bioenergy production. Reversals occur when stored GHGs are released back into the atmosphere, such as when a forest that was grown to capture CO2 is destroyed by a wildfire.
Global Warming Potential (GWP) is a measure of how much a greenhouse gas (GHG) contributes to climate change compared to carbon dioxide (CO2). It quantifies the relative harm caused by different GHGs.
The gases listed in Part 2 of Annex V of Regulation (EU) 2018/1999 include CO2, CH4, N2O, SF6, NF3, HFCs, and PFCs. These gases contribute to climate change and are regulated by the European Parliament and Council.
Grievance mechanisms are processes for stakeholders to raise concerns and seek resolution. Examples include courts, government agencies, and industry associations. Operational-level mechanisms are directly accessible and help prevent harm and provide feedback. Effective mechanisms are legitimate, accessible, predictable, equitable, transparent, rights-compatible, and promote learning.
Groundwater is the water found beneath the Earth's surface in the saturation zone, in direct contact with the ground or subsoil.
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.
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.
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.
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.
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.
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.
A sustainability matter is considered important when it has significant positive or negative impacts on people or the environment in the short, medium, and long term. This includes impacts from the company's operations, supply chain, products, services, and business relationships.
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.
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.
Incineration is the process of burning waste at high temperatures, either with or without energy recovery.
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.
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.
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.
A fixed facility where activities that may impact emissions and pollution are conducted.
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.
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.
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.
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.
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.
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.
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.
A landfill is a site where waste is deposited onto or into land for disposal purposes.
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.
The capacity of an action to influence and transform the harmful actions of another party that contribute to negative environmental consequences.
