Table of Content
Glossary: Breaking Down The Buzzwords
| Absolute Emissions | Absolute emissions refer to the total quantity of greenhouse gases (GHG) being emitted by a company. |
| Baseline Setting | Before greenhouse gas emissions (GHG) reduction targets can be set, a company must establish a baseline. This baseline represents a company's initial level of GHG emissions against which all future inventories are compared and which will be used to achieve emissions reductions. |
| Bio-sequestration | Biological sequestration can either avoid emissions via conservation of existing carbon sinks (e.g., avoiding deforestation) or increase carbon storage (e.g., reforestation and increasing carbon sinks via soil/forest management). |
| Cap-and-Trade System | A cap-and-trade system is a market-based policy tool designed to control the amount of emissions or pollution. It works by setting a ceiling (cap) for certain entities (e.g., countries, industries) on how much emissions they can have (typically with a reduction target compared to historical values). The “pollution rights” are then divided into individual permits (e.g., for companies). Permits are finite and - as companies are free to sell and buy (“trade”) permits - take on financial value. That way there is an incentive to reduce emissions so companies can avoid buying permits or even earning money by selling unused permits. The former “external” costs of pollution are thus (partly) “internalized.” Examples are the EU Emission Trading System (ETS) and Chicago Climate Exchange (CCX). More information |
| Carbon Capture and Storage (CCS) | The process of capturing carbon that is emitted from energy production and diverting it into ground storage areas, to reduce the amount of CO2 emitted into the atmosphere. |
| Carbon Emissions | AKA: “Greenhouse Gas (GHG) Emissions”; “Emissions”; or “CO2 Emissions”: Term commonly used to denote the six classes of greenhouse gas emissions, established at the Kyoto conference, that contribute to human-induced Climate Change: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride. |
| Carbon Footprint |
A carbon footprint is a measure of the impact human activities (e.g., individuals, organizations, or regions) have on the environment in terms of the amount of greenhouse gases produced. This is measured in units of carbon dioxide (CO2) or carbon dioxide equivalent (to account for the global warming potential). Carbon footprint includes all direct Scope 1, all indirect Scope 2, and ‘material’ indirect scope 3 GHG emissions. Office energy is considered Scope 2 while air travel is Scope 3. Sample carbon calculator for individuals |
| Carbon Neutral | Carbon neutrality means achieving net zero carbon dioxide emissions by balancing carbon emissions with carbon removal (often through carbon offsetting) or simply eliminating carbon emissions altogether. By offsetting not only CO2 emissions but also the climate impact of other greenhouse gases, an organization might claim to be “climate neutral.” |
| Carbon Negative | Being “carbon negative” is the result of an organization both reducing its emissions in line with its 1.5˚C Science Based Target (SBT) and investing in nature-based solutions and carbon technologies to remove or offset more carbon than it emits, every year. |
| Carbon Offset | A carbon offset is a credit for greenhouse gas reductions achieved by one party that can be purchased and used to compensate (offset) the emissions of another party. Carbon offsets are typically measured in tonnes of CO2, equivalents, or CO2e and are bought and sold through international brokers, online retailers, and trading platforms. More information |
| Clean Development Mechanism (CDM) |
The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol allowing participating industrialized countries (known as “Annex I” countries) to invest in projects that reduce emissions in developing countries as one means of meeting their national emission reduction targets. |
| CDP Disclosure System | CDP is a reporting system for companies to report their GHG emissions and planetary impact. This can be done in response to a request from an investor, a customer, or both. More information |
| Certified Emission Reductions (CER) | Certified Emissions Reductions are carbon credits issued for emission reductions achieved by CDM projects and verified under the rules of the Kyoto Protocol. More information |
| Carbon dioxide equivalent (CO2e) | The internationally recognized way of expressing the amount of global warming of a particular greenhouse gas in terms of the amount of CO2 required to achieve the same warming effect over 100 years. |
| Conference of the Parties (COP) | The United Nations (UN) has been organizing global climate summits - called COPs (which stands for ‘Conference of the Parties’) for the last decades to agree and coordinate action to combat climate change. The summits take place annually and act as the decision-making structure for the UN Framework Convention on Climate Change. In recent years, the most notable summits have been COP21 in Paris and COP26 in Glasgow. More information |
| Corporate Social Responsibility (CSR) | Corporate Social Responsibility (CSR) is often used as a synonym for sustainability programs of organizations. Companies commit themselves to be good citizens with principles around environmental, social, ethical, and other dimensions of sustainability to reflect the broader community interests of stakeholders rather than focusing on shareholders only. More information |
| Default Emission Factors (DEF) | A default emission factor is a representative value that estimates the amount of a pollutant released into the atmosphere for one given activity. For example, a DEF may associate an aircraft type with the different types of pollutants emitted by the aircraft during its operating time. Standardized DEFs are provided by Defra, EPA, IPCC, or ICAO (please see Module 5[KF1] for further details on emission calculation tools.) More information |
| United Kingdom Department for Environment, Food and Rural Affairs (DEFRA) | DEFRA has published helpful introductory information on climate change and greenhouse gas emissions on their website. The UK has its own code of best practices for carbon offsetting and provides a method for carbon footprint analysis. More information |
| Dow Jones Sustainability Indices (DJSI) | The Dow Jones Sustainability Indices are the first global indices tracking the financial performance of companies with sustainability strategy worldwide. More information |
| Emissions intensity | Emissions intensity refers to the amount of GHG emitted relative to another relevant and measurable unit. This may involve emission per revenue generated in a given currency, emissions per person, or emissions for unit of output (e.g., the amount of CO2 emitted by an energy company for each kWh of electricity generated). |
| Emissions Scopes |
Emissions are split into 3 categories by the Greenhouse Gas Protocol: Scope 1: All direct emissions from the activities of an organization or those under its control |
| Energy efficiency | Energy efficient products or systems use less energy than conventional technology to perform the same task. An example of a project providing energy efficiency benefits would be retrofitting energy inefficient buildings with better insulation. |
| Emission Reduction Unit (ERU) | An emission reduction unit (ERU) is a unit issued for emission reductions achieved by Joint Implementation (JI) projects. One ERU is equal to one metric ton of carbon dioxide equivalent. More information |
| Ethibel Sustainability Index (ESI) | The Ethibel Sustainability Index (ESI) provides a comprehensive perspective on the financial performance of the world’s leading companies in terms of sustainability for institutional investors, asset managers, banks, and retail investors. More information |
| European Union Greenhouse Gas Emission Trading Scheme (EU ETS) | The European Union Greenhouse Gas Emission Trading Scheme (EU ETS) is the largest multi-country, multi- sector greenhouse gas emission trading scheme worldwide. More information |
| Full lifecycle (“well-to-wake”) emissions (FLE) | Well-to-wake emissions, or life-cycle emissions, are the sum of upstream (well-to-tank) and downstream (tank-to-wake) emissions. The EU Emissions Trading Scheme uses this methodology, as well as policies currently in development for instance the International Maritime Organization and in other regions and countries that aim to reduce shipping’s climate impacts. More information |
| FTSE4 Good Index Series FTSE4Good | The FTSE4 Good Index Series has been designed to measure the performance of companies that meet globally recognized corporate responsibility standards and to facilitate investment in those companies. More information |
| Greenhouse Gas Protocol (GHG Protocol) | The Greenhouse Gas Protocol (GHG Protocol), a decade-long partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. More information |
| Greenhouse gases | Greenhouse gases are gases that cause climate change. The gases covered under the Kyoto Protocol are carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), hydro fluorocarbon (HFCs), per fluorocarbons (PFCs), and sulphur hexafluoride (SF6). |
| Global Reporting Initiative (GRI) Standard | The GRI Standards are a modular system of interconnected standards. They allow organizations to publicly report the impacts of their activities in a structured way that is transparent to stakeholders and other interested parties. More information |
| Global Sustainable Tourism Council (GSTC) | The Global Sustainable Tourism Council® (GSTC) establishes and manages global standards for sustainable travel and tourism, known as the GSTC Criteria. There are two sets: Destination Criteria for public policymakers and destination managers, and Industry Criteria for hotels and tour operators. They are arranged in four pillars: (A) Sustainable management; (B) Socioeconomic impacts; (C) Cultural impacts; and (D) Environmental impacts. The Criteria are designed to be adapted to local conditions and supplemented by additional criteria for the specific location and activity. More information |
| Global Warming Potential (GWP) | Global Warming Potential (GWP) is “a measurement of the impact that particular [greenhouse] gas has on ‘radiative forcing’; that is, the additional heat/energy which is retained in the Earth’s ecosystem through the addition of this gas to the atmosphere.” More information |
| Hotel Carbon Measurement Initiative (HCMI) | Hotel Carbon Measurement Initiative (HCMI) is a free methodology and tool for hotels to calculate the carbon footprint of hotel stays and meetings in their properties. |
| IATA Environmental Assessment (IEnvA) | The IATA Environmental Assessment (IEnvA) program is an evaluation system designed to independently assess and improve the environmental management of an airline. IEnvA is a voluntary program based on principles in compliance with environmental obligations and a commitment to continually improve environmental management. More information |
| International Emissions Trading Association (IETA) | IETA is an independent, non-profit organization dedicated to the establishment of effective systems for trading in greenhouse gas emissions by businesses. IETA is one of the organizations behind the Voluntary Carbon Standard (VCS). More information |
| Individual or personal carbon budget/allowances | Individual or personal carbon budget/allowances is a type of carbon rationing. It is also a term to describe a number of emissions trading schemes under which emissions credits would be allocated to adult individuals on an equal per capita basis, within national carbon budgets. People would then be able to buy fuel or electricity in exchange for credits. When people need to emit at a higher level than what is permitted, they would have to buy additional credits in the personal carbon market. |
| Internal price on carbon for travelers | Internal price on carbon for travelers refers to the mechanism of Internal Carbon Pricing (ICP). ICP is a mechanism by which companies can put a value on their greenhouse gas (GHG) emissions in a way that drives positive change in their business. |
| Intergovernmental Panel on Climate Change (IPCC) | The IPCC is a scientific intergovernmental body set up by the World Meteorological Organization (WMO) and by the United Nations Environment Program (UNEP) to provide the decision-makers and others interested in climate change with an objective source of information about climate change. In 2007 the IPCC and Al Gore were awarded the Nobel Peace Prize “for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change.” More information |
| Multimodality | Multimodality refers to the use of a combination of several transport options in the same journey. For example, a passenger traveling from New York to Strasbourg can shift from air to rail in Paris or Frankfurt for the final leg of the trip. |
| Non-Government Organization (NGO) | A Non-Government Organization (NGO) is a legal entity created by private persons or organizations with no participation or representation of any government. NGOs are often cited in reference to pressure groups or stakeholder concepts. |
| Net Zero | The point at which an organization has achieved its 1.5˚C SBT and removed its residual emissions from the atmosphere. |
| Net-Zero-Standard | SBTi Net-Zero Standard sees the role of carbon offsetting as a neutralizer of the 5-10% of remaining residual emissions after a company has achieved their long-term sustainability objectives. More information |
| Offsetting | Offsetting is the practice of companies financing projects that avoid, reduce, or capture greenhouse gas emissions (carbon credits). The alternative is to purchase and retire “pollution rights” (allowances) from carbon cap-and-trade markets. |
| Paris Agreement | The Paris Agreement is a legally binding international treaty on climate change adopted by more than 190 countries in 2015. Its goal is to limit global warming to well below 2°, preferably to 1.5° Celsius, compared to pre-industrial levels. More information |
| Polluter pays levy | The “polluter pays” principle is the commonly accepted practice that those who produce pollution should bear the costs of managing it to prevent damage to human health or the environment. For instance, a factory that produces a potentially poisonous substance as a by-product of its activities is usually held responsible for its safe disposal. The “polluter pays” principle is part of a set of broader principles to guide sustainable development worldwide (formally known as the 1992 Rio Declaration). Learn more |
| Renewable energy | Renewable energy is energy that comes from sources that can be naturally replenished but which are limited in terms of flow. For instance, wind and solar power are considered as renewable energies sources. Learn more |
| Radiative Forcing (RF) and Radiative Forcing Index (RFI) | In climate change science, radiative forcing is the change in the balance between radiation coming into the atmosphere and radiation going out caused, for example, by the emission of greenhouse gases. A positive radiative forcing tends to warm the surface of the earth, and negative forcing to cool the surface. Despite criticism, the radiative forcing concept has become a standard tool for policy analysis endorsed by the IPCC. The Radiative Forcing Index (RFI) is a measure of the importance of aircraft-induced climate change relative to the release of fossil carbon alone (e.g., other greenhouse gases and condensation trails). Using the RFI, one can “convert” the climate impact of aircraft emissions in high altitudes into equivalent carbon emissions on the ground. Learn more |
| RSB Standard (RSB) | The RSB Standard contributes to food security, rural development, and protection of ecosystems. RSB’s membership base of sector pioneers, business leaders, NGO, and UN agencies have developed the 12 principles of the standard. Learn more |
| Sustainable Aviation Fuels (SAF) | Sustainable aviation fuels (SAF) are renewable or waste-derived aviation fuels that meets sustainability criteria. They are one element of the ICAO basket of measures to reduce aviation emissions, which also includes technology and standards, operational improvements, and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA.) Learn more |
| Sustainability Accounting Standards Board (SASB) Standard | SASB Standards are designed for communication between companies and investors about how sustainability issues impact long-term enterprise value. SASB Standards can be used by companies as a practical tool for implementing the principles-based framework recommended by the Task Force for Climate-related Financial Disclosures (TCFD). More information |
| Sustainable Development Goals (SDGs) | The SDGs are a collection of 17 interlinked global goals designed to be a “blueprint to achieve a better and more sustainable future for all.” The 17 Sustainable Development Goals, and their 169 targets, aim to eradicate poverty in all forms, “realize the human rights of all,” and achieve gender equality.” The SDGs were set up in 2015 by the United Nations General Assembly and are intended to be achieved by 2030. More information |
| Science-Based Targets initiative (SBTi) | The Science Based Targets initiative (SBTi) helps companies understand how much and how fast they must reduce greenhouse gas (GHG) emissions to align with the goals of the Paris agreement - to limit warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C. More information |
| Science-Based Target | A science-based target is a greenhouse gas reduction target to reduce an organization’s emissions in line with climate science and the Paris Agreement goal to limit global warming to 1.5˚C above pre-industrial levels. |
| Scope 3 emission | Released in 2011, the Scope 3 Standard is the only internationally accepted method for companies to account for and report emissions from companies of all sectors, globally. Users of the standard can now account for emissions from 15 categories of Scope 3 activities, both upstream and downstream of their operations. The Scope 3 framework also supports strategies to partner with suppliers and customers to address climate impacts throughout the value chain. It is accompanied by a suite of guidance and tools developed by the GHG Protocol. More information |
| Sustainable Hospitality Alliance (SHA) | The SHA brings together hospitality companies that are engaged in sustainability. The program develops practical resources and tools for the industry to operate responsibly and grow sustainably. The initiative is aligned with the United Nations Sustainable Development Goals (SGDs) and the organization is committed to drive continued action on human rights, youth employment, climate action, and water stewardship. More information |
| Sustainability | According to the U.S. Environmental Protection Agency (EPA), sustainability means “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Many companies have embraced the concept of sustainability in their CSR programs and some even produce sustainability reports. There are some indices that assess the financial performance of companies with sustainability programs, such as DJSI and FTSE4Good. More information |
| Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations | TCFD is committed to market transparency and develops recommendations on the types of information that companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing a specific set of risks related to climate change. More information |
| The Climate Group (TCG) | The Climate Group is an independent, nonprofit organization dedicated to advancing business and government leadership on climate change. TCG is one of the organizations behind the Voluntary Carbon Standard (VCS). More information |
| Triple bottom line | This concept postulates that business performance may be measured in relation to its finances, its environmental impact, and how socially responsible it is in relation to employees. |
| United Nations Framework Convention on Climate Change (UNFCCC) | The UNFCCC was one of three conventions adopted at the 1992 “Rio Earth Summit.” Most countries joined this international treaty to consider what can be done to reduce global warming and to cope with inevitable temperature increases. More recently, several nations have approved an addition to the treaty: the Kyoto Protocol, which has more powerful (and legally binding) measures. More information |
| United Nations Global Compact | The UN Global Compact is a framework for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labor, the environment, and anti-corruption. More information |
| Verified Carbon Standard (VCS) | The Verified Carbon Standard is a carbon offset program developed and run by the non-profit Verra. It focuses on GHG reduction attributes only and does not require projects to have additional environmental or social benefits. The VCS is broadly supported by the carbon offset industry (project developers, large offset buyers, verifiers, and projects consultants) and is active globally. More information |
| Voluntary Carbon Standard (VCS 2007) | The new Voluntary Carbon Standard was launched as a robust, global standard for voluntary offset projects. It aims to ensure that carbon offsets that businesses and consumers buy can be trusted and have real environmental benefits. The founding partners of the VCS are the Climate Group, the International Emissions Trading Association (IETA), and the World Business Council for Sustainable Development (WBCSD). More information |
| Verified Emission Reductions (VER) | Verified Emission Reductions (VERs) are credits generated through offset projects that are assessed by a third-party organization chosen by the project developer rather than by an internationally agreed body (as required for CER). As this does not meet the Kyoto Protocol requirements, VER are only traded on the voluntary offset market. |
| World Business Council for Sustainable Development (WBCSD) | The World Business Council for Sustainable Development (WBCSD) is a CEO-led, global association of some 200 companies dealing exclusively with business and sustainable development. The WBCSD is one of the organizations behind the Voluntary Carbon Standard (VCS) and the greenhouse gas protocol. More information |
| World Economic Forum (WEF) | The World Economic Forum is an independent, international organization incorporated as a Swiss not-for-profit foundation. They are striving towards a world-class corporate governance system where values are as important a basis as rules. The WEF is one of the organizations behind the Voluntary Carbon Standard (VCS). More information |
| World Resources Institute (WRI) | The World Resources Institute (WRI) is an environmental think tank that goes beyond research to find practical ways to protect the earth and improve people’s lives. The WRI is one of the organizations behind the greenhouse gas protocol. More information |
| US Environmental Protection Agency (EPA) | US Environmental Protection Agency (EPA): The EPA is a US federal agency that develops and enforces regulations related to the environment and human health. They have developed Default Emission Factors (DEFs) for organizational greenhouse gas reporting. More information |
| International Civil Aviation Organization (ICAO) | ICAO is a United Nations agency that supports cooperation in air transport among 193 member states. They have developed Default Emission Factors (DEFs) for air travel. More information More information |
