Sustainability Glossary

The principle that a climate project generates emission reductions or removals that would not have occurred without the incentive provided by carbon credit revenue. A fundamental quality criterion for carbon offsets and credits.

The co-location of solar photovoltaic panels and agricultural activities on the same land, allowing simultaneous energy generation and crop cultivation. Systems can increase combined land productivity by 60-160% compared to separate use (Land Equivalent Ratio).

Also known as: Agriphotovoltaics, Solar Farming, Dual-Use Solar

Protein sources developed as alternatives to conventional animal agriculture, including plant-based proteins, cultivated (cell-based) meat, precision fermentation, and insect protein. The global market reached $14.2 billion in 2023, projected to exceed $35 billion by 2030.

Also known as: Novel Proteins, Protein Alternatives

A carbon-rich material produced by heating biomass in the absence of oxygen (pyrolysis). When applied to soils, biochar can sequester carbon for hundreds to thousands of years while improving soil health, water retention, and nutrient availability.

Tradeable certificates representing a measurable unit of positive biodiversity outcome, such as habitat restoration or species recovery. Emerging market with frameworks under development by TNFD, IUCN, and the Biodiversity Credit Alliance.

Also known as: Nature Credits, Biodiversity Certificates

A planning requirement (mandatory in England since February 2024) requiring development projects to deliver at least 10% improvement in biodiversity value compared to pre-development conditions, measured using the statutory biodiversity metric.

Also known as: BNG

The strategic use of development finance and philanthropic funds to mobilize additional private capital flows toward sustainable development. Concessional capital from public or philanthropic sources de-risks investments to attract commercial investors.

Also known as: Catalytic Capital

Carbon captured and stored by coastal and marine ecosystems, primarily mangroves, seagrass meadows, and salt marshes. These ecosystems can sequester carbon at rates 2-4 times higher per unit area than terrestrial forests, storing it in sediments for millennia.

Hydrogen produced from natural gas via steam methane reforming (SMR) or autothermal reforming (ATR) with carbon capture and storage. Capture rates typically range from 85-95%, with costs of $1.5-3.5/kg.

The ratio of actual energy output to the maximum possible output over a given period. Onshore wind typically achieves 25-45%, offshore wind 40-55%, solar PV 15-30%, nuclear 85-93%, and natural gas peakers 5-15%. Higher capacity factors improve project economics.

Also known as: Plant Factor

The process of measuring, recording, and reporting greenhouse gas emissions from organizational activities. Encompasses Scope 1, 2, and 3 emissions following protocols such as the GHG Protocol, ISO 14064, or sector-specific standards.

Also known as: GHG Accounting, Emissions Accounting

The maximum cumulative amount of CO2 that can be emitted while still limiting global warming to a specified temperature target. The remaining carbon budget for 1.5 degrees C (50% probability) is estimated at approximately 250 gigatonnes of CO2 from 2024.

Also known as: Emissions Budget

A suite of technologies that capture CO2 emissions from industrial sources or directly from the atmosphere, then either utilize the CO2 in products or permanently store it in geological formations. Current global capture capacity exceeds 40 million tonnes per year.

Also known as: CCS, Carbon Capture and Storage

A tradeable certificate representing one metric tonne of CO2 equivalent either reduced, avoided, or removed from the atmosphere. Voluntary market credits are verified by standards like Verra (VCS) or Gold Standard, while compliance credits operate within regulated emissions trading systems.

Also known as: Carbon Allowance, Emission Reduction Certificate

Agricultural practices specifically designed to sequester atmospheric carbon in soil organic matter and plant biomass. Includes cover cropping, no-till, agroforestry, and biochar application. Soil carbon credits can provide $15-50 per tonne of CO2 sequestered.

Also known as: Soil Carbon Sequestration

The amount of carbon dioxide emitted per unit of economic output, energy produced, or product manufactured. Expressed as kgCO2/MWh for electricity, tCO2/$M revenue for companies, or gCO2/km for vehicles. Used for benchmarking and tracking decarbonization progress.

Also known as: Emissions Intensity

The phenomenon where stringent climate policies in one jurisdiction cause carbon-intensive production to relocate to regions with weaker regulations, potentially increasing global emissions. CBAM and other border adjustment mechanisms aim to prevent carbon leakage.

Achieving net-zero carbon dioxide emissions by balancing emissions with carbon removal or purchasing carbon offsets. Distinguished from net zero, which typically requires deeper emission reductions before offsetting residual emissions.

Also known as: Carbon Neutrality, Climate Neutral

A reduction or removal of greenhouse gas emissions used to compensate for emissions occurring elsewhere. Offset quality depends on additionality, permanence, accurate quantification, and avoidance of leakage. Increasingly scrutinized for integrity issues.

Also known as: Emission Offset

Economic instruments that assign a monetary cost to greenhouse gas emissions, creating financial incentives for emission reductions. Includes emissions trading systems (cap-and-trade), carbon taxes, internal carbon pricing, and carbon border adjustments.

Activities that remove CO2 from the atmosphere and durably store it in geological, terrestrial, or ocean reservoirs, or in products. Includes direct air capture, enhanced weathering, biochar, and afforestation. Distinct from emission avoidance or reduction.

Also known as: Carbon Dioxide Removal, CDR, Negative Emissions

A government-imposed fee on the carbon content of fossil fuels or on greenhouse gas emissions, typically expressed as a price per tonne of CO2 equivalent. Over 40 national and sub-national carbon tax programs operate globally, with prices ranging from under $1 to over $130/tCO2e.

Also known as: Emissions Tax

The EU Carbon Border Adjustment Mechanism imposing a carbon cost on imports of carbon-intensive goods (steel, cement, aluminum, fertilizers, electricity, hydrogen) to prevent carbon leakage. Transitional reporting phase began October 2023, with financial obligations starting January 2026.

Also known as: Carbon Border Adjustment Mechanism, Carbon Border Tax

Formerly the Carbon Disclosure Project, a global non-profit running the world's largest environmental disclosure system. Over 23,000 companies disclose through CDP on climate change, water security, and deforestation. CDP questionnaires are aligning with ISSB standards.

Also known as: Carbon Disclosure Project

Documentation tracking the movement of a material or product through each step of a supply chain, from origin to end consumer. Models include identity preservation, segregation, mass balance, and book and claim. Foundational to certifications such as FSC, RSPO, and Fairtrade, and to regulator-grade traceability under EUDR.

Also known as: CoC, Custody Chain

An economic model that eliminates waste and pollution by design, keeps products and materials in use at their highest value, and regenerates natural systems. Contrasts with the linear take-make-dispose model.

Also known as: Circularity

Purchasing strategies that prioritize products and services designed for longevity, repairability, and recyclability, incorporating total cost of ownership and environmental lifecycle impacts into procurement decisions.

Also known as: Sustainable Procurement

An investor-led stewardship initiative launched in 2017 in which signatory asset owners and managers engage the world's largest corporate greenhouse gas emitters on climate disclosure, emission reduction, and governance. Engagement is tracked against the Net Zero Company Benchmark across 170 focus companies. Several large US managers reduced their involvement during the 2024 ESG backlash, reshaping signatory composition rather than ending the initiative.

Also known as: Climate Action 100+, CA100+

The potential for financial losses arising from climate change, comprising physical risks (acute events like floods and chronic changes like sea level rise) and transition risks (policy changes, technology shifts, market dynamics, and reputational impacts).

Also known as: Climate-Related Risk

Climate Value at Risk quantifies potential financial losses from climate change, incorporating both physical risks (extreme weather, sea level rise) and transition risks (policy changes, technology disruption, market shifts). Used by financial institutions for portfolio stress testing.

Also known as: Climate Value at Risk

The supply-side integrity threshold for voluntary carbon credits set by the Integrity Council for the Voluntary Carbon Market (ICVCM) and published in 2023. The CCPs cover ten requirements across governance, emissions impact (additionality, permanence, robust quantification, no double counting), and sustainable development (safeguards, benefits, contribution to net zero). CCP-eligible methodologies receive an ICVCM CCP label.

Also known as: ICVCM CCPs, CCP

The Carbon Offsetting and Reduction Scheme for International Aviation, an ICAO mechanism requiring airlines to offset growth in international aviation CO2 emissions above 2019 levels. Mandatory participation phase begins 2027.

Also known as: Carbon Offsetting and Reduction Scheme for International Aviation

Minerals essential for clean energy technologies that face supply concentration risks, including lithium, cobalt, nickel, rare earth elements, copper, and graphite. The IEA projects demand for critical minerals in energy technologies will quadruple by 2040 under net-zero scenarios.

Also known as: Critical Raw Materials, Strategic Minerals

The EU Corporate Sustainability Due Diligence Directive requiring large companies to identify, prevent, and mitigate adverse human rights and environmental impacts throughout their value chains. Applies to EU companies with 1,000+ employees and 450M+ EUR revenue.

Also known as: Corporate Sustainability Due Diligence Directive, CS3D

The EU Corporate Sustainability Reporting Directive requiring approximately 50,000 companies to report detailed sustainability information using European Sustainability Reporting Standards (ESRS). Phased implementation began in 2024 for large public-interest entities.

Also known as: Corporate Sustainability Reporting Directive

The deliberate reduction of electricity output from a generation source below what it could otherwise produce, typically due to grid congestion, oversupply, or transmission constraints. Renewable curtailment rates of 5-15% in some regions indicate need for grid flexibility and storage.

Also known as: Renewable Curtailment

The process of reducing carbon dioxide and other greenhouse gas emissions from energy systems, industrial processes, transportation, and buildings. Strategies include electrification, fuel switching, energy efficiency, carbon capture, and demand reduction.

Also known as: Decarbonisation

Programs that incentivize electricity consumers to temporarily reduce or shift their power usage during peak demand periods or grid stress events. Helps balance supply and demand, integrate variable renewables, and defer costly grid infrastructure investments.

Also known as: Demand Side Response, DSR

Decentralized Physical Infrastructure Networks using blockchain token incentives to crowdsource deployment and operation of physical infrastructure such as IoT sensors, renewable energy assets, wireless networks, and environmental monitoring equipment.

Also known as: Decentralized Physical Infrastructure Networks

A structured digital record containing information about a product's origin, composition, repair and disassembly instructions, and end-of-life handling. Required under the EU Ecodesign for Sustainable Products Regulation (ESPR) starting with batteries (2027) and textiles (2030).

Also known as: Product Passport

Technology that captures CO2 directly from ambient air using chemical sorbents or solvents. Current costs range from $400-1,000 per tonne of CO2, with targets to reduce below $200/tonne by 2030. Distinguished from point-source capture by its ability to address distributed emissions.

Also known as: DACCS, Direct Air Carbon Capture

An assessment approach requiring organizations to consider both how sustainability issues affect financial performance (financial materiality) and how the organization impacts society and the environment (impact materiality). Required under CSRD/ESRS.

Also known as: Dual Materiality

Synthetic fuels produced by combining green hydrogen with captured CO2 through Fischer-Tropsch synthesis or methanol-to-fuel processes. Offer a pathway to decarbonize hard-to-electrify transport sectors including aviation, shipping, and legacy vehicle fleets.

Also known as: Electrofuels, Synthetic Fuels, Power-to-Liquid

The most widely used life cycle inventory (LCI) database globally, maintained by the ecoinvent Association in Zurich since 2003. Current v3 release covers more than 20,000 LCI datasets across energy, materials, agriculture, transport, and waste, and is the default upstream dataset behind SimaPro, openLCA, Brightway, and most professional LCA platforms. ecoinvent licensing terms and data-quality methodology directly shape the comparability of LCA and EPD outputs across vendors.

Also known as: ecoinvent database, ecoinvent v3

The process of replacing technologies that use fossil fuels with electrically powered alternatives, particularly when combined with low-carbon electricity generation. Key sectors include transport (EVs), buildings (heat pumps), and industry (electric arc furnaces).

Also known as: Beneficial Electrification

A device that uses electricity to split water into hydrogen and oxygen through electrolysis. Main technologies include alkaline (ALK), proton exchange membrane (PEM), and solid oxide (SOEC), with costs declining from $1,000-1,500/kW to projected $200-400/kW by 2030.

Also known as: Electrolysis System

The total greenhouse gas emissions associated with the extraction, manufacturing, transportation, installation, and end-of-life processing of building materials and construction. Typically represents 50-80% of a new building's lifecycle emissions for a 60-year lifespan.

Also known as: Upfront Carbon

The global shift from fossil fuel-based energy systems to renewable and low-carbon sources. Encompasses changes in electricity generation, transportation, heating, and industrial processes. Global investment in energy transition reached $1.8 trillion in 2023.

A carbon dioxide removal method that accelerates natural rock weathering by spreading finely ground silicate minerals (typically basalt or olivine) on agricultural land or in oceans. Minerals react with CO2 dissolved in water, converting it to stable bicarbonates.

Also known as: Accelerated Weathering

A standardized, third-party verified document reporting the environmental impacts of a product across its life cycle, based on Product Category Rules (PCR) and ISO 14025. EN 15804 is the European standard for construction-product EPDs. EPDs are increasingly required for public procurement and for Digital Product Passport compliance under EU ESPR.

Also known as: EPD, Type III Environmental Declaration

Environmental, Social, and Governance criteria used by investors and organizations to evaluate corporate behavior and sustainability performance. ESG frameworks help stakeholders assess risks and opportunities beyond traditional financial metrics.

Also known as: Environmental Social Governance

Investment approaches that integrate environmental, social, and governance factors into portfolio construction, security selection, and stewardship activities. Spans negative screening, positive screening, ESG integration, thematic investing, and impact investing.

Also known as: Sustainable Investing, Responsible Investing

The EU Ecodesign for Sustainable Products Regulation expanding ecodesign requirements beyond energy-related products to cover nearly all physical products sold in the EU. Introduces Digital Product Passports, durability requirements, and bans on destroying unsold consumer products.

Also known as: Ecodesign for Sustainable Products Regulation

European Sustainability Reporting Standards developed by EFRAG as the mandatory reporting framework under CSRD. Includes cross-cutting standards (ESRS 1-2) and topical standards covering environmental (E1-E5), social (S1-S4), and governance (G1) issues.

Also known as: European Sustainability Reporting Standards

The European Union Emissions Trading System, the world's largest carbon market operating on a cap-and-trade principle. Covers approximately 40% of EU greenhouse gas emissions across power generation, industrial manufacturing, and (from 2024) maritime shipping. Prices exceeded 90 EUR/tonne in 2023.

Also known as: European Emissions Trading System

The EU classification system establishing a list of environmentally sustainable economic activities. Requires companies subject to CSRD to disclose the proportion of their revenue, capital expenditure, and operating expenditure aligned with taxonomy criteria.

Also known as: EU Sustainable Finance Taxonomy, Green Taxonomy

The EU Deforestation Regulation prohibiting the sale in the EU of products linked to deforestation or forest degradation after December 2020. Covers cattle, cocoa, coffee, oil palm, rubber, soya, and wood, plus derived products. Implementation begins December 2024.

Also known as: EU Deforestation Regulation, Deforestation-Free Regulation

A policy approach where producers are given responsibility for the end-of-life management of their products, including collection, recycling, and disposal. Fee structures vary by material type, recyclability, and jurisdiction.

Also known as: EPR Schemes, Producer Responsibility

A policy mechanism offering guaranteed, above-market prices to renewable energy producers for electricity fed into the grid, typically over 15-25 year contracts. Historically instrumental in scaling solar and wind deployment in Germany, UK, and Japan, though many programs have been replaced by auction mechanisms.

Also known as: FIT, Feed-in Premium

The greenhouse gas emissions attributable to a financial institution's lending and investment portfolio, calculated under the Partnership for Carbon Accounting Financials (PCAF) Global GHG Accounting and Reporting Standard. Treated as the dominant Scope 3 Category 15 component for banks, asset managers, and insurers, and a mandatory disclosure under CSRD ESRS E1 and ISSB IFRS S2 for financial-sector entities.

Also known as: Portfolio Emissions, Scope 3 Category 15

An electrochemical energy storage system where energy is stored in liquid electrolytes held in external tanks. Capacity scales independently of power output, making flow batteries well-suited for long-duration storage applications of 4-12+ hours.

Also known as: Redox Flow Battery, VRB

The most widely used international greenhouse gas accounting and reporting standards, developed by WRI and WBCSD. Provides frameworks for corporate, value chain, and project-level emissions accounting.

Also known as: Greenhouse Gas Protocol

A fixed-income instrument where proceeds are exclusively used to finance projects with environmental benefits, such as renewable energy, energy efficiency, or clean transportation. Global issuance exceeded $500 billion in 2023.

Also known as: Climate Bond

Proposed EU legislation requiring companies to substantiate environmental claims with scientific evidence and standardized methodology before communicating them to consumers. Aims to eliminate greenwashing by establishing verification and pre-approval requirements.

Also known as: EU Green Claims Directive

Hydrogen produced through electrolysis of water using renewable electricity. Current production costs range from $3-8/kg depending on electricity price and electrolyzer technology, with targets below $2/kg by 2030 to compete with grey hydrogen.

Also known as: Renewable Hydrogen

The practice of making misleading claims about the environmental benefits of a product, service, or corporate practice. Increasingly subject to regulatory enforcement through the EU Green Claims Directive, FTC Green Guides, and national advertising standards.

Also known as: Green Marketing Fraud

The Global Reporting Initiative, providing the most widely used sustainability reporting standards globally. GRI Standards use an impact materiality approach, focusing on an organization's impacts on the economy, environment, and people.

Also known as: Global Reporting Initiative

A device that transfers heat from a cooler space to a warmer space using refrigeration cycles, providing 2-5 units of heat energy for every unit of electrical energy consumed (COP 2-5). Types include air-source, ground-source, and water-source. Key technology for building decarbonization.

Also known as: ASHP, GSHP

A proposed energy system where hydrogen serves as a primary energy carrier for sectors difficult to electrify directly, including heavy industry, long-haul transport, and seasonal energy storage. Requires massive scaling of production, storage, and distribution infrastructure.

Investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. The market exceeded $1.1 trillion in assets under management in 2023. Distinguished from ESG integration by its explicit impact intentionality and measurement.

A monetary value assigned to carbon emissions within an organization to guide investment decisions, incentivize emission reductions, and prepare for future carbon pricing regulations. Prices range from $10-200/tCO2e depending on purpose and industry.

Also known as: Shadow Carbon Price

The US Inflation Reduction Act, signed August 2022, providing approximately $369 billion in climate and clean energy investments through tax credits, grants, and loan guarantees. Includes production tax credits for clean hydrogen, investment tax credits for clean energy, and consumer incentives for EVs and heat pumps.

Also known as: Inflation Reduction Act

The International Sustainability Standards Board, established by the IFRS Foundation, creating a global baseline of sustainability disclosure standards (IFRS S1 and S2). Focuses on investor-relevant sustainability information using single materiality.

Also known as: International Sustainability Standards Board

A framework ensuring that the shift to a low-carbon economy is fair and inclusive, supporting workers and communities dependent on fossil fuel industries through retraining, economic diversification, and social protection programs.

The Levelized Cost of Storage represents the total cost of storing and discharging one unit of energy over the lifetime of a storage system. Includes capital costs, O&M, degradation, and efficiency losses. Enables comparison across storage technologies.

Also known as: Levelized Cost of Storage

The average net present cost of electricity generation over the lifetime of a generating asset, expressed in $/MWh or $/kWh. Enables comparison across technologies. Utility-scale solar LCOE has fallen below $30/MWh in optimal locations as of 2025.

Also known as: Levelized Cost of Electricity

A systematic methodology for evaluating the environmental impacts of a product, process, or service throughout its entire life cycle, from raw material extraction through manufacturing, use, and end-of-life disposal or recycling.

Also known as: Life Cycle Analysis, Cradle-to-Grave Analysis

Energy storage systems capable of discharging electricity for 8 hours or more, including technologies such as iron-air batteries, flow batteries, compressed air, liquid air, and gravity-based systems. Critical for grid stability with high renewable penetration.

Also known as: Long-Duration Storage

A chain-of-custody model in which certified and non-certified materials are mixed during processing and the volume of certified output sold is reconciled to the volume of certified input purchased, without physical segregation. Widely used in commodity supply chains (RSPO palm, FSC fibre, ISCC bio-feedstocks, recycled plastics) where segregation is impractical, and increasingly scrutinized for credibility under the EU Green Claims Directive and ESPR Digital Product Passport requirements.

Also known as: Mass Balance, Mass-Balance Chain of Custody

The principle determining which sustainability topics are significant enough to warrant disclosure. Single materiality (ISSB) considers impacts on enterprise value; double materiality (CSRD/ESRS) also considers impacts on people and the environment.

Also known as: Material Topics

Strategies to reduce methane emissions from oil and gas operations (leak detection and repair), agriculture (enteric fermentation, manure management), and waste (landfill gas capture). Methane has 80x the warming potential of CO2 over 20 years, making abatement a high-impact near-term climate strategy.

Also known as: Methane Mitigation

Plastic particles smaller than 5mm in diameter originating from the breakdown of larger plastic items, synthetic textile fibers, tire wear, and industrial processes. Found in virtually all environmental compartments including oceans, freshwater, soil, air, food, and human blood.

Also known as: Microplastic Pollution

Monitoring, Reporting, and Verification processes used to track and validate greenhouse gas emissions, carbon credits, and sustainability claims. Increasingly incorporating remote sensing, AI, and blockchain for automated, transparent verification.

Also known as: Monitoring Reporting and Verification

The stock of natural assets including geology, soil, air, water, and all living things that provide ecosystem services essential to human well-being and economic activity. Valued at an estimated $125-140 trillion per year in ecosystem services globally.

Actions to protect, sustainably manage, and restore natural or modified ecosystems that address societal challenges while providing human well-being and biodiversity benefits. Includes reforestation, wetland restoration, urban green infrastructure, and coastal ecosystem management.

Also known as: NBS

A billing mechanism that credits solar energy system owners for the electricity they export to the grid at or near the retail electricity rate. Policies vary significantly by jurisdiction, with some transitioning to net billing or feed-in tariff structures that reduce compensation rates.

Also known as: Net Energy Metering, NEM

The state where greenhouse gas emissions produced are balanced by an equivalent amount removed from the atmosphere. The Science Based Targets initiative (SBTi) requires organizations to reduce absolute emissions by at least 90% before using removals for residual emissions.

Also known as: Net Zero Emissions

The Net Zero Asset Managers initiative, launched in 2020 and convened by the Investor Agenda, in which signatory asset managers commit to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner across all assets under management. The initiative suspended new commitments in January 2025 following the withdrawal of several large US signatories during the ESG backlash and entered a strategic review.

Also known as: Net Zero Asset Managers initiative

The Net-Zero Banking Alliance, a UN-convened initiative launched in 2021 in which signatory banks commit to aligning lending and investment portfolios with net-zero greenhouse gas emissions by 2050. NZBA sets sectoral target-setting guidelines under the Glasgow Financial Alliance for Net Zero (GFANZ) umbrella. Several large US and Canadian banks withdrew during 2024-2025 amid the ESG backlash, reshaping signatory composition.

Also known as: Net-Zero Banking Alliance, Net Zero Banking Alliance

Greenhouse gas emissions resulting from energy consumed during the operation of a building, including heating, cooling, lighting, ventilation, and plug loads. As grid electricity decarbonizes, operational carbon is declining relative to embodied carbon.

Principal Adverse Impacts, the mandatory sustainability indicators that EU financial market participants must disclose under SFDR Article 4 and Commission Delegated Regulation (EU) 2022/1288. The PAI regime covers 14 mandatory indicators (greenhouse gas emissions, biodiversity, water, waste, social and employee matters, human rights, anti-corruption) plus additional opt-in indicators, all reported at entity and product level.

Also known as: Principal Adverse Impacts, PAI Statement

The 2015 international treaty under the UNFCCC committing 196 parties to limit global warming to well below 2 degrees C, pursuing efforts to limit to 1.5 degrees C above pre-industrial levels. Countries submit Nationally Determined Contributions (NDCs) outlining emission reduction commitments.

Also known as: Paris Climate Agreement, COP21 Agreement

EU climate benchmarks defined under Regulation (EU) 2019/2089 with prescribed carbon intensity reductions and a 7% year-on-year decarbonization trajectory consistent with a 1.5C pathway. The two tiers are EU Paris-Aligned Benchmarks (PAB) and EU Climate Transition Benchmarks (CTB), with PAB the more stringent.

Also known as: PAB, EU Climate Benchmarks

The Partnership for Carbon Accounting Financials, providing standardized methods for financial institutions to measure and disclose greenhouse gas emissions associated with their loans and investments. Used by over 400 financial institutions globally.

Also known as: Partnership for Carbon Accounting Financials

Product Environmental Footprint Category Rules, the product-category-specific calculation rules developed under the EU Product Environmental Footprint (PEF) methodology by the European Commission Joint Research Centre. PEFCRs define mandatory LCA modelling choices (system boundary, allocation, data quality, impact categories) for a given product category so that PEF results across companies and platforms are comparable, supporting EU Green Claims Directive substantiation and Digital Product Passport disclosure.

Also known as: Product Environmental Footprint Category Rules

A photovoltaic technology using perovskite-structured compounds as the light-absorbing layer. Tandem perovskite-silicon cells have achieved laboratory efficiencies exceeding 33%, surpassing the theoretical limit of silicon alone. Commercial viability depends on resolving durability challenges.

Also known as: Perovskite PV

Per- and polyfluoroalkyl substances, a class of over 12,000 synthetic chemicals known as "forever chemicals" due to extreme environmental persistence. Used in non-stick coatings, firefighting foams, and water-resistant textiles. Subject to increasing regulatory restrictions globally.

Also known as: Forever Chemicals, Per- and Polyfluoroalkyl Substances

A framework identifying nine Earth system processes with boundaries that define a safe operating space for humanity. Six of nine boundaries have been transgressed as of 2023: climate change, biosphere integrity, land-system change, biogeochemical flows, novel entities, and freshwater change.

Technologies that convert renewable electricity into other energy carriers or chemical products, including hydrogen (Power-to-Gas), synthetic fuels (Power-to-Liquid), heat, and industrial feedstocks. Enables sector coupling and long-term energy storage.

Also known as: P2X, Sector Coupling

A Power Purchase Agreement is a long-term contract (typically 10-25 years) between an electricity generator and a buyer, often used to finance renewable energy projects. Corporate PPAs have become a primary mechanism for companies to procure renewable electricity and reduce Scope 2 emissions.

Also known as: Power Purchase Agreement, Corporate PPA

A biotechnology process using genetically engineered microorganisms to produce specific proteins, fats, and other compounds identical to those found in animal-derived products. Used to produce dairy proteins (whey, casein), collagen, egg proteins, and heme.

The European Commission's harmonized methodology for measuring the environmental performance of a product across its life cycle, developed by the Joint Research Centre and operationalized via product-category-specific PEFCRs. PEF underpins substantiation of environmental claims under the EU Green Claims Directive, ecodesign requirements under ESPR, and parts of the Digital Product Passport data model.

Also known as: PEF, EU PEF Method

EU Registration, Evaluation, Authorisation and Restriction of Chemicals regulation governing the production and use of chemical substances. Requires manufacturers and importers to register chemicals produced or imported above 1 tonne per year.

Also known as: Registration Evaluation Authorisation of Chemicals

A Renewable Energy Certificate represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a renewable source. Used for Scope 2 market-based accounting and renewable energy claims. Unbundled RECs are increasingly criticized for limited additionality.

Also known as: Renewable Energy Certificate, GO, Guarantee of Origin

Regenerative Finance, a movement within decentralized finance (DeFi) that uses blockchain and Web3 tools to fund and verify positive environmental and social outcomes. Includes tokenized carbon credits, decentralized MRV, and community-governed environmental funds.

Also known as: Regenerative Finance

Farming practices that go beyond sustainability to actively restore soil health, increase biodiversity, improve water cycles, and sequester carbon. Key practices include no-till farming, cover cropping, diverse rotations, and managed grazing.

Also known as: Regen Ag

The Science Based Targets initiative, a partnership between CDP, UNGC, WRI, and WWF that defines and validates corporate emission reduction targets consistent with climate science. Over 6,000 companies have committed to or set science-based targets.

Also known as: Science Based Targets initiative

Direct greenhouse gas emissions from sources owned or controlled by an organization, including on-site fuel combustion, company vehicles, and fugitive emissions from refrigerants or industrial processes.

Also known as: Direct Emissions

Indirect greenhouse gas emissions from the generation of purchased electricity, steam, heating, and cooling consumed by an organization. Can be calculated using location-based or market-based methods.

Also known as: Indirect Energy Emissions

A Scope 2 accounting method reflecting emissions from the specific electricity sources an organization has chosen (through RECs, PPAs, or green tariffs), rather than the average grid emission factor. Enables organizations to demonstrate the impact of renewable energy procurement decisions.

The GHG Protocol category covering financed emissions: greenhouse gas emissions associated with an organization's investments and lending activities. Particularly relevant for banks, asset managers, and insurers, often representing over 99% of financial institutions' total emissions.

Also known as: Financed Emissions

Strategies to reduce indirect value chain emissions, requiring supplier engagement, product redesign, logistics optimization, and customer behavior change. Typically the most challenging and largest emission category, often representing 70-95% of total corporate emissions.

Also known as: Value Chain Decarbonization

All other indirect greenhouse gas emissions across an organization's value chain, including upstream supply chain emissions, employee commuting, business travel, and downstream product use and disposal. Typically represents 70-90% of total corporate emissions.

Also known as: Value Chain Emissions

US Securities and Exchange Commission rules requiring publicly listed companies to disclose climate-related risks, governance, strategy, and Scope 1 and 2 greenhouse gas emissions. Adopted in March 2024 with phased implementation starting 2025.

Also known as: SEC Climate Disclosure Rules

The EU Sustainable Finance Disclosure Regulation requiring financial market participants to disclose sustainability-related information about their products and investment decisions. Classifies products as Article 6 (no sustainability claims), Article 8 (promotes characteristics), or Article 9 (sustainable investment objective).

Also known as: Sustainable Finance Disclosure Regulation

Product classifications under the EU Sustainable Finance Disclosure Regulation (SFDR). Article 8 ("light green") products promote environmental or social characteristics. Article 9 ("dark green") products have sustainable investment as their objective. The SFDR revision under consultation 2024-2026 proposes replacing this binary with a Sustainable, Transition, and Mainstream split.

Also known as: SFDR Product Categories, Light Green Dark Green Funds

Nuclear reactors with electrical output up to 300 MWe, designed for factory fabrication and modular deployment. Promise shorter construction timelines (3-5 years vs 10-15 for conventional reactors) and capital costs of $3,000-6,000/kW at scale.

Also known as: Small Modular Nuclear Reactor

An electricity network using digital communications, sensors, and automation to detect and react to local changes in usage and generation. Enables real-time demand management, integration of distributed energy resources, self-healing capabilities, and two-way power flows.

Also known as: Intelligent Grid

A battery technology replacing the liquid electrolyte in conventional lithium-ion cells with a solid electrolyte, offering potential advantages in energy density (400-500 Wh/kg vs 250-300 Wh/kg), safety, and cycle life. Expected commercial deployment for EVs by 2027-2030.

Also known as: All-Solid-State Battery, SSB

The exercise by institutional investors of their rights and responsibilities as shareholders, including proxy voting, engagement with portfolio companies, and participation in collaborative initiatives such as Climate Action 100+ and the Net Zero Asset Managers initiative. Codified in stewardship codes such as the UK Stewardship Code 2020.

Also known as: Investment Stewardship, Active Ownership

An asset that has suffered from unanticipated or premature write-downs, devaluations, or conversion to liabilities due to climate policy, technology shifts, or market changes. Fossil fuel reserves and carbon-intensive infrastructure are primary examples.

Also known as: Stranded Resources

A risk-based process by which companies identify, prevent, mitigate, and account for actual and potential human rights and environmental impacts across their own operations and value chain. The European baseline is set by CSDDD; member-state laws (notably German LkSG and French Loi de Vigilance) operate in parallel.

Also known as: Human Rights Due Diligence, Environmental Due Diligence

A bond instrument where financial characteristics (such as coupon rate) are tied to the issuer achieving predefined sustainability performance targets (SPTs). Unlike green bonds, proceeds can be used for general corporate purposes. Market exceeded $70 billion cumulative issuance by 2024.

Also known as: SLB

Aviation fuels produced from sustainable feedstocks (used cooking oil, agricultural residues, municipal solid waste, or synthesized from green hydrogen and captured CO2) that can reduce lifecycle emissions by 50-80% compared to conventional jet fuel.

Also known as: Bio Jet Fuel, Alternative Aviation Fuel

A classification system defining which economic activities qualify as environmentally sustainable. Beyond the EU Taxonomy, countries including the UK, Singapore, South Korea, ASEAN members, and South Africa are developing or have implemented their own green taxonomies.

Also known as: Green Taxonomy, Sustainable Finance Taxonomy

The degree to which an economic activity meets the technical screening criteria of a green taxonomy (such as the EU Taxonomy) for making a substantial contribution to environmental objectives without doing significant harm to others.

Also known as: Taxonomy Eligibility

The Task Force on Climate-related Financial Disclosures framework providing recommendations for climate risk and opportunity disclosure across governance, strategy, risk management, and metrics/targets. Superseded by ISSB standards but remains widely referenced.

Also known as: Task Force on Climate-related Financial Disclosures

A threshold beyond which a climate system reorganization becomes self-perpetuating, potentially irreversible on human timescales. Key examples include Amazon rainforest dieback, West Antarctic ice sheet collapse, Atlantic thermohaline circulation shutdown, and permafrost thaw.

Also known as: Climate Tipping Point

The Taskforce on Nature-related Financial Disclosures providing a risk management and disclosure framework for organizations to report and act on nature-related risks and opportunities. Released final recommendations in September 2023.

Also known as: Taskforce on Nature-related Financial Disclosures

A time-bound action plan outlining how an organization will pivot its business model and operations to align with a net-zero or Paris-aligned pathway. Increasingly required by regulators (CSRD, TPT) and expected by investors.

Also known as: Climate Transition Plan

Technology Readiness Level, a scale from 1 (basic principles observed) to 9 (proven in operational environment) used to assess the maturity of a technology. Widely used in clean energy and climate tech to evaluate the commercialization trajectory of emerging solutions.

Also known as: Technology Readiness Level

The demand-side integrity framework for corporate use of voluntary carbon credits published by the Voluntary Carbon Markets Integrity Initiative (VCMI) in 2023. The Claims Code of Practice defines Silver, Gold, and Platinum tiers based on emission reduction performance and credit quality (CCP-aligned) and sets disclosure requirements for any "VCMI-aligned" claim.

Also known as: VCMI Claims Code of Practice, VCMI CoP

Technology enabling bidirectional power flow between electric vehicles and the electrical grid. EVs can serve as distributed energy storage, providing grid services during peak demand and charging during off-peak hours. Requires compatible chargers, vehicles, and utility programs.

Also known as: V2G, Bidirectional Charging

A cloud-based system that aggregates and coordinates distributed energy resources (rooftop solar, batteries, EVs, smart thermostats) to operate as a unified power plant. Can provide grid services including frequency regulation, capacity, and demand response.

The non-regulated market in which buyers (typically corporates seeking offsets against voluntary climate commitments) purchase carbon credits from project developers, traded against standards such as Verra VCS, Gold Standard, ACR, and CAR. The VCM is governed on the supply side by the Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles and on the demand side by the VCMI Claims Code of Practice.

Also known as: VCM

A framework prioritizing waste management strategies in order of environmental preference: prevention, reuse, recycling, recovery (energy), and disposal. Embedded in EU Waste Framework Directive and most national waste policies.

Also known as: Waste Management Hierarchy

eXtensible Business Reporting Language, an open international standard for digital business and financial reporting. Required for CSRD ESRS-tagged sustainability disclosure in the EU and for SEC 10-K and 10-Q filings in the US. Enables machine-readable, structured reporting that regulators and analysts can ingest directly.

Also known as: eXtensible Business Reporting Language