Described by some as the watershed year, 2021 became the year of environmental, social, and governance (ESG). We saw record money pouring into ESG-focused funds and investors flexing their muscle to challenge companies’ ESG commitments. As highlighted in our post What ESG Means for Your Company’s Future, ESG policies can have a massive impact on companies’ futures.
Regardless of your position, ESG related words are becoming more and more prevalent in meetings, annual filings, and the media. It is important to be aware of the meaning of these keywords to avoid confusion and play an active part in the solutions. For a better understanding of some of the most important keywords for 2022, we highlight 10 to focus on below:
1. Carbon capture and storage (CCS):
Carbon capture and storage (CCS) is the process of capturing waste CO2 and placing it into a geological storage site in such a way that it will not enter the atmosphere and contribute to further global warming.
2. Corporate social responsibility (CSR):
The responsibility of corporations to contribute positively to society. A corporation’s self-regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.
3. Double materiality:
A company should report simultaneously on sustainability topics that are: 1) financially material in influencing business values and; 2) material to the market, the environment, and people.
4. Greenhouse Gases (GHG):
GHG is any gas that absorbs infrared radiation in the atmosphere, thereby trapping heat and contributing to the greenhouse effect. The primary greenhouse gases are Water Vapor (H2O), Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N20), and Ozone (O3).
Promoting a product, service, or company as more environmentally-friendly than it truly is by falsely advertising environmental benefits.
A measure of the importance of specific topics and information considered to have an impact on decision making of users if the data or information was missing or incorrect.
7. Net Zero:
Net zero refers to achieving the balance between the carbon emitted by an entity or asset into the atmosphere, and the carbon removed from the atmosphere by the entity or asset.
8. Paris Agreement:
The Paris Agreement is an international accord that aims to limit the rise in global average temperatures to below 2 degrees Celsius above pre-industrial levels by the end of this century and pursue efforts to limit it to 1.5 degrees.
9. Triple Bottom Line:
The triple bottom line embraces the notion of focusing on “people, planet, profit” when making business and investment decisions, and not just on the profit motive. The term expands the traditional definition of a ‘bottom line,’ the net profit made by a company after accounting for all costs. It is also known as the ‘three Ps’ and provided an early framework for sustainable investing.
10. Zero Waste:
A set of principles that focus on preventing the generation of waste by redesigning products, rethinking how products are used, and reusing products with the goal that no waste is sent to landfills.
For a more comprehensive dictionary of ESG terms, visit our ESG dictionary.
NTG Environmental specializes in providing the energy industry with environmental solutions and sustainability consulting. In the face of a rapidly changing environmental, economic, and societal landscape, our purpose is simple: to help our clients be environmental stewards through customized and practical solutions. Our experts monitor ever-changing regulations to provide your business with defensible methods to achieve your goals. For more information on how we can serve you, contact us today!