Below you will find explanations of terms related to the topic of sustainability.
Blog posts on the topic:
- Using impact analysis to act responsibly – along the entire supply chain
- How to measure sustainability – best practice at SAP
The Capitals Coalition is a global multi-stakeholder collaboration that brings together leading global initiatives and organizations. It works to rethink values in business and politics for a more just and sustainable world. To do this, it aims to establish "natural, social and human capital" alongside financial capital. Its goal is that by 2030, most companies, financial institutions, and governments will integrate these capitals into their decision-making. To achieve this, the Capitals Coalition provides companies with frameworks for measuring and assessing impacts on capitals through, for example, greenhouse gas emissions and training measures, as well as dependencies between capitals and individual aspects such as biodiversity.
The Carbon Disclosure Project (CDP) is a non-profit organization that manages a database on CO2 emissions and climate risks of companies, organizations, and municipalities. It has since been expanded to include water consumption. The data is collected annually on a voluntary basis.
CSR stands for Corporate Social Responsibility. This is understood to mean voluntary responsible business activity with regard to social and ecological sustainability. Special consideration is given to economic activity in harmony with the interests of stakeholders and beneficiaries.
Corporate Sustainability Reporting Directive (CSRD) is a proposed directive presented by the European Commission in April 2021. It aims to significantly expand the scope of companies subject to CSR reporting requirements. Thus, in addition to large companies, as well as all companies listed on EU stock exchanges would be subject to reporting requirements, with the exception of micro-entities. In addition, the CRSD sets out in more detail the non-financial information required for reporting.
The Value Balancing Alliance and the Capitals Coalition have partnered with the World Business Council for Sustainable Development (WBCSD) to develop a set of generally accepted environmental accounting principles, known as Environmentally Generally Accepted Accounting Principles (E-GAAP), on behalf of the European Commission. These are intended to help the private sector transition to a more sustainable financial and economic system. A common methodology is to help establish sustainable business practices in Europe and the rest of the world. Under the Transparent project, the three institutions are developing a standardized method for accounting and valuing natural capital that companies can use in their decision-making and external disclosure. The method will be based on already recognized frameworks such as the Natural Capital Protocol.
On behalf of the EU Commission, the European Financial Reporting Advisory Group (EFRAG) determines the specific financial information that must be disclosed and externally verified. Since 2020, EFRAG has also been working on a uniform reporting standard for sustainability criteria.
ESG stands for Environmental Social Governance and translates as "environment, social and corporate governance". ESG has established itself in the corporate and financial world as a broad umbrella term for indicators of corporate social responsibility. This term covers criteria that can be used to evaluate a company's corporate social responsibility (CSR). The type of corporate management also plays a decisive role. The criteria describe the intangible assets of a company and thus provide investors with information on whether and to what extent the company behaves sustainably. Accordingly, risks can be better assessed and investment decisions made
EU Green Deal
The European Green Deal is a concept presented by the European Union on December 11, 2019, that aims to achieve climate neutrality for Europe by 2050.
The GHG- Protocol (Greenhouse Gas- Protocol) provides the most widely used methodological standards for accounting for corporate greenhouse gas emissions worldwide. In addition to direct emissions (at the company site) and energy-related emissions, other parts of the supply chain are also analyzed, such as the proportional emissions of indirect and direct suppliers and emissions resulting from the transport of goods or product use. Within the GHG Protocol, the basic principles of relevance, completeness, consistency, transparency, and accuracy are established. The standards are intended to provide a framework for companies, governments, and other entities to measure and report their GHG emissions in a way that supports their missions and goals.
The GRI (Global Reporting Initiative) is an independent international organization that helps companies and other organizations take responsibility for their environmental and social impacts by providing them with a universal language for communicating those impacts. It is responsible for providing the world's most widely used sustainability reporting standards - the GRI Standards. They are considered the most comprehensive and comprehensive framework, are updated regularly, and include balanced economic, environmental, and social factors.
The Impact-Weighted Accounts Initiative is a Harvard Business School project aimed at integrating societal impacts through employment, products, and environmental aspects into corporate financial accounting. To this end, it is developing frameworks for pricing such impacts.
The socio-economically and ecologically extended Input-Output-Analysis is a recognized method of supply chain analysis, e.g. recommended by the Scope 3 standard of the GHG Protocol. The WifOR model is based on several official and scientifically recognized databases covering almost all economies of the world.Life Cycle Assessment (LCA)
Life Cycle Assessment (LCA) is defined as the systematic analysis and evaluation of the potential environmental impacts of products or services throughout their life cycle.
For the categorization of the greenhouse gas footprint, the emissions are divided into three so-called "scopes". Scope 1 refers to self-generated emissions, Scope 2 to emissions caused by purchased energy, and Scope 3 describes indirectly caused greenhouse gas emissions, such as those generated by suppliers. The GHG Protocol's standard for accounting and reporting on the value chain (Scope 3) enables companies to assess the impact of the entire value chain in terms of emissions and to determine where they need to focus their emissions reduction activities.
In September 2015, the United Nations General Assembly agreed on the Sustainable Development Goals (SDGs). These outline a new global agenda with a total of 17 goals to transform the world. Among other things, they aim to reduce hunger and poverty, improve global health, enable equality, and protect the planet. High-quality education for children and young people worldwide plays a central role in the SDGs.
SEEAThe System of Environmental Economic Accounting (SEEA) is the central framework for a global statistical standard that quantifies the environment in its relationship to the economy ("framing nature as an asset"). SEEA ecosystem accounting is an integral framework to measure and value ecosystem assets and their contributions to economic prosperity and human well-being (e.g., recreation, conservation, CO2 absorption). In March 2021, the UN made it the global standard for measuring and accounting for natural capital in national accounts.
Value Balancing Alliance (VBA)
The Value Balancing Alliance (VBA) is an association of multinational companies that was formed with the aim of creating a way to measure and compare the value of companies' contributions to society, the economy, and the environment. The resulting metric is a value that has not previously been reflected in a company's balance sheet. The special feature of the VBA is that it translates environmental and social impacts into comparable financial data, i.e. monetary values.
World Business Council for Sustainable Development (WBCSD)
The World Business Council for Sustainable Development (WBCSD) is a global organization of more than 200 companies working together to transform the world toward sustainability. It helps member companies internalize the concept of sustainable development and adapt their business operations.