ESG Glossary

India's mandatory ESG reporting framework for the top 1,000 listed companies, introduced by SEBI. Covers environmental, social, and governance topics.

The enforcement body for California's SB 253 climate disclosure law. CARB is developing the reporting registry and verification standards for Scope 1, 2, and 3 emissions.

An EU mechanism that puts a carbon price on imports of certain goods (steel, aluminium, cement, fertilisers, electricity, hydrogen) from outside the EU. Importers must report embedded carbon content.

A global non-profit that runs a disclosure system for companies, cities, states, and regions to manage their environmental impacts. CDP questionnaires are widely used by buyers to assess supplier environmental performance.

The EU's mandatory sustainability reporting directive, replacing NFRD. Requires large EU companies to report on ESG topics under ESRS standards. Includes value chain (Scope 3) reporting requirements that affect non-EU suppliers.

An EU directive requiring large companies to conduct due diligence on human rights and environmental risks in their supply chains. Unlike CSRD (reporting), CSDDD requires action — companies must prevent and remediate adverse impacts.

A widely used third-party ESG rating platform for supply chains. Many large buyers require their suppliers to complete an EcoVadis assessment. Ratings cover environment, labour & human rights, ethics, and sustainable procurement.

The reporting standards developed by EFRAG under CSRD. ESRS cover environmental (E1-E5), social (S1-S4), and governance (G1) topics. The VSME standard is a simplified version for SMEs in supply chains.

The world's most widely used greenhouse gas accounting standard. Developed by WRI and WBCSD, it defines Scope 1, 2, and 3 emissions and provides methodologies for calculating them.

An international organisation that provides a comprehensive sustainability reporting framework (GRI Standards). GRI is widely used for voluntary ESG reporting and is referenced in many buyer questionnaires.

An international standard for environmental management systems. ISO 14001 certification demonstrates that a company has a systematic approach to managing its environmental impacts. Often requested by buyers as evidence of environmental management.

Germany's Supply Chain Due Diligence Act, requiring companies with ≥1,000 employees in Germany to conduct annual due diligence on their supply chains for human rights and environmental risks.

An international social certification standard for decent workplaces. SA8000 covers child labour, forced labour, health and safety, freedom of association, discrimination, disciplinary practices, working hours, and remuneration.

California law requiring companies with >$1 billion annual revenue doing business in California to publicly disclose Scope 1, 2, and 3 GHG emissions. Scope 3 includes supply chain emissions.

UK mandatory reporting framework requiring large UK companies to disclose their energy use and Scope 1 and 2 carbon emissions in their annual reports.

Direct greenhouse gas emissions from sources owned or controlled by a company. Examples: burning fuel in company vehicles, natural gas in boilers, industrial process emissions.

Indirect emissions from the generation of purchased electricity, steam, heat, or cooling consumed by a company. The emissions occur at the power plant, but the company is responsible for them.

All other indirect emissions in a company's value chain — both upstream (from suppliers) and downstream (from customers). Typically represents 70-90% of a company's total emissions footprint.

A framework for disclosing climate-related risks and opportunities across governance, strategy, risk management, and metrics & targets. Mandatory for UK-listed companies and TSE Prime Market companies in Japan.

A simplified version of the European Sustainability Reporting Standards (ESRS) designed for SMEs that are not directly subject to CSRD but are in the supply chains of companies that are. Buyers will use VSME to request data from their SME suppliers.

New Zealand's standard-setting body for financial and sustainability reporting. XRB Aotearoa has developed climate-related disclosure standards (NZCS 1, 2, 3) based on TCFD recommendations.