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Numbers
1.5 °C
As the Paris Agreement outlines, 1.5 °C is the ideal and agreed-upon threshold of global temperature rise by 2050 compared to pre-industrial levels. The world must reach net zero emissions by 2050 to achieve this goal.
2 °C
2 °C is the temperature rise over pre-industrial level temperatures that is the threshold for avoiding climate catastrophes and irreversible damage to the planet.
A
Accuracy gap
The accuracy gap is the difference between calculated emissions and those produced. Accurate carbon accounting efforts can lead to a minimal or zero accuracy gap in emissions reporting.
Activity data
Activity data measures activity, for example, buying fossil fuels that produce greenhouse gas emissions. It is defined for a specific period, represented in units appropriate for the activity (e.g., tonnes of waste sent to landfills or kilowatt hours of energy consumed).
Additionality
Additionality is a term linked with the voluntary carbon market. It defines emission reductions or carbon removal that would not have occurred without a carbon offset market.
Air quality index (AQI)
The air quality index indicates air quality, expressing how clean or polluted the air is. The AQI runs on a scale from zero to 500, with an AQI of 50 or below being safe, while readings above 100 are deemed unhealthy.
B
Base year
The base year is the year that is used to set the net zero emissions goals. The annual reduction targets are set based on the emissions produced during the base year. For instance, 1990 is the base year for the Kyoto Protocol.
Bio-oil
Bio-oil, in the context of climate change, refers to burning agricultural waste without oxygen and injecting the resultant oil into the ground. It is a carbon removal method that is permanent.
Biochar
Biochar is produced by heating agricultural waste (biomass) to remove carbon dioxide. It is turned into a substance that looks like charcoal and is used as fertiliser for the soil.
Biodiversity
Biodiversity refers to the variety of life (animals, plants, and microorganisms) found on Earth.
C
Cap and trade
Cap and trade is a market-based approach to reducing greenhouse gas emissions. Governments set limits (or a cap) on how much emissions a company can produce. Companies can also trade their allowances with each other if they produce less emissions than their cap or want to exceed the limit.
Carbon accounting
Carbon accounting refers to the measurement of greenhouse gas emissions an organisation produces. It is used for reporting purposes and for strategising environmental policies to reduce emissions.
Carbon budget
The carbon budget is used to determine climate policy and set emission targets. The cumulative net global carbon dioxide emissions can limit global warming and stop climate change. Emissions above the carbon budget will raise global temperatures.
Carbon credit
A carbon credit or offset permits the holder to emit a specified amount of greenhouse gas emissions. In cap and trade systems, carbon credits/offsets can be traded.
Carbon dioxide
Carbon dioxide is a gas that naturally occurs in the atmosphere. Too much carbon dioxide in the atmosphere can heat the planet. It is also produced due to a wide range of human activities, such as burning fossil fuels, industrial processes, and waste.
Carbon dioxide equivalent
Carbon dioxide equivalent (CO2e) is the amount of greenhouse gas equal to the amount of carbon dioxide it would take to warm the planet. It helps measure the impact of different greenhouse gases in a singular unit. For instance, 1 kg of methane is 29.8 CO2e.
Carbon Disclosure Project (CDP)
The CDP is a framework for organisations, cities, and countries to report their emissions and overall environmental impact.
Carbon footprint
Carbon footprint represents all the greenhouse gas emissions by an entity or activity.
Carbon management
Carbon management is an organised approach to reducing a company’s carbon emissions and achieving timely climate targets.
Carbon markets
Carbon markets are trading systems for buying and selling carbon credits.
Carbon neutral
An entity is carbon neutral if it neither adds nor removes carbon emissions from the environment.
Carbon negative
An entity or activity is carbon negative if its net result removes greenhouse gases from the environment. It is the next step to prevent climate change after net zero emissions.
Carbon reduction
Carbon reduction refers to the reduction of greenhouse gas emissions. Various activities and policies aim to reduce carbon dioxide and other greenhouse gas emissions, for example, switching to renewable energy or recycling plastics.
Carbon removal
Carbon removal is the process of removing carbon dioxide from the atmosphere and storing it so that it cannot be emitted back into the atmosphere.
Carbon sequestration
Carbon sequestration refers to storing carbon dioxide in a place where it will not impact the environment and climate.
Carbon sink
Carbon sink refers to the storage where the carbon dioxide removed from the atmosphere is stored.
Carbon target
A carbon target is a specified amount of emissions to be reduced by the end of a specified period.
Carbon tax
A carbon tax is a tax on carbon emissions produced by companies. It is a scheme to reduce carbon emissions by making emissions taxable and incentivising efforts to reduce carbon footprint.
Carbon token
A carbon token is a digital representation of a carbon credit on the blockchain.
Clean energy
Clean energy is obtained from sources that do not emit harmful environmental pollutants, for example, hydropower.
Clean technology
Clean technologies are technologies (products or processes) that help reduce greenhouse gas emissions and promote sustainability.
Climate adaptation
Climate adaptation refers to policies and measures to adapt to the potential impacts of climate change.
Climate change
Climate change refers to long-term variations in weather patterns and temperatures, which can be natural and human-induced.
Climate investment
Climate investment refers to activities such as offsetting and removal that help remove carbon dioxide from the environment.
Climate mitigation
Climate mitigation refers to practices that aim to reduce greenhouse gas emissions that warm the planet and cause climate change.
Climate positive
Climate positive means that an activity goes beyond achieving net zero carbon emissions to actually create an environmental benefit by removing additional carbon dioxide from the atmosphere.
CO2 mineralisation
CO2 mineralisation involves the conversion of atmospheric carbon dioxide into solid mineral form (carbonate). It can happen naturally or artificially.
Conference of the Parties (COP)
COP is an annual United Nations (UN) conference on climate change. It brings together leaders worldwide to discuss the progress of reducing emissions and strategies to reach climate targets.
Corporate social responsibility (CSR)
CSR are policies in organisations that aim to impact the world positively.
Corporate sustainability
Corporate sustainability is a business strategy that involves producing goods or services following environmentally sustainable practices.
Corporate Sustainability Reporting Directive (CSRD)
The CSRD is the new standard for reporting greenhouse gas emissions that impact European Union (EU) companies. CSRD will apply to over 49,000 companies in the block.
D
Danish ‘Klimalov’
The Danish ‘Klimalov’ or Danish Climate Act commits Denmark’s obligation to reduce carbon emissions by 70% by 2030 (compared to 1990 levels).
Decarbonisation
Decarbonisation is the process of reducing carbon emissions an entity or process produces.
Direct air capture (DAC)
DAC is the process of removing carbon dioxide directly from the atmosphere. It is typically combined with carbon mineralisation to remove carbon dioxide in the air.
Direct emissions
Direct emissions are emissions generated by the operations of the company. In terms of the GHG Protocol, Scope 1 emissions are direct emissions.
Double-counting
Double-counting refers to a carbon investment sold multiple times. For instance, two companies pay for the same carbon removal project to offset their emissions.
Downstream emission
Downstream emissions are generated by using or disposing of a company’s goods or services. These are different from the emissions emitted during the production of goods or provision of services.
E
Energy Efficiency Directive (EED)
EED is a European Union (EU) directive that requires member states to become energy-efficient. The initial target of 9% was revised in 2014 and increased to 30% energy efficiency by 2030.
Emission factor
An emission factor is a representative value used to calculate the number of greenhouse gases an activity generates.
Emission rights
In carbon emission cap and trade policies, companies are allocated emission rights to use or sell to another company.
Emission trading
Emission trading, also called cap and trade, is a market-based approach to incentivize curbing greenhouse gas emissions by setting a quota of allowable emissions. Companies can trade emission quotas or carbon credits if they have a surplus.
Emissions
In the context of climate change, emissions are substances (greenhouse gases) emitted into the atmosphere from materials, processes, and human activities.
Energy optimisation
Energy optimisation is making energy use more efficient while maintaining the best performance.
Energy efficiency
Energy efficiency is the use of less energy for products or services.
Enhanced weathering
Enhanced weathering is a carbon capture technology that involves depositing rock particles into the ocean. It aims to accelerate neutral weathering and increase ocean alkalinity.
Environmental management system (EMS)
An EMS is designed to enable organisations to reduce their carbon footprint. It can be developed in compliance with the ISO 14001 standard.
Energy Performance of Building Directive (EPBD)
The EPBD is a European Union (EU) directive to promote energy efficiency in buildings in the EU.
ESG reporting
ESG reporting refers to companies reporting environmental, social, and governance impacts.
EU Green Deal
The European Union (EU) Green Deal is an initiative by the European Commission for the EU to become climate neutral by 2050.
EU Taxonomy
The EU Taxonomy is a classification system for companies, investors, and policymakers determining which activities and investments are environmentally sustainable.
Electric Vehicle (EV)
An EV is powered by an electric motor that draws energy from a battery. As opposed to vehicles with combustion engines, EVs are eco-friendly.
E-waste
Electronic waste or e-waste is waste from electronic products and their components.
F
Financed emissions
Financed emissions are greenhouse gas emissions linked with financial activities such as investing and lending.
Fossil fuels
Fossil fuels are found in the Earth’s crust, formed by decomposing plant and animal matter. Oil, natural gas, and coal are examples of fossil fuels. These fuels can be converted into energy.
Fugitive emissions
Fugitive emissions refer to unintentional and undesirable gas and vapour leaks, for example, gas leaks in faulty equipment.
G
Greenhouse Gas (GHG) Protocol
The GHG Protocol provides a framework for carbon accounting. Its reporting standard is widely used by governments and businesses worldwide.
Global warming
Global warming refers to heating the planet’s surface due to human activities. It occurs due to greenhouse gas emissions that heat the environment and cause climate change.
Global warming potential (GWP)
GWP measures how much energy the emissions of one tonne of a gas will absorb over a given timeframe, with one tonne of carbon dioxide as the reference. GWP helps measure the global warming impact of different greenhouse gases.
Green bond
A green bond is an investment instrument specifically used to raise money for environmental projects. The bonds are usually secured with assets with the same credit rating as the issuer.
Green economy
A green economy produces little to no greenhouse gas emissions, is resource efficient, and focuses on sustainable and socially inclusive development and growth.
Greenhouse effect
The greenhouse effect is the entrapment of greenhouse gases, for example, carbon dioxide, around the Earth’s surface that cause atmospheric temperatures to rise. It is a natural process that can be accelerated due to human activities.
Greenhouse gas (GHG)
A GHG is a gas that traps heat in the Earth’s atmosphere as it absorbs radiant energy. They are responsible for the greenhouse effect, which, in turn, is causing global warming. Carbon dioxide, methane, and nitrous oxides are examples of GHG.
Greenwashing
Greenwashing is providing and marketing false or inaccurate information about a company, activity, or product’s sustainability. It can be deliberate or unintentional.
Global Reporting Initiative (GRI)
GRI is an independent international organisation that facilitates companies, governments, and non-profit organisations to understand their environmental impact. It provides industry-specific guidelines and standards for reporting emissions.
I
Impact investing
Impact investing refers to investments that aim to create a positive social or environmental impact in addition to financial profits.
Indirect emissions
Indirect emissions are the emissions a company produces by purchasing energy and their value chain. Per the GHG protocol, Scope 2 and Scope 3 emissions are indirect.
Intergovernmental Panel on Climate Change (IPCC)
IPCC is a United Nations (UN) body tasked with researching climate change caused by human activities.
K
Kyoto Protocol
The Kyoto Protocol was an agreement among many developed nations to fight climate change. Signed in 1997, it was replaced by the Paris Agreement in 2015.
L
Leakage
In the context of climate change and emissions, a leakage in a carbon removal project indicates that it will have negative consequences elsewhere.
Life cycle assessment (LCA)
LCA is a method for assessing the environmental impact of a product or service through different stages of its life.
M
Materiality assessment
Materiality assessment involves identifying and defining the social and environmental areas of impact that are most valuable for a company and its investors and stakeholders.
Markets in Financial Instruments Directive (MiFID II)
The MiFID II is a European Union (EU) act that provides a framework for securities markets, investment intermediaries, and trading venues.
N
Net zero
Net zero describes a balance where the net greenhouse gases emitted are zero, typically achieved by balancing greenhouse gas emissions with equivalent removal from the atmosphere.
Net zero journey
Net zero journey is achieving net zero status, typically through decarbonization and climate investments.
Non-Financial Reporting Directive (NFRD)
NFRD is a European Union (EU) legislation that requires large enterprises to disclose their environmental impact and issues such as human rights violations, corruption, or other social issues.
P
Paris Agreement
The Paris Agreement is an international treaty to limit global temperatures well below 2 °C above the pre-industrial levels or ideally by 1.5 °C. It was signed by almost all the countries in the world in 2015.
Paris-aligned
Carbon targets are referred to as Paris-aligned if they limit global warming according to the target set by the Paris Agreement (temperature rise well below 2 °C).
Partnership for Carbon Accounting Financials (PCAF)
The PCAF is a global partnership of financial institutions to measure and report greenhouse gas emissions of financial activities like loans and investments.
Permanence
In the context of carbon removal projects, permanence refers to carbon that will remain sequestered, thereby staying out of the air for good.
R
Recycling
Recycling is the process of converting waste into new products.
Renewable energy
Renewable energy is derived from natural sources that can be replenished, such as sunlight or wind.
S
Sustainability Accounting Standards Board (SASB)
The SASB, founded in 2011, is an organisation that provides standards for companies and industries to report their environmental impact.
Science-Based Targets Initiative (SBTi)
The SBTi is an initiative by multiple climate and social organisations to provide and promote a framework for setting achievable targets for different industries.
Science-based target
Science-based targets are backed by scientific research that demonstrates how those targets can limit global warming.
Scope 1
Per the GHG Protocol, Scope 1 emissions are direct emissions emitted by a company through its business activities.
Scope 2
Per the GHG Protocol, Scope 2 emissions are emissions resulting from the purchase of energy by a company.
Scope 3
Per the GHG Protocol, Scope 3 emissions are indirect emissions produced by a company’s value chain. These include emissions from activities that the company does not control or own.
Sustainable Financial Action Plan (SFAP)
The SFAP is a European Union (EU) policy to promote sustainable investments across member states.
Sustainable Finance Disclosure Regulation (SFDR)
The SFDR mandates environmental, social, and governance (ESG) disclosure by asset managers and other participants in the financial markets in the European Union (EU).
SME Climate Commitment
SME Climate Commitment, facilitated by SME Climate Hub, refers to the commitment made by small and medium enterprises to cut their emissions by half by 2030 and achieve net zero status by 2050.
Spend-based data
In carbon accounting, the spend-based method of calculating greenhouse gas emissions considers the value of a purchased good or service. As opposed to activity-based data, spend-based data only includes financial information.
Supply chain emissions
The supply chain of a company is responsible for supply chain emissions. These come under Scope 3 emissions.
Sustainability reporting
Sustainability reporting involves reporting data on environmental and social performance and disclosing policies and initiatives a company has taken to reduce its emissions.
Sustainable Development Goals (SDG)
The SDGs are goals set by the United Nations General Assembly (UNGA) in 2015 for achieving sustainability and economic and social prosperity. There are 17 SDGs with 169 targets, covering critical global issues such as poverty, inequality, and climate change.
T
Task Force on Climate-related Financial Disclosure (TCFD)
The Financial Stability Board created the TCFD to set guidelines for climate-related financial reporting.
Tree planting
Tree planting is a climate mitigation and carbon removal strategy aiming to increase reforestation by planting trees in deforested lands or where forests do not exist.
U
United Nations Framework Convention on Climate Change (UNFCCC)
The UNFCCC is an international treaty to control and stop dangerous human intervention in the climate system. It was formed in 1992, and there are now 198 parties.
United Nations Global Compact
The United Nations Global Compact initiative encourages companies to follow environmentally and socially sustainable practices and report implementation.
Upstream emissions
Upstream emissions are a company’s indirect emissions that occur upstream from the value chain. These are Scope 3 emissions.
V
Value chain emissions
Also called Scope 3 emissions, value chain emissions are a company’s upstream and downstream emissions produced by its value chain.
Voluntary emissions reduction (VER)
VER are carbon offsets traded in voluntary carbon markets, which are not mandated or regulated by the government.
W
Waste stream
A waste stream is the complete flow or lifecycle of waste, from source to disposal.
Z
Zero waste
Zero waste refers to waste prevention through various approaches, such as recycling, reusing, and repurposing.
