With the holiday season behind us and Q3 in full swing, in true “back to school” style, the Mediatree Sustainability team thought it would be the perfect opportunity to brush up on sustainability terminology. Whether it be to impress your colleagues, or to leave a mark on your investors, this blog aims to provide an overview of some of the most frequently used sustainable terminology as well as the latest trendy jargon in the industry. Let us know what you think we’ve missed and we will continue to update this Blog Post as new terms emerge.

 

Common terms and phrases

There are many common terms within sustainability that are easily confused and conflated, meaning that crucial information could be incorrectly communicated to key stakeholders. Transparency within the world of Investor Relations (IR) remains critical and a broad understanding of the key terms found within the industry.

 

Carbon accounting: Also referred to as greenhouse gas accounting is a method used to calculate the total amount of CO₂ a business produces. This allows the organisation to purchase the correct amount of carbon credits to offset their emissions.

 

Carbon Credits: A way to compensate for CO2 emissions. There are two main types of carbon credits: carbon removal and carbon avoidance. Removal credits contribute to actively removing CO2 from the atmosphere, whereas avoidance credits contribute to minimising the volume of greenhouse gases being emitted.

 

Carbon offsetting: Is the process of compensating for CO₂ emissions by taking part in activities that reduce the equivalent amount of CO₂ in the atmosphere. Such activities can include forestation or investing in renewable energy projects.

 

Carbon Neutral: Carbon neutrality is achieved when the amount of CO₂ that is being removed from the atmosphere is equal to the amount of CO₂ that is being released into the atmosphere.

 

Circular economy: A system where materials never become waste and nature is regenerated. In a circular economy, products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, recycling and composting.

 

Greenwashing: is a form of conveying false or misleading information on the environmental impact of an organisation’s product, services or operations whether accidental or intentionally.

 

Net Zero: The UN defines Net Zero as cutting CO₂ emissions to a small amount of residual emissions that can be absorbed and durably stored by nature and other CO₂ removal measures, This process should theoretically leave zero CO₂ in the atmosphere.

 

Scope 1 Emissions: Direct emissions that occur from sources that are immediately owned or controlled by an organisation. An example of a scope 1 emission is the fuel consumption from company owned vehicles.

Scope 2 Emissions: Indirect emissions occurring where the energy an organisation purchases and uses is produced. An example of a scope 2 emission is the energy needed to power a business’s buildings.

Scope 3 Emissions: This includes all indirect emissions not included in scope 2, that occur in the value chain. Some examples of a scope 3 emission are investments, employee commuting and purchased goods and services.

 

Important abbreviations

With the continuous implementation of new sustainable reporting frameworks and governing bodies, the list of key sustainable abbreviations continues to grow. As regulations tighten for IR, it is important to understand the subtle differences between terms and to make sure that you are up to speed with the latest legislation.

 

CSR (Corporate Social Responsibility): A business model in which companies integrate social and environmental concerns in their business operations and interactions with stakeholders instead of only considering economic factors as a measure of success.

 

CSRD (Corporate Sustainability Reporting Directive): Legislation from the European commission that applies to all large companies and all listed companies (except listed micro-enterprises) that ensures investors and other stakeholders have access to the information needed to assess the financial risks and opportunities arising from climate change and other sustainability issues.

 

ESG (Environmental, Social and Governance): Refers to a set of standards used to measure an organisations social and environmental impact. This tends to incorporate data and metrics to help make informed decisions for both companies and investors.

 

GHG (Greenhouse Gas): Gases in the Earth’s atmosphere that trap heat by acting like the glass walls of a greenhouse (hence the name). Since the industrial revolution, an overabundance of these gases can be directly linked to climate change as they prevent the earth from cooling.

 

IPCC (Intergovernmental Panel on Climate Change):  An intergovernmental body of the United Nations whose job is to advance the scientific knowledge about climate change.

 

NFRD (Non-financial Reporting Directive): An EU directive that requires companies in scope to publish a non-financial report on their ESG performance alongside their annual management report. As of January 2024, this has been replaced by CSRD.

 

SBTI (Science Based Targets Initiative): A corporate climate action organisation that helps develop standards, tools and guidance to allow companies to set greenhouse gas emissions reduction targets.

 

SDG (Sustainable Development Goals): There are 17 sustainable development goals that were adopted by the United Nations in 2015 to help provide the blueprint for peace and prosperity. They cover a wide spectrum of issues ranging from ending poverty to responsible consumption.

 

SRI (Socially Responsible Investing): This is a screening process that is implemented to exclude certain listed companies from a portfolio based on the perceptions of their moral worth, environmental impact or other non-financial considerations.

 

Niche terms

Within the sustainability industry there are a plethora of new terms and phrases being coined, as technology and legislation and understanding continues to develop. This section aims to shine the light on the lesser known terms and phrases that have caught our eye in recent months:

 

Carbon Insetting: involves a company’s direct investment within its value chain to reduce emissions and store carbon. Unlike Carbon offsetting, insetting enhances a company’s overall sustainability by developing a more resilient supply chain, whilst supporting key ecosystems and communities within its sphere of influence.

 

Green hushing: refers to the growing trend of companies choosing not to publicise their sustainability targets to avoid being condemned for underachieving or greenwashing.

 

Green wishing: describes the practice of companies setting overly ambitious sustainability commitments that they do not have the means to fulfil. This is largely driven by growing pressure for businesses to set loftier targets, although failure to achieve those targets can be harmful for a brand’s reputation and damage consumer trust.

 

Internal Carbon Pricing (ICP): refers to a monetary value that companies place on greenhouse gas emissions, which businesses can then factor into investment decisions and business operations to drive positive change.

 

Scope 4 Emissions: the reductions in greenhouse gas emissions that occur outside of a products life cycle or value chain but as a direct result of using that product or service. An example of this is an energy efficient electrical appliance.

 

Whilst this is clearly not an exhaustive list (we didn’t want you ending up exhausted having read it), we hope that this blog provides a solid foundation of sustainable terms to set you up for success in the future. For a more in-depth understanding on some of these key words, please check out our previous blogs such as our post on Carbon Neutrality vs. Net Zero, which offer a greater insights into some of the terms outlined above and dives into how they can impact your business.