Acronyms & Jargon

Sustainability language is filled with acronyms that are essential for businesses to understand in order to comply with regulations, attract investment, and implement sustainable practices. Here are 10 key sustainability-related acronyms relevant to businesses today, explained in simple terms.

1. CSRD (Corporate Sustainability Reporting Directive)

- What it means: A European Union directive that requires companies to report on their environmental, social, and governance (ESG) impacts.

- Why it matters: Businesses will need to report on their sustainability efforts in much more detail to comply with these new regulations, starting in 2024.

- Example: A company will have to report on how it reduces its carbon footprint, manages waste, and ensures fair labour practices across its supply chain.

2. ESG (Environmental, Social, and Governance)

- What it means: A set of criteria for evaluating a company’s operations based on its impact on the environment, its social responsibilities, and how it is governed.

- Why it matters: Investors use ESG metrics to assess whether a company is sustainable and responsible.

- Example: Companies with strong ESG practices might have better access to investment capital because they are seen as lower-risk and more future-proof.

3. GRI (Global Reporting Initiative)

- What it means: A global standard for sustainability reporting that provides guidelines for companies on how to disclose their environmental, social, and economic impacts.

- Why it matters: GRI helps businesses create sustainability reports that are transparent and comparable across industries.

- Example: A company might use GRI standards to report on its energy consumption, waste generation, and diversity in the workplace.

4. SBTi (Science Based Targets Initiative)

- What it means: A collaboration between various organisations that helps companies set greenhouse gas reduction targets based on the latest climate science.

- Why it matters: SBTi ensures that a company's climate goals align with the Paris Agreement, which aims to limit global warming to 1.5°C.

- Example: A company commits to reducing its emissions by 50% in the next decade, based on targets approved by SBTi.

5. TCFD (Task Force on Climate-Related Financial Disclosures)

- What it means: A framework that provides companies with recommendations on how to disclose climate-related risks and opportunities in their financial reporting.

- Why it matters: Investors and regulators are increasingly requiring businesses to provide transparent climate risk disclosures to better understand potential financial impacts.

- Example: A company reports the financial risks it faces from extreme weather events caused by climate change, following TCFD guidelines.

6. SDGs (Sustainable Development Goals)

- What it means: A set of 17 global goals set by the United Nations to address major global challenges such as poverty, inequality, and climate change by 2030.

- Why it matters: Companies can align their strategies with specific SDGs to contribute to global sustainability efforts.

- Example: A company might focus on SDG 13 (climate action) by investing in renewable energy to reduce its carbon emissions.

7. NFRD (Non-Financial Reporting Directive)

- What it means: The existing EU directive that requires large companies to report on their non-financial impacts, including environmental, social, and employee-related matters. This will soon be replaced by the more comprehensive CSRD.

- Why it matters: Companies must disclose information on how their operations impact the environment and society.

- Example: A company reports its initiatives on reducing plastic waste and improving employee well-being under the NFRD framework.

8. CDP (Carbon Disclosure Project)

- What it means: A global disclosure system that enables companies, cities, and governments to measure and manage their environmental impacts, particularly on climate change, water security, and deforestation.

- Why it matters: Investors and stakeholders use CDP data to assess how well a company is managing its environmental risks.

- Example: A company submits a report to the CDP detailing its carbon emissions and plans to reduce them over the next five years.

9. PRI (Principles for Responsible Investment)

- What it means: A set of principles supported by the United Nations that encourage investors to incorporate environmental, social, and governance (ESG) factors into their investment decisions.

- Why it matters: Companies that follow these principles may attract more investors looking for sustainable investment opportunities.

- Example: An investment firm commits to the PRI by integrating ESG factors into its portfolio decisions to invest in more sustainable businesses.

10. SASB (Sustainability Accounting Standards Board)

- What it means: An organisation that sets standards for disclosing sustainability information that is financially material to investors, based on industry-specific guidelines.

- Why it matters: SASB helps companies focus on the sustainability factors that matter most to their industry and that can affect their financial performance.

- Example: A mining company might report on its water usage and land reclamation efforts as these are material sustainability issues for that industry, as per SASB standards.

Why These Acronyms Matter to Businesses:

These acronyms are more than just jargon—they represent the standards, frameworks, and goals that businesses need to understand and adopt to remain competitive and compliant in today’s market. Whether it's complying with CSRD or reporting through GRI and TCFD, knowing these terms helps businesses manage risks, attract investors, and build a sustainable future.

Top 10 Business-Related Sustainability Acronyms Explained