Definitions

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Cc

Carbon Neutral - When a certain entity, within a defined set of boundaries, has reached a state in which it has limited its carbon emissions to a level of zero, or has reached a balance in which all the emissions it is generating are being offset by carbon reductions (or carbon savings) that are recognized by an international framework, to a level where the sum of all the emissions emitted and saved are zero. This can be done through emission removal projects (such as installing emission removing technology), and/or through purchased carbon offsets.

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Clean Revenue Classification System (Clean Revenue Taxonomy) - Developed by Corporate Knights, system that classifies G&S across all sectors having clear environment and - in limited number of well-defined cases, social - benefits. The system is reviewed and updated annually. Aligned with SASB standards, EU Sustainable Finance Taxonomy, CBI Taxonomy and many others.

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Circular Economy - Concept that is based on the principles of designing products and materials where the waste and pollution are incorporated into the life cycle of a product, so that the materials used in the creation of the goods are recovered and regenerated at end of each service life.

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by Corporate Knights




Clean Natural Gas (Green Natural Gas/Renewable Natural Gas RNG) - A gas typically from decomposing organic waste that is purified and can be distributed through existing gas grids.

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Cleantech - Cleantech is an umbrella term referring to the growing offering of products, services, innovations, and technological improvements available which reduce usage of natural resources or negative environmental impact. This is done typically through enhanced energy efficiency, improved or responsible use of natural resources, and/or reducing or eliminating greenhouse gas (GHG) emissions. Examples include water purification, carbon sequestration, enhanced battery storage, and renewable energies.




Climate-Related Risks and Opportunities - Climate change presents risks and opportunities to businesses related to the physical impacts of our changing climate (such as extreme weather events) and the transition to a low-carbon economy, transitioning away from fossil fuels to renewable electricity generation and other forms of energy. Climate change will enhance risk related to markets, supply chain, policy/legal and reputation. Businesses who recognize and plan for these risks can capitalize on opportunities for new products and services aligned with the global shift to a low-carbon economy.

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by Manifest Climate




Community Grievance Mechanism - A community grievance mechanism is a process for receiving, investigating, responding to, and closing out complaints or grievances from affected communities in a timely, fair, and consistent manner. CGMs work best as integral components of a company’s overall approach to community engagement, not as stand-alone processes or as a substitute for engagement. Without ongoing engagement, a CGM may be the only channel for external stakeholders to access a company, and may be used to make claims that are designed solely to gain company attention or that have already become acute and could threaten operations.





Corporate Social Responsibility (CSR) - The company’s approach to managing environmental and social factors that are relevant for a broad range of corporate stakeholders, including employees, customers and communities. ESG is a subset of CSR factors that can impact company value and investor decision-making. CSR factors can evolve rapidly to become ESG factors. Related terms: sustainability, corporate responsibility, corporate citizenship.

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by ESG Global Advisors







Dd

Duty of prudence or care - Every director must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, and be diligent in supervising and managing the corporation’s affairs.

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by Canada Climate Law Initiative







Ee

Environmental, Social, and Governance (ESG) - Environmental, social and governance factors that can impact company value and investor decision-making:
  • Governance factors include board quality, independence and accountability; board oversight of executive performance; and board oversight of company strategy, risk management, performance and disclosure, including for environmental and social factors
  • Financially-material environmental and social risks and opportunities such as climate change, water use, human capital management and safety
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Expectation Management - To be successful, a company needs to manage stakeholder expectation, which are based on real or assumed prior expectations. prioritize and clarify their customers expectations and then deliver while proactively managing expectations effectively. There are practical ways to address expectations, which have both an internal component (such as avoiding that staff inadvertently raise expectations as well as an external component (such as clarifying when perceived company promise is a real promise).







Ff

Fiduciary duty - Directors must act honestly and in good faith, with a view to the best interest of the corporation. The fiduciary duty is not confined to short-term profit or share value. Where the corporation is an ongoing concern, it looks to the long-term interests to the corporation.

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by Canada Climate Law Initiative





Framework vs. Standard - Standards provide specific and detailed instruction on how to prepare and structure relevant information. They provide direction on specific topics and associated performance metrics to prepare for the report. Standards include CSA Group, Global Reporting Initiative (GRI), and Sustainability Accounting Standards Board (SASB). A framework, on the other hand, is guidance only. Frameworks provide general guidance on principles on how to organize or structure the information. ESG frameworks include the Sustainable Development Goals (SDGs) and the International Council of Mining and Metals (ICMM) Sustainable Development Framework.

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Gg

GHG Emissions - Greenhouse gas emissions are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. Greenhouse gas emissions refer to the production of the above chemical compounds in gaseous form which, within the atmosphere of earth, trap heat and as a result, create a greenhouse effect on the Earth, leading to global warming.





Green bonds - Green bonds are fixed income debt instruments like any other bond that are specifically earmarked to raise money for climate and environment related projects. They are intended to encourage sustainability and support projects such as renewable energy projects, green buildings, waste management, and clean transportation. They offer a stated return and are issued by public, private or multilateral entities.

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by Canada Climate Law Initiative





Green taxonomy - A green taxonomy is a classification system that clarifies which investments are considered environmentally sustainable economic activities. It is a tool for issuers, investors, policymakers, and governments to help them understand what activities are considered green, and help shift investments to transition towards environmentally sustainable, net-zero carbon economies.

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by Canada Climate Law Initiative









Ii

Impact Investing - Investing with the specific intention of generating measurable positive social or environmental impacts, while seeking to achieve a financial return that may target either market or below-market rates. The impact criteria define and limit the universe of eligible investments. Investments may focus on themes, such as water or energy efficiency.

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by ESG Global Advisors




Investor Stewardship - Investor Stewardship encompasses investors engaging with companies to promote strong corporate governance practices, in order to create long-term value for shareholders and more widely, society. Examples of effective investor stewardship would be company engagements on specific issues, proxy voting, and engagements on wider public policy issues.

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by Millani







Jj

Just Transition - A set of principles, processes, and practices that enable the global transition to a green and low-carbon future while improving the lives of and jobs for all. The concept of a “just transition” draws a direct relationship between taking climate action with advancing social and economic progress for workers and their communities. The Preamble to the Paris Agreement notes all parties to the agreement will consider “the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.

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Mm

Materiality - In capital markets, an issue is deemed material if there is significant likelihood that a “reasonable investor” would consider it important in their investment decision process about buying, selling or holding a security or when voting.

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Microplastics - Microplastics are microscopic bits of plastic, up to 5 mm long, that detach from items made from plastic through every phase of the product’s lifecycle: Production, use, washing, disposal. Microplastics have been found throughout every part of our natural environment, including all of the Earth’s water sources, on top of Mount Everest and at the base of the Mariana’s Trench. Microplastics are a result of human use of plastics on Earth and usually end up (through the food chain) back in human bodies creating long-term health issues. Understanding of the impacts, dangers, and sources is a growing area of study.







Oo

Offsets - To achieve a lower carbon footprint or ultimately carbon neutrality/net zero, companies can purchase carbon offsets. Offsets (which are available from many third party vendors) provide the company with a “credit” on emissions in return for a fee. Those credits arise from activities that reduce or “save” emissions, such as the retirement of an emitting facility or equipment in favour of a non-emitting one, investment in renewable energy projects, or carbon sequestration.

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Oversight of disclosure - Public companies have disclosure obligations that include disclosing the risks facing the corporation. Misrepresentations can expose the corporation, its officers and its directors to both regulatory and civil liability.

Brought to you
by Canada Climate Law Initiative







Ss

Scenario Analysis - Climate scenario analysis explores what a company’s business environment might look like under different climate scenarios, such as deep decarbonization aligned with the Paris Climate Agreement, so as to integrate this information into a company’s strategy. Scenarios provide foresight to consider and manage the complexity that climate change presents to business decisions.

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by Manifest Climate




Social Performance / Integrated social performance - Social performance is the sum of a company’s interactions, activities and outcomes that can affect its stakeholders. Achieving good social performance means that a company needs to apply the same focus and rigor to the social aspects of the business as it does to every other part of the business. In other words, every employee and every contractor have a shared responsibility to get it right when it comes to potential social impacts, risks, and opportunities that relate to every company decision.





Social Performance Management System - A social performance management system is the sum of the components that provide as an effective and organized way of integrating social concerns into management decisions such that social risks are controlled, project impacts are mitigated and relationships are maintained.





Social Risk - Social risk is risk to the company (as opposed to risk to people, which is typically referred to as an impact) as a result of behavior and action of stakeholders. Social risk can manifest itself as a result of company policies, approaches or behavior or, alternatively, it can be caused be external factors such as the socio-political context of operations. If not adequately managed, social risk can result in opposition to the project, reputational and legal costs.





Socially Responsible Investment (SRI) - An investment strategy that includes or excludes investments based on the application of positive or negative screens, which come from a defined set of values.

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Sustainability Maturity Baseline - A Sustainability Maturity Baseline is an self-assessment of a company’s employment of overall sustainability strategy and resulting impact whether through one subsidiary or throughout the entire value chain. The level of analysis undertaken is around sustainability tactics and strategy employed by the subject to inform a common holistic understanding among decision makers in a given company. Results are delivered via data and gap analysis. Companies can use this assessment to inform future resource allocation for strategy tactics implementing greater levels of sustainability throughout the given subject.




Solution Set - A Solution Set refers to a stack of globally-sourced mature, clean and/or innovative technologies which, when combined, allow a company to mitigate or fully eliminate the negative environmental impact associated with their product or service. A Solution Set offers a quantum-leap in positive impact that can not be achieved by continuous improvement on legacy technologies.







Tt

Task Force on Climate-Related Financial Disclosures (TCFD) - In 2017, the G20’s Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) released recommendations for climate reporting. The TCFD recommendations are widely recognized as best practice for financial and non-financial businesses reporting on climate change risks and opportunities. The recommendations call for businesses to provide 11 climate-related financial disclosures structured around governance, strategy, risk management, and metrics and targets, covering processes related to climate-related physical and transition risks and opportunities.

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by Manifest Climate







Vv

Value-Reporting Foundation - According to the Foundation, “The Value Reporting Foundation is a global nonprofit organization that offers a comprehensive suite of resources designed to help businesses and investors develop a shared understanding of enterprise value - how it is created, preserved and eroded.” It came to be from a merger of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC). The merger brings together the ESG specifics and comparability of SASB with the investor- and value-focused approach of the Integrated Reporting framework.

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