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ESG Glossary

ESG is an industry of acronyms, and the lexicon is constantly expanding. Terms that don’t have the same definition are often used interchangeably and the overwhelming number of acronyms can be difficult to keep track of. To help you become a subject matter expert, our ESG glossary contains a list of important industry terms that every organization and professional should know.

A

ASHRAE

The American Society of Heating, Refrigerating and Air-Conditioning Engineers is an American professional association seeking to advance heating, ventilation, air conditioning and refrigeration systems design and construction. ASHRAE has more than 57,000 members in more than 132 countries worldwide.

B

Benchmarking

The practice of measuring how much of a utility a building consumes (energy, water, etc.) or produces (waste, etc.) and comparing that against other, similar buildings.

BOMA

The Building Owners and Managers Association is a professional organization for commercial real estate professionals based in the United States and Canada.

C

Carbon footprint

A measure of the total greenhouse gas emissions produced by an individual, group, or company.

CDP

CDP, formerly known as the Carbon Disclosure Project, is an organization which supports companies and cities to disclose the environmental impact of major corporations. It aims to make environmental reporting and risk management a business norm, and drive disclosure, insight and action towards a sustainable economy.

Climate change

A shift in weather patterns due to a heating of the Earth's atmosphere, highly attributed to the burning of fossil fuels and other polluting activities that cause a release of greenhouse gasses.

CSR

Corporate social responsibility is a type of international private business self-regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.

CSR report

A CSR report is a periodic (usually annual) report published by companies with the goal of sharing their corporate social responsibility actions and results.

D

Divestment

The act of dissociating or selling assets and securities due to behavior not aligned with ESG values, or as a way to display strong commitment to ESG and responsible investing practices.

E

ENERGY STAR

ENERGY STAR is a program run by the U.S. Environmental Protection Agency and U.S. Department of Energy that promotes energy efficiency. The program provides information on the energy consumption of products and devices using different standardized methods.

ENERGY STAR certification

To be eligible for ENERGY STAR certification, a building must earn an ENERGY STAR score of 75 or higher, indicating that it performs better than at least 75% of similar buildings nationwide.

ENERGY STAR Partner of the Year award

This award recognizes ENERGY STAR partner businesses and organizations in good standing that demonstrate superior leadership, innovation, and commitment to environmental protection through energy efficiency and ENERGY STAR.

Environmental factors

The "E" in ESG, environmental factors include things like climate impact and environmental challenges and opportunities, such as energy use, waste production & management, climate change, pollution, etc.

ESG

Environmental, Social, and Governance refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help to better determine the future financial performance of companies.

ESG fund

Portfolios that explicitly apply environmental, social, and governance criteria in the decision-making process when selecting investments.

ESG integration

Explicitly including environmental, social, and governance factors during the investment process, specifically with the goal of long-term performance growth and risk mitigation.

F

Fitwel

Fitwel is a leading green building certification for new and existing properties of all sizes. Fitwel provides a rank of one to three stars based on a property's performance in 55+ design & operational strategies divided into seven health impact categories.

G

Governance factors

The "G" in ESG, governance factors relate to how a company is run, which includes things like management structure, compensation, internal controls and accountability policies, shareholder rights, and more.

Greenwashing

Promoting a product, service, or company as more environmentally-friendly that it truly is by falsely advertising environmental benefits.

GRESB

GRESB is an investor-led and mission-driven initiative to provide ESG data on real asset investments to investors, managers and the wider industry. GRESB Assessments provide a consistent framework to measure ESG performance based on self-reported data that is validated, scored and peer benchmarked. Their approach allows investors to analyze their portfolios for ESG risks, opportunities and impacts and engage with managers on their performance.

GRI

The Global Reporting Initiative is an independent organization that lays out a set of international standards to help business and government entities understand and communicate their impact on issues like climate change and human rights.

I

Investment stewardship

Investment stewardship involves engaging public companies as a way to advocate for corporate governance policies and practices that promote long-term stakeholder value creation.

IPCC

The International Panel on Climate Change is a body created by the United Nations with the intention of providing scientific assessments on climate change, its impact, and future risks, as well as suggestions for mitigating impact and disruptions.

L

LEED

Leadership in Energy and Environmental Design is a worldwide green building certification program. It is applicable to all building types and phases.

M

Materiality

Materiality is a measure of the importance of specific topics and information during the investment process. The more significant a topic is, the more material it is, and vice versa.

P

PRI

Principles for Responsible Investment is a United Nations-supported international network of investors working together to implement its six aspirational principles, often referenced as "the Principles".

R

Renewable energy

Energy attained from perpetual, unending sources, such as collection of energy with solar panels or wind turbines.

Responsible investing

A philosophy that includes ESG factors during the investment selection, portfolio construction, and monitoring processes, with the goal of maximizing opportunities, ensuring high performance, and mitigating risks.

RobecoSAM

RobecoSAM is an investment specialist focused exclusively on Sustainable Investing. Serving institutional asset owners and financial intermediaries, the company’s asset management capabilities feature a strong track record in sustainability-themed strategies.

S

SASB

The Sustainability Accounting Standards Board is a non-profit organization founded to develop sustainability accounting standards.

Science-based targets

Science-based targets provide a roadmap for companies to future-proof growth by creating a roadmap of how much to reduce carbon emissions and how quickly the reduction needs to happen.

SDG alignment

Aligning business strategies and operations with the 17 Sustainable Development Goals created by the United Nations Global Compact.

Social factors

The "S" in ESG, social factors relate to how a company treats employees and the community, and includes things like employee engagement programs, human rights policies, health and wellbeing initiatives, and employee and consumer protection.

SRI

Socially responsible investing involves investments considered socially responsible through the nature of the business conducted, which includes factors like socially conscious investing, human rights policies, and emphasis on positive social impacts.

Stranded asset

An asset that once produced value or profit, but no longer does due to changes such as technological advancements, market shifts, societal habits, and more.

T

TCFD

The Task Force on Climate-related Financial Disclosures was developed to provide recommendations for more effective climate-related disclosures that promote more informed investment, credit, and insurance underwriting decisions, which in turn would enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.”

U

ULI

The Urban Land Institute is a nonprofit research and education organization whose mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.

UNGC

The United Nations Global Compact is a non-binding United Nations pact to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation.

UNPRI

The United Nations Principles for Responsible Investment is an international network of investors working together to implement its six aspirational principles, often referenced as "the Principles".

V

Values-based investing

Applying an organization's core values as a main driver during the investment selection process.

W

WELL

The International WELL Building Institute is a leading tool for advancing health and well-being in buildings globally.

Z

Zero waste

A set of principles that focus on preventing the generation of waste by redesigning products, rethinking how products are used, and reusing products with the goal that no waste is sent to landfills.