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A Guide to the Essential ESG Acronyms You Need to Know

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Even Experts Need A Reminder of the ESG Alphabet Soup

At the first-ever ESG Data and Tech Summit London last month, moderators Andrew Delaney, A-Team Group President and Chief Content Officer, and Data Management Insight Editor Sarah Underwood sat before a backdrop adorned with ESG-related acronyms, initials and abbreviations.

As speakers and guests took their seats throughout the day, many made light-hearted comment on the alphabet soup behind them. Noticeably, a handful were actually baffled by some of the entries.

This was encouraging for your ESG Insight Editor, who has to wrestle with the industry’s shorthand every day, scrambling to web-search every new diminutive or contraction.

As a writer in a specialised field, it’s easy to feel intimidated by the C-suite dignitaries that it is my pleasure to interview each week. They’re experts in their field and can quickly pick holes in an interview question that doesn’t appear bedded in the same level of understanding they possess. The pressure is heightened by the prospect of having to remember the difference between very similar labels. I’m often convinced that ISSB and SASB, NFRD and CSRD, and TCFD and TNFD were so designed only to confused easily tongue-tied journalists.

We’re All Human

And so it was comforting to discover that even the most admired luminaries in the ESG ecosystem can suffer from the same sense of panic at discovering yet another addition to the acronym canon.

The experience also provided a salient reminder that, as an ESG writer, it’s important to remember than not everyone in such a young and active sector of financial services is an expert in all aspects of the discipline, and that we all need a helping hand sometimes.

Following the recommendation of our Chief Content Officer during one of the Summit’s lively debates, ESG Insight is providing you with that useful aid – we present a glossary of ESG terms that will hopefully help readers better follow our news, features and blogs.

By the very nature of ESG, this is a work in progress, so feel free to remind your editor of any missed or any new phrases you come across.

CDSB – Climate Disclosure Standards Board: The World Economic Forum’s reporting standards-setting body, since absorbed by the ISSB.

CSR – Corporate Social Responsibility: Self regulation adopted by businesses that seeks to align their actions with societal good

CSRD – Corporate Sustainability Reporting Directive: The European Union’s principal set of rules governing non-financial companies’ ESG disclosures.

CDP – formerly the Carbon Disclosure Project: Charity created to provide carbon reporting framework. Now works in partnership with ISSB.

CRD – The Corporate Reporting Dialogue: ****A set of eight providers of standards for corporate reporting, including traditional financial reporting bodies and those that address non-financial disclosure, such as those listed above.

ESG – Oh come on! Do you really need that explained?

GFANZ – Glasgow Finance Alliance for Net Zero: Coalition of major FIs committed to accelerating a carbon-free economy. Created in the run-up to the 2021 COP26 climate summit in Glasgow, Scotland.

GHG – Greenhouse Gases: Carbon dioxide, methane and other nasties whose accumulation in the atmosphere from human activities makes all of this necessary.

GRI – Global Reporting Initiative: United Nations-supported reporting standards body created by Ceres (formerly the Coalition for Environmentally Responsible Economies) and Tellus Institute.

ICGN – International Corporate Governance Network (ICGN): ****A platform to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies worldwide.

IIRC – International Integrated Reporting Committee: ****A coalition of regulators, investors, companies, accountants, academia, and NGOs aiming to evolve corporate reporting, aligned with the goals of financial stability and sustainable development.

IPCC – International Panel on Climate Change: United Nations body that provides research and suggestions on tackling climate change.

IRSG – International Regulatory Strategy Group:  UK-based advisory organisation that examines and recommends financial- and professional-sector regulations.

ISSB – International Sustainability Standards Board: The IFRS Foundation standards-setting body, which is seeking to bring global harmony to the patchwork of reporting standards.

NDCs – Nationally Determined Contributions: National plans to reduce carbon emissions, lodged in according to the Paris Agreement.

NFRD – Non-Financial Reporting Directive: The European Union’s law that enshrines the principles of sustainability reporting by large companies. The CSRD is an extension of this.

PAIs – Principal Adverse Impact indicators: Set of indicators against which FIs can gauge the sustainability of their investments as set out by the EU Taxonomy.

PACTA – Paris Agreement Capital Transition Assessment: An online tool that enables companies to assess their alignment with the goals of the Paris Agreement.

PRI/UNPRI – Principles for Responsible Investment: United Nations-supported guidelines for sustainable capital allocation.

RTS – Regulatory Technical Standards: The nuts-and-bolts framework on what is required to comply with European Union laws and regulations.

SASB – Sustainability Accounting Standards Board: A reporting framework and standards-setting organisation.

SBTi – Science-Based Targets initiative: Body created by the CDP, World Resources Institute, the World Wide Fund for Nature and the United Nations Global Compact to chart decarbonisation pathways for companies.

SDG – Sustainable Development Goals: The United Nations’ 17 bedrock targets that are a “blueprint to achieve a better and more sustainable future for all”.

SFDR – Sustainable Finance Disclosure Regulation: The European Union’s principal set of rules governing financial institutions’ ESG disclosures.

SRI – Socially responsible investing: The act of allocating capital to companies, assets and projects that contribute to sustainability targets.

TCFD – Taskforce on Climate-Related Financial Disclosures: The Financial Stability Board’s initiative created to improve and increase reporting of climate-related financial information.

TNFD – Taskforce on Nature-related Financial Disclosures: Risk management and disclosure framework for reporting on nature-related risks.

UNFCCC – United Nations Framework Convention on Climate Change: The UN treaty on tacking climate change. The underpinning of the world’s sustainability actions and targets.

VRF – Value Reporting Foundation: Non-profit organisation that created suite of financial value determination resources, including SASB. Now incorporated into ISSB.

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