Environmental, Social, and Governance (ESG) principles are reshaping business landscapes, driving sustainability and ethical practices.
This ESG glossary provides detailed definitions of over 50 critical ESG terms, offering three-line explanations to enhance your understanding of ESG terminology. Brought to you by Tekmon, this guide empowers organizations to navigate ESG frameworks effectively.
Why Understanding ESG Terms Matters
Mastering ESG terminology is essential for aligning with global sustainability standards and stakeholder expectations. A clear grasp of these terms enables businesses to implement effective strategies, comply with regulations, and communicate transparently. Tekmon’s ESG software supports this by automating data collection and reporting, ensuring your organization stays ahead in the ESG landscape.
ESG Glossary: 50 Essential ESG Terms
1. Biodiversity
The variety of life in ecosystems, vital for ecological balance. Protecting biodiversity reduces environmental harm and supports ESG goals. Companies assess impacts to preserve habitats and species.
2. Carbon Credits
Tradable units allowing a set amount of CO2 emissions. They help companies offset emissions to meet ESG targets. Tekmon’s platform tracks credits for accurate reporting.
3. Carbon Footprint
The total greenhouse gas emissions from an entity’s activities. Reducing it is critical for ESG environmental strategies. Tekmon automates emissions calculations for precise tracking.
4. Circular Economy
A model emphasizing reuse, recycling, and waste reduction. It promotes sustainable resource use in ESG frameworks. Businesses adopt it to minimize environmental impact.
5. Climate Risk
Risks from climate change, like extreme weather or regulations. ESG policies mitigate financial and operational impacts. Tekmon’s tools help assess and manage these risks.
6. Corporate Social Responsibility (CSR)
A company’s commitment to ethical and sustainable practices. It overlaps with ESG, focusing on community and environmental impact. CSR enhances stakeholder trust and ESG alignment.
7. Decarbonization
Reducing carbon emissions to achieve net-zero goals. It’s central to ESG environmental strategies. Tekmon’s software tracks progress with automated GHG calculations.
8. Diversity, Equity, and Inclusion (DEI)
Policies ensuring fair representation and opportunities. DEI is a key social ESG metric for inclusive workplaces. Tekmon’s platform monitors DEI KPIs for compliance.
9. Double Materiality
Evaluating ESG impacts on both the company and society. It guides prioritization of key issues in ESG strategies. Tekmon simplifies materiality assessments with tailored tools.
10. Emissions Scopes
Categories of emissions (Scope 1: direct, Scope 2: energy, Scope 3: value chain). They’re essential for ESG reporting accuracy. Tekmon calculates all scopes seamlessly.
11. Energy Efficiency
Using less energy for the same output, cutting costs and emissions. It’s a core ESG environmental metric. Tekmon integrates energy data for real-time insights.
12. ESG Disclosure
Public reporting of ESG performance to stakeholders. It’s often mandated by frameworks like GRI or ESRS. Tekmon streamlines disclosures with pre-built templates.
13. Ethical Investing
Investments prioritizing moral and sustainability criteria. It aligns with ESG to drive positive impact. Investors use ESG data to guide decisions.
14. Fair Trade
Ensuring fair wages and conditions for producers in developing regions. It supports social ESG goals for ethical supply chains. Companies adopt fair trade to enhance social impact.
15. Gender Pay Gap
The earnings disparity between men and women. Addressing it is a social ESG priority for equity. Tekmon tracks DEI metrics to monitor progress.
16. Global Reporting Initiative (GRI)
A framework for standardized ESG reporting. It ensures transparency in sustainability disclosures. Tekmon’s platform supports GRI with pre-built templates.
17. Green Bonds
Financial instruments funding eco-friendly projects like renewable energy. They support ESG financing goals. Investors use them to align with sustainability priorities.
18. Greenhouse Gas (GHG) Protocol
A global standard for measuring emissions. It guides ESG reporting for accurate data. Tekmon automates GHG calculations for compliance.
19. Human Rights Due Diligence
Assessing risks to human rights in operations. It’s a social ESG requirement for ethical practices. Tekmon ensures auditable data for compliance.
20. Impact Investing
Investments seeking social or environmental benefits alongside returns. It aligns with ESG for positive outcomes. Tekmon tracks impact metrics for transparency.
21. Just Transition
Supporting workers during the shift to a low-carbon economy. It’s a social ESG principle for fairness. Companies plan transitions to minimize social disruption.
22.Key Performance Indicator (KPI)
Measurable metrics tracking ESG progress, like emissions or diversity. They guide goal-setting and reporting. Tekmon’s dashboards visualize KPIs for insights.
23. Life Cycle Assessment (LCA)
Analyzing a product’s environmental impact from creation to disposal. It informs ESG decision-making. Companies use LCA to reduce ecological footprints.
24. Materiality Assessment
Identifying key ESG issues for a company and stakeholders. It prioritizes efforts for maximum impact. Tekmon’s tools streamline stakeholder engagement for assessments.
25. Net-Zero
Balancing emitted and removed greenhouse gases. It’s a primary ESG environmental target. Tekmon tracks net-zero progress with custom dashboards.
26. Non-Financial Reporting
Disclosing ESG and sustainability performance. It’s often required by regulations like ESRS. Tekmon simplifies reporting with automated workflows.
27. Paris Agreement
A global treaty to limit temperature rise. It shapes ESG strategies for emissions reduction. Companies align goals with their targets for compliance.
28. Renewable Energy
Energy from sustainable sources like solar or wind. It reduces fossil fuel reliance in ESG frameworks. Tekmon tracks energy data for efficiency.
29. Responsible Sourcing
Procuring materials ethically to minimize harm. It supports ESG supply chain sustainability. Tekmon’s tools ensure supplier data accuracy.
30. SASB (Sustainability Accounting Standards Board
Industry-specific ESG reporting standards. They enhance transparency and comparability. Tekmon supports SASB with pre-built frameworks.
31. Science-Based Targets
Emission reduction goals aligned with climate science. They support ESG net-zero commitments. Tekmon automates tracking for compliance.
32. Scope 1 Emissions
Direct emissions from company-owned sources, like vehicles. They’re critical for ESG reporting accuracy. Tekmon calculates Scope 1 with precision.
33. Scope 2 Emissions
Indirect emissions from purchased energy, like electricity. They’re a focus for ESG reduction strategies. Tekmon integrates energy data for tracking.
34. Scope 3 Emissions
Indirect emissions from the value chain, like suppliers. They’re challenging but vital for ESG. Tekmon streamlines Scope 3 data collection.
35. Social Impact
The effect of a company’s actions on stakeholders. It’s measured in ESG for community and employee well-being. Tekmon tracks social metrics for reporting.
36. Stakeholder Engagement
Involving groups like employees or communities in ESG decisions. It builds trust and alignment. Tekmon’s platform facilitates engagement with tailored tools.
37. Supply Chain Sustainability
Ensuring ethical and eco-friendly supplier practices. It’s a key ESG focus for responsibility. Tekmon maps supply chain emissions for transparency.
38. Sustainability
Meeting present needs without harming future generations. It’s the foundation of ESG principles. Companies integrate it for long-term success.
39. Integrated Reporting
Combining financial and ESG data in one report. It provides a holistic view of performance. Tekmon’s platform consolidates data for integrated reporting.
40. Sustainable Development Goals (SDGs)
UN goals addressing global challenges. They guide ESG strategies for impact. Companies align initiatives with SDGs for relevance.
41. Task Force on Climate-Related Financial Disclosures (TCFD)
A framework for reporting climate risks. It enhances ESG transparency. Tekmon supports TCFD with pre-built tools.
42. Transparency
Openly sharing ESG data with stakeholders. It builds trust and meets regulatory demands. Tekmon ensures auditable, transparent reporting.
43. Triple Bottom Line
Balancing profit, people, and planet in decisions. It aligns with ESG for holistic success. Companies adopt it for sustainable growth.
44. Value Chain
All activities delivering a product, assessed for ESG impacts. It includes emissions and labor practices. Tekmon consolidates value chain data for reporting.
45. Waste Management
Strategies to reduce, recycle, or dispose of waste responsibly. It’s a key ESG environmental metric. Tekmon tracks waste data for efficiency.
46. Water Stewardship
Managing water use to minimize environmental impact. It’s a growing ESG priority for sustainability. Companies monitor usage to reduce strain.
47. Whistleblower Protection
Safeguarding employees reporting unethical practices. It supports ESG governance standards. Tekmon ensures auditable processes for compliance.
48. Worker Safety
Ensuring safe working conditions for employees. It’s a critical social ESG metric. Tekmon tracks safety data for reporting.
49. Zero Waste
Aiming to eliminate waste through reduction and recycling. It’s an ambitious ESG environmental goal. Companies implement strategies for minimal waste.
50. Carbon Neutrality
Achieving no net carbon emissions through offsets. It’s a key ESG target for sustainability. Tekmon tracks offsets for accurate reporting.
Understanding Key ESG Concepts: FAQs
Below, we answer common questions about ESG terminology to enhance your understanding and highlight how Tekmon’s ESG & Sustainability Software supports your ESG journey.
What Are ESG Strategies?
ESG strategies integrate environmental, social, and governance factors into business plans. They focus on reducing emissions, enhancing diversity, and ensuring ethical governance. Tekmon’s platform supports strategy development with materiality assessments and net-zero tracking.
What Is ESG Software?
ESG software automates the collection, analysis, and reporting of ESG data to streamline compliance and performance tracking. Tekmon’s ESG & Sustainability Software integrates with ERP, BMS, HR, and IoT systems, offering pre-built templates for frameworks like GRI and ESRS. It provides customizable dashboards for real-time KPI monitoring and actionable insights.
What Is an ESG Policy?
An ESG policy outlines a company’s sustainability and ethical commitments. It guides decisions and stakeholder engagement. Tekmon ensures policy compliance with data validation and framework-aligned reporting tools.
What Is an ESG Framework?
An ESG framework provides standardized guidelines for ESG performance reporting, like GRI or TCFD. It ensures consistency and transparency. Tekmon’s platform includes pre-built frameworks and a digital ESRS library.
What Are ESG Metrics?
G metrics are quantifiable indicators, like emissions or diversity ratios, used to track performance and guide goal-setting. They provide data for regulatory reporting and strategic decision-making. Tekmon calculates metrics like Scope 1, 2, and 3 emissions and offers customizable dashboards for real-time insights. Learn more about specific metrics in our blog post, 25 ESG KPI Examples: Key Metrics for Environmental, Social, and Governance Reporting.
What Are ESG Goals?
ESG goals are measurable targets, such as reducing emissions by 50% by 2030. They align with organizational priorities. Tekmon’s BI dashboards track progress and benchmark performance.
Why Choose Tekmon for Your ESG Needs?
Tekmon’s ESG & Sustainability Software is a comprehensive solution designed to simplify and enhance your ESG journey, delivering measurable results with cutting-edge technology. By leveraging advanced automation, seamless integrations, and robust analytics, Tekmon empowers organizations to achieve their ESG objectives efficiently, aligning with the ESG glossary terms outlined above. Here’s why Tekmon stands out as the ideal partner for mastering your ESG glossary and sustainability initiatives:
Automated Data Collection for Efficiency: Tekmon eliminates manual data entry by integrating with systems like ERP, BMS, HR, SCADA, and IoT platforms, ensuring accurate data sourcing for your ESG glossary-related metrics. Features like automated OCR for utility bills and no-code ESG form builders simplify data submission across diverse units. This saves time, reduces errors, and frees up resources for strategic initiatives tied to ESG terminology.
Seamless Regulatory Compliance: Tekmon provides access to pre-built frameworks like GRI, ESRS, SASB, TCFD, and CBAM, ensuring compliance with global standards referenced in this ESG glossary. Its digital ESRS library, with 1,191 data points, supports comprehensive reporting requirements. Automated workflows and templates make regulatory reporting accurate, auditable, and aligned with ESG glossary terms like disclosure and transparency.
Goal Setting and Performance Tracking: Tekmon enables organizations to set clear, measurable ESG goals, such as net-zero targets, and track progress with custom BI dashboards, reflecting ESG glossary concepts like KPIs and net-zero. These dashboards provide real-time insights into performance metrics, allowing for data-driven decisions. Benchmarking tools compare performance internally and against industry peers for continuous improvement.
Enhanced Data Quality and Auditability: With embedded validation rules, automated data quality checks, and approval workflows, Tekmon ensures reliable data for ESG glossary terms like emissions scopes and transparency. Clear visual warnings and full audit trails enhance traceability, building stakeholder trust. This supports compliance with rigorous ESG standards and reinforces the importance of accurate ESG terminology.
Comprehensive Supply Chain Management: Tekmon streamlines Scope 3 emissions tracking, a key ESG glossary term, by equipping suppliers with tools to measure and report emissions accurately. Automated workflows and supplier-specific data capture ensure granular, transparent data collection. This strengthens supply chain sustainability and aligns with ESG priorities like responsible sourcing.
Historical Data Migration: Tekmon’s platform allows seamless uploading and centralization of historical sustainability data, preserving full data history for ESG glossary-related reporting. This digitization ensures continuity and accessibility for long-term ESG analysis. Companies can consolidate past records effortlessly for a unified data model aligned with ESG terminology.
By reducing operational costs, ensuring data reliability, and providing actionable insights, Tekmon transforms ESG management into a strategic advantage, helping you apply this ESG glossary in practice. Its user-friendly interface, personalized workspaces, and automated reminders engage data owners, ensuring timely submissions and improved data flow. Whether you’re a small enterprise or a global corporation, Tekmon’s scalable solutions adapt to your needs, driving sustainable success rooted in the ESG glossary.
Conclusion
Navigating the complexities of ESG terminology is a critical step toward achieving sustainable business success in today’s purpose-driven world. This ESG glossary, combined with Tekmon’s all-in-one ESG & Sustainability Software, empowers organizations to understand ESG terms, implement robust strategies, and meet stakeholder expectations with confidence.
By leveraging Tekmon’s advanced tools for data automation, compliance, and performance tracking, businesses can transform ESG challenges into opportunities for growth, transparency, and positive impact. Visit Tekmon today to explore how our platform can elevate your ESG strategy and position your organization as a leader in sustainability.
