List of Most Important ESG-Related Terms
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April 13, 2023
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List of Most Important ESG-Related Terms

This glossary will help readers better understand and navigate the world of ESG and make informed decisions.

The growing importance of ESG has led to a proliferation of terms and jargon that can be challenging to navigate. In this article, we will provide a glossary of the most important ESG terms, their relevance to ESG, key metrics, and best practices.



Definition: Benchmarking is the process of comparing an organization's performance, processes, or practices with those of top-performing industry peers or best-in-class examples as a means of identifying areas for improvement and setting goals.

Relevance to ESG: In the context of ESG (Environmental, Social, and Governance) investing, benchmarking helps investors and companies assess and measure their ESG performance relative to their peers or industry standards, fostering transparency, accountability, and continuous improvement.

Key Metrics/Indicators:

  1. ESG scores and ratings: Provided by ESG data providers like MSCI, and Refinitiv, these scores evaluate companies based on their ESG performance.
  2. ESG indices: Indices such as the Dow Jones Sustainability Index (DJSI) or the FTSE4Good Index Series track the performance of companies with strong ESG practices.
  3. ESG disclosure rates: Reflecting the extent to which companies share information about their ESG policies, practices, and performance

Best Practices:

  • Regularly assess and monitor ESG performance: Continuously track and evaluate your ESG metrics to identify areas for improvement.
  • Utilize third-party ESG data providers: Leverage the expertise and methodologies of established ESG data providers to ensure accurate and unbiased benchmarking.
  • Engage in industry-specific benchmarking: Compare your company's ESG performance with peers in the same industry to account for sector-specific challenges and opportunities.
  • Set clear, achievable, and measurable ESG goals: Use benchmarking insights to establish ambitious yet realistic targets for ESG improvement.
  • Foster transparency and communication: Clearly communicate your ESG benchmarking results and progress to investors, stakeholders, and employees, fostering trust and accountability.


Carbon Footprint

Definition: A carbon footprint is the total amount of greenhouse gas emissions caused by an individual, organization, or product, usually measured in units of carbon dioxide equivalent (CO2e).

Relevance to ESG: Carbon footprint is a crucial environmental aspect of ESG, as it directly relates to climate change, resource use, and energy efficiency. Companies with lower carbon footprints are generally considered more sustainable and environmentally responsible.

Key Metrics/Indicators:

  1. Direct emissions (Scope 1): Emissions from owned or controlled sources, such as company vehicles and onsite energy generation.
  2. Indirect emissions (Scope 2): Emissions from the generation of purchased energy, such as electricity, heating, and cooling.
  3. Other indirect emissions (Scope 3): Emissions from the entire value chain, including suppliers, customers, and end-of-life disposal.

Best Practices:

  • Measure and report carbon footprint regularly using recognized standards like the Greenhouse Gas Protocol.
  • Set science-based targets and develop a strategy to reduce emissions across all scopes.
  • Invest in renewable energy sources and energy-efficient technologies.
  • Encourage remote work, teleconferencing, and efficient transportation systems to reduce emissions from employee commuting.
  • Engage with suppliers to promote sustainable practices and reduce scope 3 emissions.

Carbon Neutral

Definition: Carbon neutrality refers to achieving net-zero carbon dioxide emissions by balancing emissions with the equivalent amount of carbon removal, either through reduction measures or offsetting.

Relevance to ESG

  • Environmental: Directly addresses climate change by mitigating greenhouse gas emissions.
  • Social: Contributes to a healthier living environment and long-term sustainability.
  • Governance: Demonstrates corporate responsibility and commitment to sustainable operations.

Key Metrics/Indicators

  1. Total greenhouse gas emissions (Scope 1, 2, and 3)
  2. Carbon offset projects implemented
  3. Carbon removal or reduction initiatives
  4. Renewable energy usage

Best Practices

  • Set science-based targets to reduce emissions in line with the Paris Agreement.
  • Measure and report emissions regularly, including Scope 1, 2, and 3.
  • Implement energy efficiency measures and transition to renewable energy sources.
  • Engage in carbon offset projects, such as reforestation and renewable energy projects, to compensate for unavoidable emissions.

Carbon Offsets

Definition: Carbon offsets refer to the reduction or removal of greenhouse gas (GHG) emissions, usually measured in metric tons of carbon dioxide equivalent (CO2e), to compensate for emissions generated elsewhere.

Relevance to ESG: Carbon offsets play a crucial role in addressing climate change by helping companies and individuals to reduce their carbon footprint and contribute to global emissions reduction targets.

Key Metrics/Indicators

  1. Types of carbon offsets: Renewable energy projects, reforestation, carbon capture, and methane reduction
  2. Voluntary vs. compliance market: Voluntary offsets are purchased by organizations and individuals, while compliance offsets are part of regulated carbon markets
  3. Certification standards: Verified Carbon Standard (VCS), Gold Standard, and Clean Development Mechanism (CDM)

Best Practices

  • Prioritize internal emissions reduction: Companies should focus on reducing their GHG emissions and energy consumption before relying on offsets
  • Choose high-quality offsets: Select projects with credible certification standards and a strong monitoring system
  • Transparency: Clearly communicate the offset strategy and its results to stakeholders, including disclosure in sustainability reports and websites
  • Align with the Science-Based Targets Initiative (SBTi): Implement carbon reduction targets in line with the Paris Agreement's goal of limiting global warming to 1.5¬įC above pre-industrial levels
  • Support local projects: Consider investing in carbon offset projects that also provide social and environmental benefits to the communities where the company operates

Carbon Pricing

Definition: Carbon pricing is a way to put a monetary value on the emissions of greenhouse gases, particularly carbon dioxide. It involves putting a price on carbon emissions, either through a tax or a cap-and-trade system.

Relevance to ESG: Carbon pricing is an important tool in mitigating climate change and reducing greenhouse gas emissions. It is a key part of the transition to a low-carbon economy and is becoming increasingly important in ESG investing.

Key Metrics/Indicators: Some key metrics and indicators related to carbon pricing include the price of carbon credits, the number of companies participating in carbon markets, and the amount of emissions reduced through carbon pricing policies.

Best Practices: Some best practices related to carbon pricing include setting a strong and consistent price on carbon, ensuring that the revenue generated from carbon pricing is used to fund climate action and adaptation, and collaborating with other organizations and governments to develop effective carbon pricing policies. Additionally, companies should develop a carbon pricing strategy that incorporates both internal carbon pricing and engagement with external carbon markets. 

Carbon Sequestration

Definition: The process by which carbon dioxide (CO2) is removed from the atmosphere and stored in long-term carbon sinks, such as forests, soils, and oceans.

Relevance to ESG:

  • Carbon sequestration is a key strategy to mitigate climate change and reduce greenhouse gas emissions.
  • It is an important area of focus for ESG investors, who are looking to invest in companies and projects that have a positive impact on the environment.

Key Metrics/Indicators:

  1. The amount of carbon dioxide (CO2) that is sequestered through various methods, such as afforestation, reforestation, and soil management.
  2. The cost of carbon sequestration and the economic viability of different sequestration methods.
  3. The effectiveness of different carbon sequestration methods in reducing greenhouse gas emissions.

Best Practices:

  • Encouraging the adoption of sustainable land use practices, such as agroforestry and conservation tillage.
  • Investing in carbon capture and storage (CCS) technologies, which can capture and store CO2 emissions from industrial processes.
  • Supporting the development of natural carbon sinks, such as forests and wetlands, through conservation and restoration efforts.


Definition: CDP is a global non-profit organization that runs the world's largest environmental disclosure system. It works with investors, companies, and governments to drive environmental performance and disclosure.

Relevance to ESG: CDP helps companies and investors assess and report on their environmental impact and performance, which is a crucial component of ESG.

Key Metrics/Indicators:

CDP collects data on various environmental indicators, including carbon emissions, water usage, and deforestation. Some of the most important CDP metrics include:

  • Scope 1, 2, and 3 greenhouse gas emissions
  • Water security
  • Supply chain engagement

Best Practices:

To effectively engage with CDP and disclose their environmental impact, companies should follow these best practices:

  • Understand CDP's reporting requirements and deadlines
  • Collect and report accurate data
  • Engage with stakeholders and set meaningful targets to improve performance
  • Use CDP data to drive sustainability strategy and decision-making

Recent updates:

  • In 2021, CDP merged with the Climate Disclosure Standards Board (CDSB) and the Task Force on Climate-related Financial Disclosures (TCFD) to form the new organization known as "CDSB-CDP".
  • CDP has launched a new scoring methodology, known as "A List 2.0", to evaluate companies' environmental performance and encourage them to set more ambitious targets.
  • CDP has expanded its scope to include social and governance issues, in addition to environmental factors, under the new "CDP Scores" framework.

Circular economy

Definition: A circular economy is an economic model that aims to eliminate waste and promote the circulation of resources through closed-loop systems. It emphasizes the use of renewable resources and encourages the reuse, refurbishment, and recycling of products, materials and components to minimize waste and pollution.

Relevance to ESG: Circular economy is a critical component of ESG as it addresses several environmental and social issues. It promotes sustainable production and consumption patterns, reduces waste and greenhouse gas emissions, conserves natural resources, and creates new business opportunities and jobs.

Key Metrics/Indicators:

Some of the key metrics and indicators to measure the circularity of an economy include:

  • The percentage of recycled materials in products and packaging
  • The percentage of waste diverted from landfills
  • The percentage of products designed for durability, repair, and reuse
  • The carbon footprint of the production and consumption of goods and services
  • The percentage of renewable energy used in production processes

Best Practices:

Some of the best practices for promoting a circular economy include:

  • Designing products and services with circularity in mind
  • Promoting reuse, repair and refurbishment of products and materials
  • Encouraging recycling and composting of waste
  • Developing innovative business models that promote circularity, e.g. sharing and leasing models
  • Collaborating with suppliers, customers, and stakeholders to create closed-loop systems.

Climate change mitigation

Definition: Climate change mitigation refers to efforts aimed at reducing or preventing greenhouse gas (GHG) emissions to limit global warming and its harmful effects on the environment and society.

Relevance to ESG

Mitigation directly addresses climate change by reducing GHG emissions. Climate change disproportionately impacts vulnerable communities; mitigation benefits society as a whole.

Key Metrics/Indicators

  1. GHG emissions reduction: percentage decrease in emissions compared to a baseline year.
  2. Renewable energy use: percentage of a company's energy consumption from renewable sources.
  3. Energy efficiency improvements: percentage increase in energy productivity (output per unit of energy input).
  4. Carbon intensity: GHG emissions per unit of revenue or production.
  5. Carbon pricing: implementing internal carbon pricing to account for the social cost of emissions.
  6. Science Based Targets initiative (SBTi): setting science-based emissions reduction targets in line with the Paris Agreement.

Best Practices

Climate-related opportunity

Definition: Climate-related opportunities refer to the potential positive outcomes for businesses that arise from the transition to a low-carbon and climate-resilient economy.

Relevance to ESG

  • Environmental: Involves resource efficiency, clean energy and sustainable business practices.
  • Social: Addresses societal needs such as job creation, health, and well-being.
  • Governance: Aligns decision-making with climate goals and stakeholder interests.

Key Metrics/Indicators

  1. Revenue from low-carbon products and services
  2. Investments in clean technology and renewable energy
  3. Adoption of circular economy practices
  4. Greenhouse gas emissions reduction
  5. Climate resilience initiatives

Best Practices

  • Setting science-based targets for emissions reduction (SBTi)
  • Incorporating climate risk assessment in decision-making
  • Investing in renewable energy and energy efficiency
  • Collaborating with stakeholders to develop climate-resilient strategies
  • Disclosing climate-related risks and opportunities to investors (e.g., TCFD framework)

Climate-related risk


A carbon footprint is the total amount of greenhouse gases (GHGs) emitted directly or indirectly by an individual, organization, event, or product, usually measured in metric tons of carbon dioxide equivalent (CO2e).

Relevance to ESG:

Carbon footprint is a critical factor in the 'E' (Environmental) component of ESG, as companies with a lower carbon footprint are considered more environmentally responsible, potentially leading to better long-term performance.

Key Metrics/Indicators:

  • Scope 1 emissions: Direct emissions from owned or controlled sources (e.g., fuel combustion)
  • Scope 2 emissions: Indirect emissions from the generation of purchased electricity, heat, or steam
  • Scope 3 emissions: Other indirect emissions in the value chain (e.g., from suppliers or product use)

Best Practices:

  1. Climate risk assessment: Conduct regular assessments to identify and prioritize climate-related risks and opportunities at both the organizational and asset levels.
  2. Scenario analysis: Perform scenario analyses to evaluate the implications of various climate change scenarios on the organization's strategic planning and decision-making processes.
  3. Integration into decision-making: Integrate climate-related risks and opportunities into the organization's overall risk management framework and strategic planning processes.
  4. Disclosure and transparency: Enhance transparency and disclosure of climate-related risks and opportunities in financial and non-financial reporting, in line with frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD).


Definition: Consolidation refers to merging multiple entities into a single, larger entity.

Relevance to ESG: Consolidation can have a significant impact on ESG factors, including environmental, social, and governance considerations.

Key Metrics/Indicators:

  1. The number of entities being consolidated
  2. The reason for consolidation, such as a merger, acquisition, or other strategic initiatives
  3. The extent to which the consolidation will impact ESG factors, such as emissions, labor practices, or governance structures

Best Practices:

  • Conduct ESG due diligence as part of the consolidation process to identify potential risks and opportunities.
  • Develop a comprehensive ESG integration plan to ensure that ESG considerations are incorporated into the newly consolidated entity's operations and decision-making processes.
  • Engage with stakeholders, including employees, customers, and shareholders, throughout the consolidation process to ensure that their concerns and perspectives are taken into account.
  • Disclose relevant ESG information related to the consolidation in financial and non-financial reporting, in line with frameworks such as the Global Reporting Initiative (GRI) or Sustainability Accounting Standards Board (SASB).

COP: Conference of the Parties 

Definition: The Conference of the Parties (COP) is the decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC). It brings together representatives from 197 countries to negotiate and implement measures to address global climate change.

Relevance to ESG: COP is a critical platform for governments, businesses, and civil society to collaborate on global climate action, which is a crucial component of ESG investing.

Key Metrics/Indicators:

  1. Number of countries represented at COP
  2. Agreements and commitments made at each COP
  3. Emissions reduction targets set by countries at COP

Best Practices:

  • Encourage active participation from governments, businesses, and civil society to ensure progress towards meeting global climate goals.
  • Advocate for ambitious climate targets and policies to be adopted at COP.
  • Monitor progress towards meeting commitments agreed at COP through robust tracking and reporting mechanisms
  • Support initiatives and partnerships that accelerate the transition to a low-carbon economy.

CSR: Corporate Social Responsibility

Definition: Corporate social responsibility (CSR) is a business approach that involves taking responsibility for the impact of a company's activities on the environment, society, and economy. It involves implementing sustainable practices that prioritize the well-being of all stakeholders, including employees, customers, suppliers, and the community.

Relevance to ESG: CSR is an essential aspect of ESG, as it focuses on the social and environmental impact of a company's operations. It involves incorporating sustainable practices into a company's business model and ensuring that it is accountable for its actions.

Key Metrics/Indicators:

  1. Employee turnover rate
  2. Carbon footprint
  3. Community investment
  4. Diversity and inclusion metrics
  5. Supply chain transparency

Best Practices:

  • Developing a comprehensive CSR strategy that aligns with the company's values and goals
  • Engaging with stakeholders and incorporating their feedback into decision-making processes
  • Ensuring transparency and accountability by regularly reporting on CSR initiatives and progress
  • Incorporating CSR into corporate governance structures
  • Prioritizing long-term sustainability over short-term profits.¬†


  • Global Reporting Initiative (GRI) Standards
  • UN Sustainable Development Goals (SDGs)
  • ISO 26000 guidance on social responsibility.




Decarbonization is the process of reducing or eliminating carbon dioxide emissions from various sectors of the economy, including energy, transportation, and industry. It involves transitioning to low-carbon or carbon-free alternatives to fossil fuels.

Relevance to ESG:

Decarbonization is critical to achieving the goals of ESG, as it involves reducing the environmental impact of human activities. It is a key component of mitigating climate change and promoting sustainable development.

Key Metrics/Indicators:

  • Carbon emissions reduction targets
  • Renewable energy capacity
  • Energy efficiency measures
  • Clean technology adoption rates
  • Carbon pricing mechanisms

Best Practices:

  1. Setting ambitious decarbonization targets aligned with the Paris Agreement goals
  2. Investing in renewable energy and energy efficiency measures
  3. Transitioning to low-carbon transportation options
  4. Implementing carbon pricing mechanisms to incentivize emissions reductions
  5. Collaborating with stakeholders to drive systemic change towards decarbonization.



EPA: Environmental Protection Agency


The Environmental Protection Agency (EPA) is a federal agency in the United States responsible for protecting human health and the environment by setting and enforcing regulations related to air and water quality, hazardous waste, and other environmental issues.

Relevance to ESG:

The EPA plays a crucial role in promoting environmental sustainability and protecting natural resources. It is a key regulatory body that sets standards and guidelines for companies to follow in order to minimize their environmental impact.

Key Metrics/Indicators:

  1. Air quality index
  2. Water quality index
  3. Hazardous waste management
  4. Emissions reduction targets

Best Practices:

  • Complying with EPA regulations and guidelines
  • Implementing sustainable practices to reduce environmental impact
  • Regularly monitoring and reporting on environmental performance
  • Collaborating with the EPA and other stakeholders to address environmental issues
  • Prioritizing transparency and accountability in all environmental practices.


Environmental Protection Agency (EPA) website

Sustainability Accounting Standards Board (SASB) standards for environmental management

Carbon Disclosure Project (CDP) environmental reporting framework.

Environmental, Social, and Governance (ESG)


ESG refers to the three main factors that investors and stakeholders consider when evaluating the sustainability and ethical impact of a company's operations. Environmental factors include a company's impact on the planet, such as carbon emissions and resource usage. Social factors refer to a company's impact on society, such as labor practices and community relations. Governance relates to a company's management and decision-making processes.

Relevance to ESG:

ESG has become increasingly important in the investment community, as investors seek to align their investments with their values and long-term sustainability goals. Companies that prioritize ESG are more likely to attract investment and maintain a positive reputation among stakeholders.

Key Metrics/Indicators:

  • Carbon emissions
  • Water usage
  • Waste generated
  • Employee turnover rate
  • Diversity and inclusion metrics
  • Board and executive diversity
  • Executive compensation
  • Supply chain transparency
  • Corruption and bribery incidents

Best Practices:

  • Developing a comprehensive ESG strategy that aligns with the company's values and goals
  • Conducting regular ESG assessments and reporting on progress
  • Engaging with stakeholders to understand their perspectives and incorporate feedback into decision-making processes
  • Prioritizing transparency and accountability by disclosing relevant ESG information to stakeholders
  • Aligning executive compensation with ESG performance.

ESG Analysis


ESG analysis refers to the process of evaluating a company's environmental, social, and governance practices to determine its sustainability and ethical impact.

Relevance to ESG:

ESG analysis is a critical component of ESG investing, as it helps investors identify companies that prioritize sustainable and ethical practices. It also encourages companies to improve their ESG performance by holding them accountable for their actions.

Key Metrics/Indicators:

  1. Carbon emissions
  2. Water usage
  3. Waste generated
  4. Employee turnover rate
  5. Diversity and inclusion metrics
  6. Board and executive diversity
  7. Executive compensation
  8. Supply chain transparency
  9. Corruption and bribery incidents


  1. MSCI ESG Research
  2. 15Rock
  3. CDP (formerly Carbon Disclosure Project)
  4. Global Reporting Initiative (GRI)

Best Practices:

  • Conducting a comprehensive ESG analysis that considers all relevant factors
  • Using credible and up-to-date data and metrics to inform the analysis
  • Engaging with stakeholders to understand their perspectives on the company's ESG performance
  • Regularly reporting on ESG analysis results and progress towards ESG goals.

ESG fund


An ESG fund is a mutual fund or exchange-traded fund (ETF) that invests in companies that meet certain environmental, social, and governance (ESG) criteria. These funds aim to generate long-term financial returns while also promoting sustainable and responsible business practices.

Relevance to ESG:

ESG funds are an important tool for investors who want to align their investments with their values and promote sustainable business practices. By investing in companies that prioritize ESG considerations, investors can drive positive change and contribute to a more sustainable future.

Key Metrics/Indicators:

  • Carbon footprint
  • Diversity and inclusion metrics
  • Employee turnover rate
  • Board diversity
  • Corporate governance metrics

Best Practices:

  1. Conducting thorough research and due diligence to identify ESG leaders and laggards
  2. Considering a range of ESG factors when evaluating investment opportunities
  3. Diversifying investments across sectors and geographies to manage risk
  4. Engaging with portfolio companies to encourage ESG improvements and hold them accountable for their actions.


ESG Integration


ESG integration refers to the process of incorporating environmental, social, and governance factors into investment decision-making. It involves analyzing non-financial risks and opportunities alongside traditional financial analysis.

Relevance to ESG: 

ESG integration is a critical component of ESG investing, as it helps investors make informed decisions that align with their values and reduce their exposure to potential risks. It is also essential for ensuring long-term sustainability and financial performance.

Key Metrics/Indicators: 

  1. ESG ratings and rankings (e.g., MSCI ESG Ratings)
  2. Carbon footprint
  3. Diversity and inclusion metrics
  4. Supply chain transparency
  5. Board diversity

Best Practices: 

  • Conducting comprehensive ESG research and analysis before making investment decisions
  • Incorporating ESG factors into investment policies and guidelines
  • Engaging with companies to encourage ESG best practices and transparency
  • Regularly monitoring and reporting on ESG performance and progress.¬†


  • Principles for Responsible Investment (PRI)
  • Sustainability Accounting Standards Board (SASB)
  • Task Force on Climate-related Financial Disclosures (TCFD)

ESG rating


ESG rating is a measure of a company's performance on environmental, social, and governance factors. It evaluates a company's overall sustainability and social impact.

Relevance to ESG:

ESG rating is an essential aspect of ESG investing, as it helps investors identify companies that prioritize sustainability and social responsibility. It also encourages companies to improve their ESG performance.

Key Metrics/Indicators:

  • Carbon footprint
  • Water usage
  • Employee turnover rate
  • Board diversity
  • Executive compensation

Organizations and Frameworks:

  1. MSCI ESG Fundamentals
  2. Sustainalytics ESG Risk Ratings
  3. SASB Materiality Map

Best Practices:

  • Incorporating ESG ratings into investment decisions
  • Encouraging companies to improve their ESG performance through engagement and active ownership
  • Promoting transparency and disclosure of ESG information
  • Evaluating ESG ratings alongside financial performance metrics to gain a holistic view of company's performance.

ESG Engagement


ESG engagement refers to the process of actively seeking out and communicating with companies on their ESG practices, encouraging them to improve their sustainability performance.

Relevance to ESG: 

ESG engagement is a key strategy used by investors to drive positive change and encourage companies to improve their ESG practices. It helps investors to identify risks and opportunities and to hold companies accountable for their ESG performance.

Key Metrics/Indicators: 

  1. Number of engagement activities
  2. Progress made by companies in response to engagement efforts
  3. Alignment of company practices with internationally recognized ESG standards and frameworks
  4. Investor satisfaction with engagement outcomes

Best Practices:

  • Prioritizing engagement with companies where the potential for positive impact is greatest
  • Developing clear and measurable objectives for engagement activities
  • Collaborating with other investors and stakeholders to maximize impact
  • Regularly reviewing and updating engagement strategies and tactics to ensure effectiveness.¬†


Financed Emissions


Financed emissions refer to the greenhouse gas (GHG) emissions associated with the investments made by a financial institution or investor.

Relevance to ESG: 

Financed emissions are an important aspect of ESG as they highlight the impact of financial activities on the environment. It is critical to measure and mitigate financed emissions to ensure that investments align with ESG goals and do not harm the planet.

Key Metrics/Indicators:

  1. Carbon footprint of investment portfolio
  2. Scope 1, 2, and 3 emissions of investee companies
  3. Proportion of investments in high-emitting sectors
  4. Carbon intensity of investments
  5. Alignment with the goals of the Paris Agreement

Best Practices:

  • Measuring and disclosing financed emissions to investors and other stakeholders
  • Setting targets to reduce financed emissions and align with the Paris Agreement
  • Engaging with investee companies to encourage them to reduce emissions
  • Investing in low-carbon technologies and sectors to reduce the carbon footprint of the investment portfolio.¬†


  • Task Force on Climate-related Financial Disclosures (TCFD)¬†
  • Science-Based Targets initiative (SBTi)
  • Carbon Disclosure Project (CDP)

Fossil Fuel 

Definition: Fossil fuels are non-renewable energy sources formed over millions of years from the remains of dead plants and animals, such as coal, oil, and natural gas.

Relevance to ESG: Fossil fuels are a significant contributor to climate change, and their extraction and use are associated with environmental and social risks such as air and water pollution, habitat destruction, and human rights violations.

Key Metrics/Indicators: Carbon Tracker, Global Energy Monitor, and the International Energy Agency provide data and analysis on fossil fuel reserves, production, and consumption trends. Carbon emissions and carbon intensity are key metrics to track for fossil fuel companies.

Best Practices:

  • Divestment from fossil fuels and investment in clean energy alternatives.
  • Reduction of carbon emissions and implementation of carbon capture technology.
  • Disclosure of environmental and social risks associated with fossil fuel operations.
  • Collaboration with stakeholders to transition to a low-carbon economy.

Fugitive Emissions 

Definition: Fugitive emissions are the unintentional release of gases or vapors from pressurized equipment, such as valves, pumps, and connectors.

Relevance to ESG: Fugitive Emissions are an important aspect of ESG as they contribute to air pollution and climate change. They are also a regulatory concern as they can pose health and safety risks to workers and the surrounding community.

Key Metrics/Indicators: The EPA's Greenhouse Gas Reporting Program provides detailed information on fugitive emissions reporting requirements and methodologies. The Oil and Gas Methane Partnership (OGMP) is a multistakeholder initiative that provides a framework for companies to measure, report, and reduce methane emissions.

Best Practices:

  1. Conduct regular leak detection and repair (LDAR) surveys to identify and repair fugitive emissions sources.
  2. Implement preventative maintenance programs to reduce the likelihood of fugitive emissions occurring.
  3. Utilize advanced technologies, such as optical gas imaging cameras, to enhance fugitive emissions detection capabilities.
  4. Participate in industry initiatives, such as the OGMP, to collaborate with peers and stakeholders on reducing fugitive emissions.

Geothermal Energy

Definition: Geothermal energy is a renewable energy source that harnesses the Earth's natural heat to generate electricity or heat buildings.

Relevance to ESG: Geothermal energy is a sustainable and eco-friendly energy source that helps reduce carbon emissions and mitigate climate change. It aligns with the "E" (environmental) component of ESG.

Key Metrics/Indicators: The International Geothermal Association (IGA) and the US Department of Energy provide credible industry metrics and data on geothermal energy production and capacity.

Best Practices: 

  1. Prioritize locating geothermal plants in areas with high geothermal potential and low environmental impact.
  2. Integrate geothermal energy with other renewable energy sources for a more diversified energy mix.
  3. Monitor and minimize the environmental impacts of geothermal operations.
  4. Invest in research and development to improve the efficiency and cost-effectiveness of geothermal energy production.

GHG inventory

Definition: A GHG inventory is a report of an organization's greenhouse gas emissions over a period of time, typically a year.

Relevance to ESG: GHG inventory is a crucial ESG metric to measure an organization's carbon footprint and its impact on the environment.

Key Metrics/Indicators: Intergovernmental Panel on Climate Change (IPCC), Greenhouse Gas Protocol, and the Carbon Trust Standard are the most widely used frameworks to measure GHG emissions.

Best Practices:

  • Include emissions from all sources, including direct and indirect emissions.
  • Use internationally recognized measurement and reporting standards.
  • Set reduction targets to reduce emissions.
  • Regularly update the inventory to track progress towards reduction targets.

GHG Sink

Definition: A GHG sink is any process, activity or mechanism that removes greenhouse gases (GHGs) from the atmosphere, thereby reducing their concentration in the air.

Relevance to ESG: GHG sinks are important for mitigating climate change, as they help to balance out the emissions that are released into the atmosphere. They are a key component of the ESG framework, as they contribute to the "environmental" pillar.

Key Metrics/Indicators: The Intergovernmental Panel on Climate Change (IPCC) provides a list of land-use-based GHG sinks, which includes afforestation, reforestation, and soil carbon sequestration. The Global Carbon Project is another source for tracking GHG emissions and sinks.

Best Practices:

  1. Encourage the protection and restoration of natural habitats and ecosystems that act as GHG sinks.
  2. Promote sustainable land use practices that enhance the carbon sequestration potential of soil.
  3. Support the development and implementation of carbon offset projects that focus on GHG sinks.
  4. Encourage companies to measure and report on their GHG sinks and emissions as part of their ESG reporting.

GHG Source

Definition: GHG Source refers to the origin of greenhouse gas (GHG) emissions from a particular source, such as a company or industry.

Relevance to ESG: GHG Source is a crucial ESG metric that helps assess the environmental impact of companies and industries.

Key Metrics/Indicators: GHG emissions, carbon footprint, Scope 1, 2 and 3 emissions, Global Reporting Initiative (GRI) standards, Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Best Practices:

  • Conduct a comprehensive GHG emissions inventory to identify major emission sources.
  • Set ambitious reduction targets and develop a roadmap to achieve them.
  • Implement energy-efficient and low-carbon technologies to reduce emissions.
  • Report GHG emissions and reduction efforts transparently using recognized frameworks like GRI and TCFD.

Global Warming

Definition: Global warming refers to the long-term increase in Earth's average surface temperature, primarily caused by human activities such as burning fossil fuels and deforestation.

‚ÄćRelevance to ESG: Global warming is a key focus area for ESG professionals as it has significant impacts on the environment, society and the economy, and poses a major risk to businesses and investors.

Key Metrics/Indicators: Carbon dioxide levels, average global temperature, sea level rise, extreme weather events, and greenhouse gas emissions. Key organizations and reports include the Intergovernmental Panel on Climate Change (IPCC), Carbon Disclosure Project (CDP), and Task Force on Climate-related Financial Disclosures (TCFD).

Best Practices:

  1. Set science-based targets to reduce greenhouse gas emissions.
  2. Implement renewable energy sources and energy efficiency measures.
  3. Disclose climate-related risks and opportunities in financial reporting.
  4. Engage with stakeholders, including suppliers and customers, to reduce emissions throughout the value chain.

Green investing

Definition:  Green investing refers to the practice of investing in companies, funds or projects that promote sustainability and environmental responsibility.

Relevance to ESG: Green investing is a key area of focus within ESG investing, as it aligns with the environmental pillar of ESG.

Key Metrics/Indicators:

  1. Green bond issuance data from organizations such as the Climate Bonds Initiative
  2. Environmental ratings from organizations such as MSCI
  3. Climate-related financial disclosures in accordance with the TCFD framework

Best Practices:

  • Conduct thorough research on the environmental impact of potential investments
  • Consider investing in green bonds or funds with a clear sustainability focus
  • Monitor and engage with investee companies to ensure they are meeting environmental targets
  • Align green investing strategy with broader ESG goals and principles

Greenhouse gases

Definition: Greenhouse gases refer to gases that trap heat in the Earth's atmosphere, causing the planet to warm up. 

Relevance to ESG: Greenhouse gases are one of the most critical environmental issues that ESG investors and organizations consider when evaluating a company's sustainability performance. 

Key Metrics/Indicators: 

  1. Carbon dioxide (CO2) emissions
  2. Methane (CH4) emissions
  3. Nitrous oxide (N2O) emissions
  4. Fluorinated gases (HFCs, PFCs, SF6)

Best Practices: 

  • Measure and report greenhouse gas emissions¬†
  • Set science-based targets to reduce emissions¬†
  • Implement strategies to reduce emissions, such as energy efficiency and renewable energy¬†
  • Engage suppliers and partners to reduce emissions throughout the value chain.¬†¬†¬†¬†


Definition: The practice of making exaggerated or false claims about the environmental benefits of a product or service, often to appeal to environmentally conscious consumers.

Relevance to ESG: Greenwashing undermines the credibility of ESG efforts and misleads investors, consumers, and stakeholders.

‚ÄćKey Metrics/Indicators: Greenwashing Index by Greenpeace, Ecolabel Index by the European Union, US Federal Trade Commission's Green Guides.

Best Practices:

  1. Avoid making exaggerated or false environmental claims.
  2. Use credible third-party certifications and labels.
  3. Provide transparency in reporting and disclosure.
  4. Ensure ESG efforts are integrated into corporate strategy and culture.

Integrated reporting

Definition: An approach to corporate reporting that combines financial and non-financial information to provide a comprehensive picture of a company's performance.

Relevance to ESG: Integrated reporting helps companies to communicate their ESG performance to stakeholders in a more comprehensive and transparent manner.

‚ÄćKey Metrics/Indicators: The International Integrated Reporting Council (IIRC) has developed a framework for integrated reporting that includes six capitals - financial, manufactured, intellectual, human, social and relationship, and natural. Other important metrics include sustainability reporting standards such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).

Best Practices:

  1. Identify and prioritize ESG issues that are material to your business and stakeholders.
  2. Use a standardized reporting framework to ensure consistency and comparability of data.
  3. Engage with stakeholders to understand their information needs and preferences.
  4. Integrate ESG information into financial reporting to provide a more complete picture of the company's value creation.

Impact investing

Definition: Impact investing is an investment approach that aims to generate measurable social and environmental impact alongside a financial return. 

Relevance to ESG: Impact investing is closely related to ESG as it considers the social and environmental impact of an investment, in addition to financial returns. 

Key Metrics/Indicators: The Global Impact Investing Network (GIIN) publishes an Annual Impact Investor Survey that provides data and insights on the impact investing industry. Other key metrics include the United Nations Sustainable Development Goals (SDGs) and Environmental, Social and Governance (ESG) ratings. 

Best Practices: 

  1. Identify impact goals and metrics before making investment decisions.
  2. Conduct thorough due diligence on potential investments to ensure alignment with impact goals. 
  3. Regularly monitor and report on the social and environmental impact of investments. 
  4. Collaborate with other impact investors and stakeholders to maximize impact.

ISO 14064

Definition: ISO 14064 is a set of international standards for quantifying, monitoring, and reporting greenhouse gas emissions and removals.

Relevance to ESG: ISO 14064 is highly relevant to ESG as it helps organizations measure and manage their carbon footprint and report on their emissions in a transparent and credible way.

Key Metrics/Indicators: The GHG Protocol, CDP, and SASB are some important frameworks that provide guidance on implementing ISO 14064. The key metrics include Scope 1, Scope 2, and Scope 3 emissions, carbon intensity, and carbon offsetting.

Best Practices: 

  • Establish a clear and comprehensive GHG accounting policy¬†
  • Conduct regular audits to ensure data accuracy and completeness¬†
  • Set reduction targets and implement strategies to achieve them¬†
  • Disclose emissions data and reduction progress in sustainability reports.

Kyoto Protocol

Definition: An international treaty that aims to reduce greenhouse gas emissions and combat climate change.

Relevance to ESG: The Kyoto Protocol is one of the most important international agreements related to environmental sustainability and climate change.

‚ÄćKey Metrics/Indicators: The Intergovernmental Panel on Climate Change (IPCC) provides regular reports on the state of global warming and climate change, while the United Nations Framework Convention on Climate Change (UNFCCC) tracks progress towards meeting the targets set out in the Kyoto Protocol.

Best Practices:

  • Encourage governments to ratify and implement the Kyoto Protocol.
  • Promote the use of renewable energy sources to reduce greenhouse gas emissions.
  • Support projects that help reduce emissions in developing countries.
  • Collaborate with other stakeholders to address climate change at a global scale.

Nature Risk

Definition: Nature risk refers to the potential financial losses and negative impacts on businesses due to the depletion of natural resources, biodiversity loss, and environmental degradation.

Relevance to ESG: Nature risk is a crucial component of ESG as it assesses the environmental impact of businesses and their operations.

‚ÄćKey Metrics/Indicators: The Task Force on Nature-related Financial Disclosures (TNFD) provides a framework for companies to assess and report their nature-related risks and opportunities. Other key metrics include water usage, carbon footprint, land use, and waste generation.

Best Practices:

  • Conduct a comprehensive assessment of the nature risks associated with business operations.
  • Develop strategies to mitigate and manage nature risks.
  • Report on nature-related risks and opportunities in financial reporting.
  • Collaborate with stakeholders to address nature risks and support conservation efforts.


Definition: Net-Zero refers to the state of balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere.

Relevance to ESG: Net-Zero is a key goal for companies and countries in achieving their environmental sustainability objectives under ESG.

Key Metrics/Indicators: Science-Based Targets Initiative, United Nations Framework Convention on Climate Change, Intergovernmental Panel on Climate Change.

Best Practices: 

  • Set a clear target for achieving net-zero emissions
  • Invest in renewable energy and energy efficiency measures
  • Implement a carbon pricing mechanism
  • Regularly monitor and report on progress towards net-zero emissions.

Net-Zero Target

Definition: A net-zero target is a goal set by an organization to reduce its greenhouse gas emissions to a level where any remaining emissions are balanced out by removing an equivalent amount of emissions from the atmosphere.

Relevance to ESG: Net-zero targets are crucial for achieving environmental sustainability and mitigating climate change.

‚ÄćKey Metrics/Indicators: Science-Based Targets initiative, Greenhouse Gas Protocol, CDP, and the Task Force on Climate-related Financial Disclosures (TCFD) are important frameworks and organizations for setting and measuring net-zero targets.

Best Practices: 

  1. Set a clear and ambitious net-zero target that aligns with the Paris Agreement's goal of limiting global warming to 1.5¬įC.
  2. Develop a comprehensive plan outlining the steps needed to achieve the target.
  3. Engage with stakeholders, including investors and employees, to foster buy-in and support for the target.
  4. Disclose progress towards the target regularly and transparently, using credible metrics and data.

Physical Risk

Definition: Physical risk refers to the physical impacts of climate change, such as extreme weather events, rising sea levels, and natural disasters, that can damage assets, disrupt operations, and harm people.

Relevance to ESG: Physical risks are a key concern for companies and investors who are increasingly aware of the potential financial impacts of climate change on their businesses and portfolios.

Key Metrics/Indicators: Organizations such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Global Reporting Initiative (GRI) provide guidelines for companies to report on their exposure to physical risks. Key metrics include the number and severity of climate-related events, the cost of damages, and the level of insurance coverage.

Best Practices:

  • Conduct a risk assessment to understand exposure to physical risks
  • Develop a climate adaptation strategy to mitigate risks and build resilience
  • Monitor and report on physical risks in line with industry frameworks and standards
  • Engage with stakeholders, including local communities and regulators, to understand and address physical risks.

Renewable energy

Definition: Energy obtained from renewable resources, such as sunlight, wind, rain, tides, and geothermal heat, which are replenished naturally and can be used repeatedly.

Relevance to ESG: Renewable energy is a crucial component of ESG investing as it helps reduce carbon emissions, which is necessary to address climate change.

Key Metrics/Indicators: Installed capacity, generation by source, investment flows, and levelized cost of energy. The International Energy Agency (IEA) and the Renewable Energy Policy Network for the 21st Century (REN21) are credible sources of data on renewable energy.

Best Practices:

  • Investing in renewable energy sources to reduce carbon emissions.
  • Encouraging the adoption of renewable energy policies and regulations.
  • Promoting innovation and technological advancements in the renewable energy sector.
  • Supporting energy efficiency measures to reduce overall energy consumption.

Renewable Energy Certificates (RECs)

Definition: Renewable Energy Certificates (RECs) are tradable, non-tangible energy commodities that represent proof that 1 megawatt-hour (MWh) of electricity was generated from a renewable energy source.

Relevance to ESG: RECs are a key instrument used to incentivize investment in renewable energy sources, thereby reducing the carbon footprint of energy generation.

Key Metrics/Indicators: The International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA) are credible sources for data on renewable energy generation and usage. The Global Reporting Initiative (GRI) Sustainability Reporting Standards also provide guidance on reporting the use of RECs.

Best Practices:

  • Organizations should prioritize the purchase of RECs from new, additional, and verifiable renewable energy projects.
  • Companies should report the use of RECs transparently in their sustainability reports, using recognized frameworks such as GRI Standards.
  • It is important for organizations to understand the regulatory landscape governing RECs in different jurisdictions.
  • Companies should set ambitious renewable energy targets and actively work towards achieving them through the use of RECs.

Responsible investment

Definition: Responsible investment refers to the practice of investing in companies and assets that demonstrate a commitment to sustainable, ethical, and socially responsible business practices.

Relevance to ESG: Responsible investment is a key component of ESG investing, as it focuses on environmental, social, and governance factors to identify companies that are aligned with sustainable and ethical values.

Key Metrics/Indicators: Key metrics for responsible investment include ESG ratings and scores from leading providers such as MSCI, and ISS ESG. Other important indicators include the UN Sustainable Development Goals (SDGs) and the Principles for Responsible Investment (PRI).

Best Practices:

  1. Conduct thorough ESG due diligence and analysis before making investment decisions.
  2. Engage with companies to encourage sustainable and responsible practices.
  3. Monitor and report on ESG performance of portfolio companies.
  4. Align investment strategies with the UN SDGs and PRI.

Science-Based Target

Definition: A science-based target is a greenhouse gas reduction goal set by a company that aligns with the latest climate science and the Paris Agreement's goal of limiting global warming to 1.5¬įC above pre-industrial levels.¬†

Relevance to ESG: Science-based targets are an important way for companies to demonstrate their commitment to addressing climate change and reducing their carbon footprint.

Key Metrics/Indicators: The Science-Based Targets initiative, established by CDP, UN Global Compact, WRI, and WWF, provides guidance and a framework for companies to set science-based targets. The initiative also maintains a database of companies with approved science-based targets.

Best Practices:

  • Set ambitious yet achievable targets that align with the latest climate science
  • Ensure targets cover all relevant emissions sources, including Scope 1, 2, and 3 emissions
  • Use a robust methodology to calculate targets, such as the Sectoral Decarbonization Approach (SDA) or the Greenhouse Gas Protocol
  • Report progress transparently and regularly to stakeholders.

SDG: Sustainable Development Goals


The Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. There are 17 SDGs in total.

Relevance to ESG: 

The SDGs are closely linked to ESG as they provide a framework for sustainable development that includes economic, social, and environmental factors. Many companies and investors use the SDGs as a guide for setting ESG goals and measuring progress towards sustainability.

Key Metrics/Indicators: 

Some key metrics for measuring progress towards the SDGs include the SDG Index and Dashboards, which provide country-level assessments of SDG progress, and the Global Reporting Initiative (GRI) Standards, which provide a framework for reporting on ESG issues.

Best Practices: 

  1. Align ESG goals with the relevant SDGs.
  2. Use SDG metrics and frameworks to measure progress towards sustainability.
  3. Engage stakeholders to ensure that ESG goals are aligned with community needs.
  4. Report on progress towards the SDGs using recognized standards such as the GRI Standards.

Scope 1, Scope 2, Scope 3 emissions

Definition: Scope 1, Scope 2, and Scope 3 emissions refer to the different types of greenhouse gas emissions produced by an entity. 

Relevance to ESG: These emissions are crucial for measuring a company's environmental impact and its commitment to sustainability. 

Key Metrics/Indicators: Key metrics for measuring emissions include carbon footprint, greenhouse gas emissions, and energy consumption. Organizations like the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) provide frameworks for measuring and reporting emissions. 

Best Practices: 

  • Identify and measure all three scopes of emissions¬†
  • Develop a reduction strategy for each scope¬†
  • Set targets for reducing emissions in each scope¬†
  • Report emissions data transparently and regularly.

Socially Responsible Investing (SRI)

Definition: Socially responsible investing (SRI) is an investment strategy that considers both financial returns and social/environmental impact of the investment. 

Relevance to ESG: SRI is an important aspect of ESG as it involves investment decisions that align with environmental, social, and governance values. 

Key Metrics/Indicators: Some credible and updated industry metrics and data for SRI investments are the Dow Jones Sustainability Index, MSCI ESG Leaders Index, and FTSE4Good Index Series. 

Best Practices:

  • Identify companies that align with your values and mission.
  • Conduct thorough research on the company's ESG performance.
  • Consider the long-term impact of the investment.
  • Monitor and engage with the companies in your portfolio to encourage positive change.

Sustainable Finance

Definition: Sustainable finance refers to financial activities that integrate environmental, social, and governance (ESG) criteria into investment decisions and foster sustainable economic growth.

Relevance to ESG: Sustainable finance is a key aspect of ESG investing, as it aims to align financial goals with social and environmental objectives.

Key Metrics/Indicators: Global Sustainable Investment Alliance (GSIA) reports, United Nations Principles for Responsible Investment (UN PRI), ESG ratings by MSCI, Sustainalytics, and Refinitiv.

Best Practices:

  • Identify and assess ESG risks and opportunities in investment decisions
  • Develop sustainability-focused investment strategies
  • Engage with companies to promote sustainability practices
  • Report on ESG performance and impact.

Sustainability Reporting

Definition: Sustainability reporting is the practice of publicly disclosing a company's environmental, social, and governance (ESG) performance. This includes reporting on a wide range of issues, such as greenhouse gas emissions, human rights, diversity and inclusion, and ethical business practices.

Relevance to ESG: Sustainability reporting is an important part of ESG investing, as it allows investors to assess a company's sustainability performance and the potential risks and opportunities associated with that performance. It is also becoming increasingly important as investors and stakeholders demand greater transparency and accountability from companies.

Key Metrics/Indicators: Some key metrics and indicators related to sustainability reporting include the number of companies reporting on ESG issues, the quality and comprehensiveness of sustainability reports, and the level of stakeholder engagement in the reporting process.

Best Practices: Some best practices related to sustainability reporting include using recognized reporting frameworks, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards

The Paris Agreement

Definition: The Paris Agreement is a legally binding international treaty on climate change adopted by 196 countries in 2015, with the goal of limiting global warming to below 2¬įC above pre-industrial levels.

Relevance to ESG: The Paris Agreement is a cornerstone of ESG as it aims to combat climate change, reduce greenhouse gas emissions, and promote sustainable development.

Key Metrics/Indicators: Nationally Determined Contributions (NDCs) submitted by countries, Global Carbon Project, and Intergovernmental Panel on Climate Change (IPCC) reports.

Best Practices:

  • Companies should align their sustainability strategies with the goals of the Paris Agreement.
  • Investors should evaluate the climate risks and opportunities of their investments in line with the Paris Agreement.
  • Governments should implement policies and regulations to meet their NDC targets.
  • Civil society should advocate for the implementation of the Paris Agreement and hold governments and companies accountable for their commitments.

Transition Risk

Definition: The risk associated with transitioning to a low-carbon economy, including the financial impact of changes in policy, technology, and consumer preferences.

Relevance to ESG: Transition risk is a critical component of ESG investing as it assesses the financial implications of transitioning to a low-carbon economy.

Key Metrics/Indicators: Carbon pricing, renewable energy capacity, fossil fuel reserves, and emissions data from organizations like the Task Force on Climate-related Financial Disclosures (TCFD) and the Global Reporting Initiative (GRI).

Best Practices:

  • Assess and measure transition risk for investments and portfolios.
  • Engage with companies to encourage disclosure of transition risks and strategies.
  • Consider divestment from companies with high transition risks.
  • Incorporate transition risk into scenario analysis for stress testing.

Value Chain Emissions

Definition: The total amount of greenhouse gases emitted throughout the entire lifecycle of a product, from raw material extraction to disposal. 

Relevance to ESG: Value chain emissions are a significant contributor to a company's overall carbon footprint and are crucial to assess when measuring a company's environmental impact. 

Key Metrics/Indicators: GHG Protocol Corporate Value Chain (Scope 3) Standard, carbon footprint assessments, supply chain emissions tracking. 

Best Practices: 

  • Identify key emission sources in the value chain and set reduction targets.¬†
  • Engage suppliers and partners to reduce emissions collectively.¬†
  • Integrate value chain emissions into overall carbon management strategy.¬†
  • Regularly report on value chain emissions to stakeholders.


Definition: Verification is the process of confirming the accuracy and validity of the ESG data and reports provided by companies.

Relevance to ESG: Verification is crucial in ensuring that the ESG information provided is reliable and trustworthy.

Key Metrics/Indicators: Some of the key organizations providing verification services include DNV GL, Sustainalytics, and Bureau Veritas.

Best Practices:

  • Choose a verification provider that is credible and has a track record of providing reliable services.
  • Ensure that the verification process covers all relevant ESG metrics and indicators.
  • Regularly review and update your ESG reports to ensure they are up-to-date and accurate.
  • Be transparent about your verification process and results to build trust and credibility with stakeholders.