ESG & Sustainability Glossary
Clear, authoritative definitions of 50+ ESG and sustainability terms – from CSRD and double materiality to net zero and scope 3 emissions.
The Citable ESG Orgs. glossary provides concise, expert definitions of the most important terms in environmental, social, and governance (ESG) practice. Whether you are navigating CSRD compliance requirements, understanding the difference between carbon neutrality and net zero, or learning about emerging frameworks like TNFD and ISSB – this glossary is your reference. Each term includes context on why it matters, related concepts, and links to relevant organisations in our directory.
C
Carbon Credit
A carbon credit is a tradeable certificate representing the right to emit one metric tonne of carbon dioxide or its equivalent in other greenhouse gases. Credits are generated through verified emission reduction or removal projects and can be traded on voluntary or compliance carbon markets. They serve as a market-based mechanism for incentivising emissions reduction.
Carbon Offset
A carbon offset is a reduction or removal of greenhouse gas emissions made to compensate for emissions occurring elsewhere. Offsets are typically measured in metric tonnes of CO2 equivalent and can be generated through projects such as reforestation, renewable energy, or methane capture. They are purchased as credits on voluntary or compliance carbon markets.
Climate Risk
Climate risk refers to the potential negative impacts of climate change on organisations, economies, and ecosystems. It is typically divided into physical risks (extreme weather, sea-level rise) and transition risks (policy changes, technology shifts, market repricing). Understanding climate risk is essential for long-term strategic planning and investment decisions.
E
ESG Integration
ESG integration is the systematic inclusion of environmental, social, and governance factors into investment analysis and decision-making processes. Unlike negative screening or exclusion, ESG integration uses ESG data alongside traditional financial analysis to build a more complete picture of risk and opportunity. It is the most widely practised responsible investment approach globally.
ESG Rating
An ESG rating is an assessment of a company's exposure to and management of environmental, social, and governance risks and opportunities. Provided by agencies such as MSCI, Sustainalytics, and S&P Global, ESG ratings aggregate data from corporate disclosures, news sources, and stakeholder reports. Ratings are used by investors to screen, compare, and evaluate companies on sustainability performance.
EU Taxonomy
The EU Taxonomy is a classification system establishing a list of environmentally sustainable economic activities based on science-based technical screening criteria. It provides a common language for investors, companies, and policymakers to determine which activities can be considered genuinely sustainable. Activities must substantially contribute to at least one of six environmental objectives without significantly harming the others.
Frequently asked questions
How are glossary terms selected?
Terms are selected based on relevance to ESG professionals, investors, and compliance teams. We cover regulatory frameworks, sustainability concepts, reporting standards, and emerging terminology.
How often is the glossary updated?
The glossary is regularly expanded with new terms as the ESG landscape evolves. We aim to cover 100+ terms across environmental, social, governance, frameworks, and finance categories.
Can I suggest a term?
Yes. Contact us with term suggestions and we will consider adding them to the glossary.
Are glossary definitions verified?
Definitions are written by ESG domain experts and cross-referenced with established standards bodies, regulatory frameworks, and industry publications.